A Pandora Bracelet on the PANDORA Concept Store.
Franziska Krug | German Select | Getty Images
U.S. shoppers are persevering with to splurge on jewelry, at the same time as financial headwinds weigh on shopper sentiment in Europe and China.
Danish jewelry model Pandora stated the U.S. market, which accounts for one-third of its total revenues, remained an outlier amid weaker international gross sales.
“The U.S. continues to buck the trend,” Pandora CEO Alexander Lacik instructed CNBC’s “Squawk Box Europe” on Friday.
“A strong U.S. consumer continues to be interested in Pandora, and, as I said, Europe is a bit of a mixed bag,” he went on, noting the European shopper base had been “under pressure for quite a while.”
China, which accounts for simply 1% of Pandora’s complete revenues, “continues to be challenging,” Lacik stated, citing broader consumption difficulties within the nation.
His firm, identified for its high-street shops promoting standard appeal bracelets and silver jewelry, on Friday posted an 8% rise in U.S. gross sales on an annual like-for-like foundation within the second quarter.
Sales in China, however, fell 15% over the interval, whereas these throughout a number of main European markets additionally declined by excessive single-digits.
Similar tendencies have been noticed at ultra-luxe jewelry group Richemont, proprietor of the Cartier model, which final month posted a 17% bounce in America gross sales within the three months to June 30, despite softer comparative gross sales in Asia Pacific.
Broader U.S. jewelry gross sales have been sturdy within the first half of the 12 months, rising 5% versus a flat studying within the first half of 2024, in keeping with analytics agency Tenoris.
In July — usually a slower month for jewelry retail — gross sales within the nation have been up 3.5%, it famous.
“The Pandora brand is working in the U.S. at the moment, which has helped to drive its success,” William Woods, senior analyst and head of European retail and meals supply at Bernstein, instructed CNBC by e mail. He added that weak point for Pandora in France and Germany, in the meantime, was “consistent with a volatile environment that we have seen over the last few yeas.”
Woods cited total power within the U.S. market at current, however nonetheless pointed to a diversified image from retailers, a few of whom have cut their full-year outlooks on tariff considerations.
Tariff dangers loom
Tariffs stay a key challenge for jewelry brands, together with for Pandora, which relies upon closely on manufacturing in Thailand.
The firm on Friday up to date its tariff steering to forecast a 200 million Danish kroner ($31 million) hit in 2025, adopted by an estimated 450 million Danish kroner blow subsequent 12 months. It forecasts an working revenue margin of round 24% this 12 months.
The outlook accounts for tariff charges as they at the moment stand, with Morgan Stanley in a Friday notice flagging a possible uptick in Thailand’s present 19% price as a key threat for the corporate. UBS luxurious analyst Chris Huang in the meantime cited exterior levies and an “overreliance on the U.S.” as potential challenges.
Pandora shares fell over 14% Friday morning following the discharge of the second-quarter outcomes.
CEO Lacik stated his firm was at the moment absorbing two-thirds of these added incurrences, together with by the use of value optimization and pricing changes, whereas the rest is to be born out on this 12 months’s estimated working revenue margin.
However, he acknowledged tariffs as a contemporary headwind that would undermine the present power of the U.S. shopper — and jewelry demand — alongside larger enter prices. Silver, key to Pandora’s manufacturing, hit 14-year highs final month, whereas costs for historically safe-haven asset gold have continued to climb this 12 months.
“[The U.S. consumer] may change in the future, who knows, with the impact of tariffs, not just in jewelry but in general,” Lacik stated.
“We have a weakening dollar, we have an increase in silver prices, and then the cream on top is the tariffs in the U.S.,” he added.