Danish jewelry maker Pandora lower its annual revenue margin steerage on Tuesday attributable to a decline within the US greenback and stated it’s getting ready for eventualities associated to US tariffs that might add tens of tens of millions of {dollars} to its prices.
Pandora, whose greatest market is the US, stated it now anticipated a margin on earnings earlier than curiosity and tax (EBIT) of round 24 p.c this 12 months, having beforehand focused round 24.5 p.c. It caught to its steerage of 7-8 p.c natural development for the 12 months.
The appeal bracelet maker is among the many European firms most in danger from the chance US President Donald Trump reinstates steep so-called “reciprocal” tariffs, together with a 37 p.c tariff on Thailand the place its two factories are situated.
These tariffs have been carried out, then paused for 90 days to permit for negotiations. A ten p.c blanket tariff on imports from all international locations stays in place.
Pandora stated that, if the present stage of tariffs stays in place, there can be a price influence of 250 million Danish crowns ($38 million) this 12 months and 300 million Danish crowns yearly thereafter.
If the 37 p.c tariff on Thailand resumes, Pandora expects an influence of 500 million Danish crowns this 12 months, and 900 million Danish crowns yearly thereafter.
That’s decrease than Pandora’s April forecast of 1.2 billion Danish crowns yearly, as the corporate stated it expects to have the ability to ship merchandise straight from Thailand to Canada and Latin America by early 2026. It at present makes use of a warehouse in Baltimore to serve North and South America.
“In each eventualities, Pandora will contemplate additional worth will increase,” the corporate stated, the newest in a string of manufacturers and retailers to warn of upper US costs for his or her items.
Pandora has already hiked costs throughout the board by 4 p.c in April, following a 5 p.c improve in October final 12 months, in response to the rising value of silver, a key materials for its jewelry.
The corporate’s first-quarter income matched analysts’ expectations, and it stated it might proceed to put money into advertising and marketing whereas acknowledging an “unsure” financial backdrop.
Income for the primary quarter was 7.347 billion Danish crowns ($1.12 billion), barely above analysts’ median forecast of seven.310 billion, whereas Pandora delivered natural development of seven p.c.
“We’re happy with how we’ve began the 12 months, particularly given the very excessive volatility on this planet round us,” its CEO Alexander Lacik stated in an announcement.
A weaker greenback hurts Pandora’s revenues as gross sales in {dollars} are value much less when transformed into Danish crowns.
By Helen Reid and Isabelle Yr Carlsson; Edited by Jan Harvey and Tomasz Janowski
Be taught extra:
Pandora Raises Full-12 months Development Outlook as Broader Product Vary Pays Off
The corporate stated its working revenue rose to 1.34 billion Danish crowns ($196.25 million) within the second quarter from 1.19 billion a 12 months earlier.
