Pandora’s first-quarter results landed with a split verdict. Revenue slipped. Profits beat forecasts. Shares soared anyway. The Danish jeweler famous for affordable silver charms now finds itself staring at a polarized customer base that refuses to spend the way it once did.
Sales fell 3.3% to 7.109 billion Danish crowns from a year earlier. That still topped analyst expectations. Comparable sales in North America dropped 2%. Europe, the Middle East and Africa posted a similar decline. Offsetting strength came from Latin America and Asia-Pacific. Operating profit reached 1.487 billion crowns, ahead of the 1.28 billion crowns analysts had predicted, helped by restrained marketing costs.
New CEO Faces Uneven Recovery
Berta de Pablos-Barbier stepped into the top job on January 1. A former marketing chief, she inherited a company battered by external shocks. High U.S. import tariffs. Surging silver prices that squeezed margins. And now the fallout from conflict in Iran that has driven up fuel costs.
“The K-shaped economy is actually deepening,” she told Reuters. “So what we see is that the high-income consumers continue to have a good time and it is mainly the middle and the low (income consumers) with high inflation, high interest rates, high fuel prices… so they are disproportionately impacted.”
Her words paint a picture of two Americas. One group keeps shopping for luxury experiences. The other pulls back on anything that feels discretionary. Pandora, with charms starting around $70, sits squarely in that squeezed middle. Fewer visits to stores and malls tell the tale. Traffic has suffered. So have sales to mid- and lower-income buyers who once formed the brand’s core.
But the numbers aren’t all grim. Organic growth came in at 2%. Like-for-like sales were flat. The company held its full-year guidance. And the stock jumped more than 11% after the report, a sign investors saw resilience amid the noise. Still, shares remain down roughly 45-50% from levels a year ago, according to multiple reports including Yahoo Finance.
De Pablos-Barbier calls 2026 a transition year. She expects the new strategy to lift comparable sales growth in 2027. The plan rests on fresh designs, sharper marketing aimed at acquiring new customers, and smarter ad spending. “The intention is not to spend less (on marketing), it is to spend better,” she said. Total marketing investment should stay stable for the year.
Chief Financial Officer Anders Boyer emphasized tight cost control. That discipline helped protect margins even as headwinds mounted. Gross margin stayed high near 80%, though it eased slightly. Pricing actions and efficiency moves offset some of the pressure from commodities and currency swings.
The silver problem looms large. Prices spiked and hammered production costs at Pandora’s Thai factories. In February the company announced a major shift. At least half its silver jewelry will move to platinum-plated versions to reduce exposure to volatile metal markets. The move drew praise from some analysts who viewed it as a smart hedge. Yet it also highlights how dependent the brand remains on materials whose prices swing wildly.
Tariffs add another layer. U.S. import duties have raised costs and clouded sentiment. The ongoing conflict involving Iran has pushed fuel prices higher, hitting lower-income households hardest. De Pablos-Barbier noted that the longer the situation persists, the greater the damage to consumer confidence. Store traffic suffers when wallets tighten.
Europe tells a parallel story. Comparable sales in the region’s big markets fell 2%. Shoppers there also appear cautious. High energy costs and economic uncertainty weigh on discretionary purchases. The company’s scale gives it some protection. Half its revenue still comes from EMEA. But growth has clearly stalled in the core territories.
Investors have taken notice of the divergence. Pandora’s results triggered an 11-14% share rally in some sessions, per reports from Quartz and others. Analysts remain mixed. Some see the valuation as attractive after the steep drop. Others worry that pricing power is limited in a segment where customers feel the pinch. Morningstar and Seeking Alpha pieces from earlier this year flagged both the risks from raw material inflation and the potential in Pandora’s innovation pipeline.
The company is pushing into lab-grown diamonds. It now plans to label these products with their carbon footprint, calculated with outside auditors. The goal is to underscore the lower emissions compared with mined stones. Suppliers in the U.S. and India, many using renewable energy, provide the gems. This move aligns with growing interest in traceable, sustainable luxury. Whether it moves the needle on sales remains to be seen.
Pandora’s history shows it can adapt. The brand built its name on charm bracelets that encouraged collecting and gifting. That emotional connection still matters. Yet today’s buyers split along income lines more sharply than before. High earners treat jewelry as an accessible splurge. Those further down the ladder delay or skip such purchases when gas prices climb or interest rates bite.
So the coming quarters will test de Pablos-Barbier’s playbook. New collections. Targeted campaigns. Continued cost vigilance. The company insists it started the year in line with internal plans. “We have started the year in line with expectations – that is not to say that like-for-like growth is where we want it to be,” the CEO said on the analyst call.
Analysts will watch regional trends closely. Any improvement in North American traffic could signal broader relief. Persistent weakness among middle-income buyers might force deeper discounting or faster innovation. Silver prices, tariffs, and geopolitics remain wild cards that could swing results quickly.
For now Pandora holds its course. It beat estimates. It protected profits better than feared. And it laid out a clear, if gradual, path forward. The consumer divide won’t vanish overnight. But a brand that once turned charm bracelets into a cultural phenomenon may yet find ways to reconnect with the buyers who drifted away. The transition year has begun. Results in the months ahead will show whether the strategy gains traction or faces further pressure.
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