Pandora CEO says US consumer divide growing even as sales beat expectations

[LONDON] Jewellery brand Pandora said an unwillingness to spend by mid to lower-income shoppers pushed down comparable sales by 2 per cent in North America.

Its new CEO, Berta Pablos-Barbier, is grappling with weak consumer sentiment in the company’s core market amid the Iran war.

Pandora has been under pressure from high US import tariffs and a surge in silver prices squeezing margins at the Danish company – which sells silver charm bracelets, priced at US$70 and up, made at its factories in Thailand.

Pablos-Barbier, who took over on Jan 1, said: “The K-shaped economy is actually deepening, so what we see is that the high-income consumers continue to have a good time.

“It is mainly the middle and the low (income consumers) with high inflation, high interest rates, high fuel prices... so they are disproportionately impacted.”

Fewer people are visiting stores and malls, she added, noting that the longer the war continues, the larger the impact will be on consumer sentiment.

Comparable sales in the Europe, Middle East and Africa region also fell 2 per cent over the quarter.

Results beat expectations

However, Pandora’s shares jumped 9 per cent as first-quarter sales beat analysts’ expectations, due to strong growth in Latin America and Asia-Pacific helping to offset the weaker core regions.

Overall revenue fell to 7.11 billion kroner (S$1.42 billion) from 7.35 billion kroner in the year-ago period, but beat the 7.09 billion kroner analysts had expected in a company-compiled poll.

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Pandora’s shares have been volatile, moving sharply in reaction to wild swings in the price of silver, and are down 45 per cent from the year-ago period.

In February, the company said it would cut its silver exposure by shifting half its jewellery to platinum-plated.

More targeted marketing

Pablos-Barbier, previously Pandora’s head of marketing, has promised to win new customers, bring in novel designs and have more efficient advertising.

She has said 2026 will be a transition year, while the strategy would deliver higher comparable sales growth in 2027.

Operating profit was 1.49 billion kroner, beating analysts’ average forecast of 1.28 billion kroner, due in part to lower marketing spending.

“The intention is not to spend less (on marketing), it is to spend better,” she said, adding that the company plans to spend the same amount on marketing in 2026.

As the brand builds its lab-grown diamond business, Pandora said it would start labelling its diamond products with their carbon footprint, which the company calculated with external auditors.

This would highlight their products’ carbon-emissions impact being much lower than from diamonds produced by mining.

Pandora sources its lab-grown diamonds from suppliers in the US and India, which use renewable energy. REUTERS