By Andrea Figueras

Pandora confirmed its guidance for the current year but pointed to mounting challenges, including effects from U.S. tariffs as well as headwinds from foreign exchange and commodity prices.

The Danish jeweler said Friday that these difficulties are expected to gradually increase through the course of the year, amid what it called turbulent times.

The company continues to expect its earnings before interest and taxes margin to be around 24% this year. It also reiterated its forecast for organic sales growth of 7% to 8%.

However, it foresees a hit from President Trump's duties on imported goods to the U.S. The levies are expected to have an impact on Pandora in relation to products originating mainly from Thailand--the group's key manufacturing hub--but also China, Vietnam, India and several other countries, it said.

The company has been working on mitigation steps and has also accelerated certain measures, including switching supply sources and shipping jewelry directly to Canada and Latin America rather than through its U.S. distribution center.

Based on the current tariff levels, Pandora forecasts a 200 million Danish kroner ($31.3 million) hit in 2025, which has been accounted for in the guidance. For next year, it estimates a 450 million kroner annualized impact. Pandora will consider further price increases, cost measures and other mitigation steps to cover the hit, it said, noting that the timing and extent of the actions is to be confirmed.

As a result, the company expects to deliver an EBIT margin of at least 24% in 2026. Excluding tariff effects, the group said it would be able to deliver its EBIT margin target of approximately 25%.

"It is too early to conclude on the magnitude and timing of mitigating actions to offset the recently announced tariff," it said.

In order to tackle higher commodity prices, Pandora raised prices by 5% in October last year. In April 2025, it increased prices again by 4%, while in August it implemented another low-single-digit rise. Earlier this year, the group initiated a program to axe costs across several areas, including store operations, procurement, distribution and logistics, simplification and removal of overlaps. These cost-cutting measures are progressing well and the benefits are expected to be seen from the first quarter of 2026 onward, it said.

The stock plunged 13% to 903.40 kroner in European morning trading. Shares are up 16% over the year to date.

Meanwhile, Pandora logged revenue of 7.075 billion kroner for the second quarter, 8% higher than in the same period a year earlier. Analysts had forecast revenue of 7.18 billion kroner and an organic increase of 8%, according to consensus estimates provided by the company.

Net profit for the second quarter stood at 803 million kroner compared with 799 million kroner.

In the third quarter to date, the group has seen like-for-like sales growth of around 2%. The performance has been negatively affected by a weak end-of-season sale and the timing of product launches, it said.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

August 15, 2025 04:01 ET (08:01 GMT)

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