American Consumers Sparkle: Pandora's U.S. Sales Defy Global Jewelry Slump

While consumer confidence in Europe and other regions faces economic headwinds, American consumers continue to indulge in jewelry purchases. Danish jewelry brand Pandora reports that its U.S. market, contributing a third of its total revenue, defies the global sales downturn.

"The U.S. continues to grow against the trend," Pandora CEO Alexander Lacik commented, noting unwavering enthusiasm from American consumers compared to a varied performance in Europe, where customers have been under pressure for quite some time. The company revealed that second-quarter same-store sales in the U.S. surged 8% year-on-year, contrasting with a high single-digit decline in several major European markets.

This trend is echoed in the ultra-luxury segment. Swiss conglomerate Richemont, the parent company of Cartier, disclosed last month that its U.S. sales soared 17% in the quarter ended June 30, despite weaker comparable sales in the Asia-Pacific region. Data from analytics firm Tenoris indicates robust overall jewelry sales in the U.S. with a 5% increase in the first half of the year, maintaining momentum even in July, a traditionally slow period, with a 3.5% rise.

Bernstein’s senior analyst William Woods acknowledged Pandora's robust U.S. performance as a key driver behind its success. However, he also pointed out the mixed conditions across retailers, as some have lowered yearly forecasts due to tariff concerns. For brands like Pandora, heavily reliant on Thai manufacturing, tariffs pose a significant challenge. The company updated its tariff guidance, forecasting a financial hit, with projections of losses reaching 200 million DKK in 2025, potentially expanding to 450 million DKK in 2026.

Despite managing to absorb a portion of these rising costs through cost optimization and pricing adjustments, Pandora’s CEO Lacik admitted that tariffs could weaken U.S. consumer purchasing power and demand for jewelry amidst rising raw material costs. Silver, a crucial material for Pandora, soared to a 14-year high last month, further compounded by the consistent increase in gold prices, a traditional safe-haven asset. The looming threat of higher U.S. tariffs, coupled with a weakening dollar and escalating silver prices, adds complexity to the economic environment, potentially dampening consumer confidence.