U.S. shoppers fuel jewelry splurge despite tariff headwinds

U.S. shoppers are continuing to splurge connected jewelry, adjacent arsenic economical headwinds measurement connected user sentiment successful Europe and China.

Danish jewelry marque Pandora said the U.S. market, which accounts for one-third of its wide revenues, remained an outlier amid weaker planetary sales.

"The U.S. continues to subordinate the trend," Pandora CEO Alexander Lacik told CNBC's "Squawk Box Europe" connected Friday.

"A beardown U.S. user continues to beryllium funny successful Pandora, and, arsenic I said, Europe is simply a spot of a mixed bag," helium went on, noting the European lawsuit basal had been "under unit for rather a while."

China, which accounts for conscionable 1% of Pandora's full revenues, "continues to beryllium challenging," Lacik said, citing broader depletion difficulties successful the country.

His company, known for its high-street stores selling fashionable charm bracelets and metallic jewelry, connected Friday posted an 8% emergence successful U.S. income connected an yearly like-for-like ground successful the 2nd quarter.

Sales successful China, connected the different hand, fell 15% implicit the period, portion those crossed respective large European markets besides declined by precocious single-digits.

Similar trends were observed astatine ultra-luxe jewelry radical Richemont, proprietor of the Cartier brand, which past period posted a 17% leap successful America income successful the 3 months to June 30, contempt softer comparative income successful Asia Pacific.

Overall, U.S. jewelry income were beardown successful the archetypal fractional of the year, rising 5% versus a level speechmaking successful the archetypal fractional of 2024, according to analytics steadfast Tenoris.

In July — typically a slower period for jewelry retail — income successful the state were up 3.5%, it noted.

"The Pandora marque is moving successful the U.S. astatine the moment, which has helped to thrust its success," William Woods, elder expert and caput of European retail and nutrient transportation astatine Bernstein, told CNBC by email. He added that weakness for Pandora successful France and Germany, meanwhile, was "consistent with a volatile situation that we person seen implicit the past fewer yeas."

Woods cited wide spot successful the U.S. marketplace astatine present, but nevertheless pointed to a varied representation from retailers, immoderate of whom person cut their full-year outlooks connected tariff concerns.

Tariffs stay a cardinal challenge for jewelry brands, including for Pandora, which depends heavy connected manufacturing successful Thailand.

The institution connected Friday updated its tariff guidance to forecast a 200 cardinal Danish kroner ($31 million) deed successful 2025, followed by an estimated 450 cardinal Danish kroner stroke adjacent year. It forecasts an operating nett borderline of astir 24% this year.

The outlook accounts for tariff rates arsenic they presently stand, with Morgan Stanley successful a Friday enactment flagging an uptick successful Thailand's existent 19% complaint arsenic a cardinal hazard for the company.

Pandora shares fell implicit 14% Friday greeting pursuing the merchandise of the second-quarter results.

CEO Lacik said his institution was presently absorbing two-thirds of those added incurrences, including by mode of outgo optimization and pricing adjustments, portion the remainder is to beryllium calved retired successful this year's estimated operating nett margin.

However, helium cited tariffs arsenic a caller headwind that could undermine the existent spot of the U.S. user — and jewelry request — alongside higher input costs. Silver, cardinal to Pandora's production, deed 14-year highs past month, portion prices for traditionally safe-haven plus golden person continued to ascent this year.

"[The U.S. consumer] whitethorn alteration successful the future, who knows, with the interaction of tariffs, not conscionable successful jewelry but successful general," Lacik said.

"We person a weakening dollar, we person an summation successful metallic prices, and past the pick connected apical is the tariffs successful the U.S.," helium added.