<\/p>\n
Pandora (PNDORA) just told investors it will keep replacing silver in its jewelry, even though silver’s price has fallen significantly from its record high.<\/p>\n
That decision surprised some market watchers. When the price of a material drops, most companies take the cost savings and move on. Pandora is doing the opposite.<\/p>\n
The Danish jeweler wants to stop letting one metal decide how its business performs.\u00a0<\/p>\n
Silver made up the bulk of its products, and wild price swings kept dragging its results and its share price around.<\/p>\n
So its management is building a plan that holds up whether silver rises or falls. That plan, paired with a strong second-quarter report, pushed the stock sharply higher this week.<\/p>\n
Here is what Pandora is actually doing, why it matters for the share price, and where there is still risk for anyone holding the stock.<\/p>\n
Why Pandora is moving off silver even as prices fall<\/p>\n
Silver used to be the metal that determined the results of a Pandora quarter. It sat in most of the company’s products, so every price spike affected profit margins.<\/p>\n
That became a problem. Silver climbed past $120 an ounce in January before dropping back toward $65, CNBC reported. Pandora’s stock moved with it.<\/p>\n
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CEO Berta de Pablos-Barbier wants that connection gone.\u00a0<\/p>\n
She told Reuters the company has to separate its performance and share value from the commodity, adding that Pandora is a jewelry brand, not a silver trader.<\/p>\n
The fix is platinum plating. Pandora will move at least 50% of its relevant silver assortment to platinum-plated designs by 2027, and cut silver’s share of its lineup toward 20% over time.<\/p>\n
Platinum costs far more per ounce than silver, but Pandora uses only a thin plated layer, which keeps the finished product affordable.<\/p>\n
Pandora plans to move at least half of its silver jewelry to platinum-plated designs by 2027.<\/p>\n
winhorse / Getty Images<\/p>\n
How the platinum switch protects Pandora’s profit margins<\/p>\n
The whole point of the switch is steadier costs.\u00a0<\/p>\n
When one metal determines your input bill, a price spike affects earnings and there is little you can do about it.\u00a0<\/p>\n
By spreading across more materials, Pandora reduces how much any single metal can affect its earnings. That gives the company’s management clearer visibility into future costs.<\/p>\n
The plan is already in effect.\u00a0<\/p>\n
Pandora launched platinum-plated bracelets in stores across Northern Europe and online, with a wider global launch planned for the second half of 2026, National Jeweler reported.<\/p>\n
There is also a demand argument. In a July study of23,000 shoppers, 78% recognized platinum as a precious metal, compared with 69% for sterling silver.<\/p>\n
Pandora says platinum-plated pieces will cost about the same as its silver jewelry.<\/p>\n
What the strong second quarter changed for the stock<\/p>\n
The material plan landed alongside a second-quarter report that beat expectations and gave investors a reason to buy.<\/p>\n
Pandora posted 3% organic growth and raised its full-year outlook, according to a press release.\u00a0<\/p>\n
Related: Dollar General copies Costco with a discount twist<\/p>\n
Net income reached DKK 875 million, well above the DKK 640 million analysts expected, Newsquawk reported.<\/p>\n
Management now expects 0% to 3% organic growth for 2026, up from the prior range of -1% to 2%. It also lifted its full-year EBIT margin target to a range of 22% to 23%, from 21% to 22%.<\/p>\n
The higher margin target is not purely operational. Pandora said it reflects a one-time gain from a U.S. tariff refund, according to a press release.\u00a0<\/p>\n
Strip that out, and the underlying beat was closer to 3%, Investing.com reported.<\/p>\n
How Pandora locked in its silver costs through next year<\/p>\n
Pandora did not stop at the product switch. It also locked in the price on nearly all of its remaining 2027 silver needs.<\/p>\n
The company has now secured contracts covering 90% to 100% of its 2027 silver supply at about $65 an ounce, Investing.com noted. Its prior planning assumed roughly $82 an ounce.<\/p>\n
That lower locked-in price adds about 200 basis points to Pandora’s earlier 2027 margin assumptions. In plain terms, a lower fixed silver price means more profit falls through next year.<\/p>\n
This is the part that aligns with the platinum plan. One move cuts long-term reliance on silver, and the other controls the cost of the silver Pandora still uses in the meantime.<\/p>\n
What Pandora is doing with dividends and buybacks<\/p>\n
Capital returns shifted too, and the direction tells you where its management’s cash is going.<\/p>\n
Pandora raised its ordinary dividend by 10% to DKK 22 per share, Yahoo Finance reported. That is a direct payout increase for shareholders.<\/p>\n
At the same time, it paused its share buyback program. The company said it will resume buybacks once the platinum transition has progressed further.<\/p>\n
For investors, the tradeoff is simple. You get a bigger dividend now, and buybacks return later once the mineral switch frees up working capital.<\/p>\n
Where the risk still sits for Pandora investors<\/p>\n
The stock reacted strongly to the earnings report and news of the silver shift. Shares jumped after the results, though they gave back about 1.8% in August 14 trading.<\/p>\n
Even so, there is a need for caution. Pandora trades at about 14 times forward earnings, according to Yahoo Finance, against modest single-digit growth.\u00a0<\/p>\n
The stock also carries a Neutral analyst consensus, Investing.com reported.<\/p>\n
The bigger question is whether shoppers accept platinum-plated pieces over the sterling silver they know.\u00a0<\/p>\n
The U.S. accounts for about a third of Pandora’s sales, and consumer sentiment there is weak, de Pablos-Barbier told CNBC.<\/p>\n
If shoppers do not warm to the new platinum-plated pieces during the holiday season, Pandora could be stuck with unsold inventory.\u00a0<\/p>\n
It would likely need to cut prices to move that stock, and that would eat into profit. That is the real risk for anyone holding the stock right now.<\/p>\n
Three things that must go right for the platinum planShoppers buy platinum-plated pieces at similar rates to silver, especially in the U.S. and Europe.The global rollout in late 2026 lands without supply or pricing problems.Organic growth stays inside the new 0% to 3% guidance range till the end of the year.<\/p>\n
Pandora has made its choice clear. It would rather control its own cost structure than wait for silver to behave.<\/p>\n
Related: Iconic supermarket chain closes more stores and facilities<\/p>\n
#Pandora #opens #unexpected #box #silver #price #drops<\/p>\n","protected":false},"excerpt":{"rendered":"
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