Pandora delivered 2% organic growth in Q1 2026 (0% like-for-like, 2% network expansion), in line with expectations. Reported revenue was DKK 7,109m versus DKK 7,347m a year ago, with a 5.4% FX headwind - mainly a weaker USD - worth approximately DKK 0.4 billion. The group absorbed a 440bp drag from commodities, FX and tariffs at the EBIT level and 370bp at the gross margin level, with pricing and the Silverstone efficiency programme offsetting all but 90bp of the gross margin impact.
Margins
Gross margin was 79.5% (-90bp year-on-year). EBIT margin was 20.9% versus 22.3%, a -140bp net decline despite the 440bp external drag, as network expansion (+50bp) and operating cost phasing (+200bp) provided partial offset. The cost phasing is a Q1 timing benefit - management confirmed it is neutral on the full-year EBIT margin, meaning Q2-Q4 face a corresponding reversal of similar magnitude. Full-year guidance of 21-22% EBIT margin is unchanged.
Geography
North America (34% of revenue) and EMEA (50%) both printed -2% LFL, against comparables of +11% and +4% respectively. Asia-Pacific (9%) swung to +12% LFL from -3% a year ago; Latin America (7%) accelerated to +6% from +3%. The mature markets are the problem; the low-penetration markets are responding to strategic recalibration.
ROIC
ROIC (IFRS 16) was 39%, down from 45% a year ago and continuing a five-quarter declining trend. The transition CAPEX for platinum-plated jewellery (~DKK 400m in 2026 alone) will add further pressure before the structural commodity savings materialise.
Commodities
Silver is approximately 30% of COGS and the primary exposure. Spot prices were $30.3/oz in Q1 2026 (+8.7% year-on-year); gold was $2,663/oz (+7.3%). The 2026 income statement is largely protected - Pandora hedged 95-100% of its silver exposure at approximately USD 32/oz. The structural problem is 2027: at January 2026 spot prices, management estimated an ~1,100bp gross headwind to the 2027 EBIT margin before any mitigation. The platinum-plated transition is the answer to that number, not to the 2026 P&L.
Capital allocation
The annual dividend was DKK 1,646m, up 5%. Share buybacks were effectively paused at DKK 34m versus DKK 1,011m in Q1 2025, reflecting elevated transition CAPEX and a cautious macro environment.
Store network
Total concept stores: 2,796 (+25 year-on-year). North America added 46 stores; EMEA added 55. Asia-Pacific contracted by 82, almost entirely from China, where concept stores fell from 188 to 89 (-53%) and revenue from DKK 96m to DKK 69m (-28%). Asia-Pacific's +12% LFL growth suggests the leaner network is now performing better. Pandora targets transitioning approximately 80% of its silver revenue to platinum-plated by end of 2028, shifting COGS toward more stable, labour-based costs and reducing commodity exposure structurally.
Peer comparison
Pandora's TTM gross margin of 78.9% is the highest in this peer group - above Richemont (65.9%), LVMH (66.2%) and Hermes (68.9%), despite Pandora operating at a fraction of the average selling price. The structural reason is that approximately 90% of COGS is labor at the Bangkok manufacturing complex, not commodity input costs. Signet (specialty jewelry retail) sits at 39.6% because it sells third-party branded product with a retail cost base. At the operating margin level, Pandora (23.6%) is in line with Richemont and LVMH; the gap to Hermes (45.6%) reflects Hermes's extreme scarcity pricing and constrained supply model.
Guidance
Full-year 2026: -1% to +2% organic growth, 21-22% EBIT margin. LFL guidance of -3% to 0% reflects soft consumer momentum, with network expansion contributing ~2%. Current Q2 trading shows approximately flat LFL. CEO Berta de Pablos-Barbier: "We remain focused on executing our strategic plans despite the uncertain economic and geopolitical backdrop."
Out of the woods?
For 2026, largely yes. Silver is hedged, the Silverstone cost programme is working, and management has demonstrated it can absorb a large external shock while keeping margins within a tight band. The 90bp gross margin decline on a 370bp headwind is the evidence. But 2026 protection is not the same as structural resolution. North America and EMEA LFL remain negative. ROIC has fallen six percentage points in a year and is still heading down. Buybacks are on hold. The platinum-plated transition - the actual answer to the commodity problem - is a multi-year execution bet that has to work at volume, at quality, and without losing the consumer franchise that makes those peer-leading gross margins possible. The 2027 cliff is real. Whether Pandora is out of the woods depends almost entirely on whether the product transition delivers on schedule.