Pandora A/S has dropped more than 15 percent in the last few sessions, after US President Donald Trump announced that new tariffs would be imposed on Thailand. These were far above what the company expected.
Pandora’s luxury jewelry is currently made in Thailand.
Trump’s Tariffs Could Spell Trouble for Danish Firm as US sales will account for over 30% of their total in 2024.
Pandora’s shares have fallen 35% from their highs for the year to date.
Pandora expected much more lenient tariffs
Pandora’s stock has been under pressure after the announcement of tariffs was a big surprise to its investors.
When the management of the luxury affordable brand announced its fourth-quarter financial results in February, they said that the US was expected to announce a tariff of 10% on Thailand. That, at least, was the base case.
The US President Trump, however, shocked Pandora by imposing a tariff of 37% on South Asia on “Liberation Day”. According to the company’s forecasts now it could reduce its revenues by over $175 million.
This translates into a revenue drop of about 4.0%, since Pandora’s topline was $4.42 Billion last year.
After the recent drop, the Danish company is trading at prices last seen late in 2023.
Trump’s tariffs will also affect luxury brands
It’s important to note that Trump tariffs are not expected to have a significant impact on Pandora or any other European luxury brands.
Citi analysts say that several names will also feel the impact.
The US is a major driver for growth in luxury goods.
The investment firm said today that the majority of luxury products will pass on higher tariff costs to consumers, which may result in an overall decline in demand for their product.
Citi predicts that Trump’s policies will hurt brands like Brunello Cucinelli and Birkenstock, but not Pandora.
LVMH could be a big winner amid the tariff quarrels
The investment firm believes that European luxury brands, which have a lower exposure of revenue to the US market will emerge as the winners in the midst of the tariff tumult.
It added that those who are positioned for lower duties because of more localized production may also gain market share in the new environment.
The French fashion house LVMH is one of the most prestigious, as are British brands Burberry and Moncler.
These three companies also pay dividends, making them even more attractive to invest in, especially with the recent fears about a possible recession for the second half of 2025.
LVMH is the only one of these three companies that currently receives a “overweight rating” by consensus.
The post Pandora stocks plunge as Trump tariffs against Thailand bring bitter surprise first appeared on ICD
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