Pandora A/S (CPH: PNDORA) has lost more than 15% in recent sessions after the US President Donald Trump announced new tariffs on Thailand that were well above the company’s expectations.
Thailand is where Pandora currently makes most of its luxury jewellery.
Trump’s tariffs could spell trouble for the Danish firm as the US accounted for more than 30% of its overall sales in 2024.
Versus their year-to-date high, Pandora shares are down some 35% at the time of writing.
Pandora had expected significantly lenient tariffs
Pandora stock is seeing pressure since the tariff announcement was quite a bit of a surprise for its investors.
In February, when the affordable luxury brand reported its financial results for the fourth quarter, its management said expectations were for the US to announce a 10% tariff on Thailand – that was at least the company’s base case.
However, US President Trump shocked Pandora with a 37% tariff on the South Asian country on “Liberation Day”, which the company now forecasts could lower its revenue by more than $175 million.
That translates to about a 4.0% hit to revenue, given that Pandora’s top line came in at $4.42 billion last year.
Following the recent decline, the Danish firm is now trading at a price last seen in late 2023.
Other luxury brands to take a hit from Trump tariffs
Note that Pandora is not the only European luxury brand that’s expected to take a meaningful hit due to Trump tariffs.
In fact, several other names in that space will feel the pain, according to Citi analysts.
That’s because the US has long been a key driver of growth for luxury products.
However, the majority of luxury brands will resort to passing on the higher costs related to Trump tariffs to the end-consumer, which could result in a material hit to their products’ overall demand, the investment firm told clients in a research note today.
Other than Pandora, Citi expects the likes of Birkenstock and Brunello Cucinelli in particular to take the damage due to Trump’s trade policies.
LVMH may be a winner amidst tariff tantrums
On the flip side, the investment firm expects European luxury brands with relatively lower revenue exposure to the US to emerge as winners amidst the tariff tantrums.
Those positioned to see more modest duties due to more localized production could also end up gaining share amidst the new tariff environment, it added.
These include the French luxury house LVMH, British brand Burberry, and Italian fashion label Moncler.
Additionally, these three companies currently pay a dividend as well, which makes them all the more exciting to own amidst the recently brewing fears of a recession in the back half of 2025.
That said, only LVMH out of those three currently has a consensus “overweight” rating.
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