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. 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. The Danish jeweler wants to stop letting one metal decide how its business performs. Silver made up the bulk of its products, and wild price swings kept dragging its results and its share price around.
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. 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.
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. Silver climbed past $120 an ounce in January before dropping back toward $65, CNBC reported.
Pandora's stock moved with it. Big Lots struggles as new ownership keeps closing stores 2 retail giants close 100s of stores and 1 faces bankruptcy risk Costco makes a pricing promise members need to know CEO Berta de Pablos-Barbier wants that connection gone. She told the company has to separate its performance and share value from the commodity, adding that Pandora is a jewelry brand, not a silver trader.
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. Platinum costs far more per ounce than silver, but Pandora uses only a thin plated layer, which keeps the finished product affordable.
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