Pandora, the silver promise and the hedge that only picked the date

Thursday, 5 October 2023, Pandora’s capital markets day, its full-day presentation for investors. The Danish charm-bracelet maker promised an operating margin of at least 26 per cent by 2026, the profit kept from every sale, and its chief executive, Alexander Lacik, said the targets “reflect our confidence in the future”. This column is about one mechanic, the hedge, fixing a metal’s price in advance, and by the end you will see it before the room does.

The law of the day: own what the supplier cannot price.

Pandora crafts much of its jewellery in silver, a metal whose price nobody in Copenhagen sets. Keep that sentence about the future.

Last Wednesday Pandora’s chief executive since January, Berta de Pablos-Barbier, narrowed this year’s forecast “towards the upper end”: a margin of no more than 23 per cent.

So how does a company beat its own forecast and still miss its promise? Hold on.

## Charms, then silver

Pandora sells small silver charms to mark life’s big moments. In 2023 it sold one to investors.

The 2023 plan assumed silver at about $24 an ounce, says a footnote in Pandora’s latest report.

Silver then did what charm bracelets do and kept adding. The spot price behind Pandora’s earlier plan for 2027 was $82 an ounce, which is lovely in a necklace and dreadful in a cost base.

In February 2025 the company still “re-confirms the EBIT margin target” of at least 26 per cent, EBIT being its operating profit, adding in the same sentence: “although currently pointing towards the low-end of the range.”

Pointing towards the low end is how a target says goodbye without leaving the room.

A year later, under the new chief executive, the forecast for 2026 arrived at no more than 22 per cent.

## The hedge

This year, the silver price had been fixed in advance.

A hedge is a contract that fixes today the price a company will pay for its metal later. It shields this year’s profit from a sudden jump, which is exactly what it is for. It does not cancel the jump; it moves it to the following year, at a price everyone can read.

This year’s silver was hedged at “around USD 34/oz”, the same report says. That is much of why 2026 looks respectable.

It was on page 11: next year’s profit is already hedged, at nearly twice this year’s price. The good news had a seven-page head start.

Pandora’s own target for its 2027 margin is at most 15 per cent, one-off costs included.

A hedge does not cancel the bill. It picks the date.

In fairness, the hedge did its job, sales grew in every region in the third quarter, and Pandora has raised its longer-term margin ambition to above 23 per cent.

Right of reply: Pandora had not been asked for comment before publication on 11 November 2026. Any response will be added here, with the date it arrived.

From 2027 it moves part of its range to platinum-plated jewellery: the answer to one expensive metal is a more famous one, applied thinly. Part of this year’s margin is a one-off refund of American tariffs, welcome but not a product line.

Behind the margin are the people who design, make and sell the jewellery; what is judged here is a promise, not their work.

## The verdict

Three signals to watch: a target set at today’s price for a year far away; a good year resting on contracts signed the year before; next year’s hedge price, printed well after the headline.

My verdict: Pandora priced a three-year promise in a metal it does not control, and the hedge only chose which year would pay.

Own what the supplier cannot price; whatever you merely hedge, you are only renting.

The targets, Mr Lacik said, reflected “our confidence in the future”. They did. The future has since been hedged at about 62 dollars.

The 2026 annual report is due in February and settles the promise; it is in my diary. Next in my queue: Ford, and the two cents of every dollar that went missing.

Law No. 2 · Own What the Supplier Cannot Price

Understand Business. Better.
Max Noble