Good afternoon, everyone, and welcome to this short conference call where we thought it would be helpful to outline some of the key points from the trading statement we just released a few hours ago. This pertains to the Q4 trading period. I have with me today Berta de Pablos-Barbier, Group CEO, and Anders Boyer, Group CFO, as well as the rest of the IR team. There will be a chance to ask some questions at the end. If you could kindly limit yourself to one or two, that would be great. On that note, I will hand over to Berta.
Good afternoon, everyone, and thank you for joining us today at short notice. You would have seen the trading statement released earlier today. With Anders, I will briefly cover some key points and also add some context. As CEO, my focus is to continue to strengthen brand desirability and deliver sustainable long-term growth. It is clear to me that Pandora has many untapped growth opportunities. Now, the macro environment is challenging, which requires us to sharpen execution and focus in selected areas to strengthen brand desirability.
I will come back to you in due course with our plans on that. Now, let's turn to performance. In Q4, our like-for-like was flat, including network expansion and other. Organic growth for the quarter was 4%, resulting in full-year organic growth of 6%. This was below our guidance of 7%-8% organic growth for the year. EBIT margin is expected to be around 24%, in line with our guidance. The quarter four like-for-like reflects the deceleration versus quarter three driven by North America. Europe remained broadly stable, although with opportunities to strengthen execution.
On North America, after three quarters of strong growth, we continue to grow, but a slow 2% like-for-like growth in quarter four and organic growth at 8%, plus 8%. Now, growth was impacted by softer traffic over the holiday period, though we did continue to outperform the overall market on traffic. Now, given the short period since the year-end, our data and insights remain, of course, preliminary. However, available indicators suggest that the overall category faced challenges in quarter four, particularly within the accessible market segment.
Now, we, of course, don't know how the consumer will behave through 2026 in North America, but we are confident that our brand is in very good shape and we have a solid starting point. And we will talk more about that in February. Now, in Europe, our growth was broadly stable, sequentially at minus 1% like-for-like and organic at plus 2%. Now, there are quite a few different moving pieces in Europe, given the number of markets and the different characteristics between them. But, well, the story remains broadly unchanged from prior quarters.
So, while macro does not help either in Europe, we do see areas where we can strengthen execution. On that note, I'll now hand over to Anders on profitability.
Thank you, Berta, and good afternoon, everyone. Very briefly on profitability. Then, even though the top line ended a touch below the guidance, our EBIT margin is still expected to land in line with the guidance. We did demonstrate quite good cost discipline in the fourth quarter, in my opinion, and the Silverstone cost program that many of you know about is progressing nicely, and the gross margin remained healthy. So, the profitability remains in line with our expectation. Specifically, on the Q4, EBIT margin is expected to land at around 33.5%.
And that's despite the significant external headwinds which we have flagged earlier on and that you're all aware about. And that's the headwinds from foreign exchange, commodities, tariffs, which total around 400 basis points in Q4. The EBIT margin of 33.5% in Q4 is quite a good outcome, considering that the EBIT margin in Q4 of 2024, the year before, was around 100 basis points higher only. As already said, this means that the full-year EBIT margin will land at around 24% and thereby in line with the expectations we set out in the third quarter announcement.
For the sake of good order, I just want to stress that these numbers that we have announced today are still unaudited and therefore preliminary. With that, I'll hand it back to Berta for the closing comments.
Yeah, thank you, Anders. So, to conclude, so that we can go back to the questions, while our recent performance has come below expectations, the fundamentals of our business remain very strong. The brand is healthy, our core collections are solid, and our vertically integrated supply chain and scale do remain very powerful assets. Now, that said, quarter four and full-year 2025 results came below our standards and commitments. Now, after several years of outpacing the category and driving solid growth, of course, operating in a more complex environment requires us to be more demanding in how we generate growth.
This means to be sharper on what works and decisive in course correcting where momentum has softened. Today, of course, this is not a comprehensive update. You will hear more of that in a few weeks. However, some priorities are already clear. A key focus for us is to re-energize our collections and strengthen brand relevance. This approach is particularly important in mature markets. Now, we are also focused on addressing the impact of high silver prices and are moving at pace on actions across new products and materials to protect margins and improve value creation.
So, to close, there remain significant untapped opportunities for Pandora as a desirable, accessible jewelry brand. And we are moving with discipline and rigor to strengthen brand desirability and position Pandora for long-term value creation. I am really looking forward to sharing more details with you on our call on February the 5th. And with that, I'll hand over to Bilal.
Thank you, Berta. We can open up to Q&A. I also want to highlight any questions relating to 2026 top line or EBIT margin. We will not answer right now and get back to you on the 5th of February for a comprehensive view. With that, we're happy to open up to Q&A.
If you do wish to ask a question, you will need to press five-star on your telephone. So, regarding questions, press five-star again. In the interest of time, we ask that you please limit yourself to one or two questions. If you have additional questions, you may rejoin the queue. Our first question will be from the line of Grace Smalley from Morgan Stanley. Please go ahead. Your line is now unmuted.
Great. Thank you very much. First question would just be on the U.S. weakness, and if you could just elaborate more on what you saw there during the holiday period, so any color on traffic versus ASP and conversion. Any detail of breaking that down by region within the U.S.? And it sounds like, Berta, you believe that this was really more market-driven than necessarily company-specific or execution issues, but again, if you could just dig into that a little bit more on what gives you confidence that that is the case.
And then my second question would be on Europe, where it's very clear you think there are some brand initiatives you can put in place to strengthen the brand's relevance in Europe, and I believe you have started to put some of those in place already in Italy. I guess, were you surprised that you didn't start to see an improvement in the Italian performance already in Q4, given some of those initiatives and what your initial learnings are from that market so far? Thank you very much.
Hi, Grace. It's Anders starting out on the first one on North America. As you know, in general, there's quite a lack of data available in this industry. And then combined with the fact that we are. It's just nine days into the new year. It is a bit limited what's available. But what led us to say what we announced this morning is a couple of data points. One of the things that we track is general street traffic. And we do that not just in the US, but across all markets. And what we saw across the 10 bigger markets, not just in the US, but the 10 bigger markets that we are operating in, it was only on one out of those 10 where the general street traffic, so not Pandora numbers, were positive in Q4.
The nine others, the general street traffic was negative, so not great. With the data that we have from ShopperTrak, that's the one that we are using, street traffic in the U.S. was negative as well in Q4, and we did a bit better than that, as we've done for quite some time, and still did that better, so that's one data point. The other data point we have is simply looking at the OECD's consumer sentiment, and that took quite a nosedive during the back half of 2025, and I'm just looking at my colleagues here.
I actually believe that U.S. consumer confidence reached the lowest since 1960 in the U.S. in November or December, so there's something happening there, and then I know that there are some credit card data available on the industry, and I guess you're close to one of them. I just announced one of them earlier today for the December numbers. And if you look at that, there is something that looks like the sort of lower end of the market, the accessible part of the market, is actually declining, at best, flat. So it's that sort of combination that has led us to saying that the macro actually did turn for the worse during the last couple of months, eight weeks of 2025 in North America.
Absolutely. Now, thank you, Anders. I'm taking on your second question because I think Anders covered the first one really well. Yes, in Italy, we have started doing certain things, and it's actually the analysis on the Italian market that has uncovered the issues, between others, that we need to focus on, which is about reinvigorating and re-energizing our collections, and what we actually see is that what we have done it, although it's very early days, but where we did something like, for example, with the launch of Minis and Talisman, this is getting a good, robust pipeline that is working in the Italian market.
But we need to do more of those across the collections, across all the collections, so we know that our Moments platform needs a little bit more of reinvigoration, so this is exactly what I was referring to. Progress is there. It takes time. We continue to monitor that and to follow on that.
Great. Thank you both very much.
Our next question will be from the line of Lars Topholm from Carnegie. Please go ahead.
Yes, just two simple questions for me. So given your like-for-like was positive for October, can you comment on the exit rate and maybe give some colors as to the exit rate across regions? That was the first question. The second question is, what has your average pricing been in US in Q4? Thanks.
Yeah, if I had more, I'll jump back in the queue afterwards.
Yeah, I'll take the first one, Lars, then hand over to Anders. But the sort of exit rate for the group, yeah, you're right. We said around plus four in October. So you assume flattish to slightly negative in terms of an exit rate from the quarter as well. By region, we won't get into too much specific color. But again, the numbers you see in terms of the quarter end won't be too drastically off the exit rate as well. And on to the second question, I will hand over to Anders.
Yeah, I'm just making sure that because I was just about to say just shy of 10, but it's just about that level, Lars. I'll double-check. Now, I'll say this and then I'll double-check. If it's not correct, then we'll just get back to you. Just around 10% year-over-year price increase for the full quarter. As the quarter went by, we did sort of pass the price increase comp in October of 2024. It was higher in the beginning and lower at the end. On average, just high single digit, 8%, 9% on average for the quarter up.
And maybe in that context, so it doesn't count as a third question, how was the promotional activity for you and for the whole market as you saw it in Q4?
It's basically been flat year-over-year. I think that's so it remains at a high level, but not worse than last year, so to speak. So there has been no sort of, even though we've seen that the general trading environment in November and December was soft, we didn't see sort of also additional crazy behavior, if I can put it like that, both for ourselves and the market.
Great. Thank you very much. I'll jump into the queue again. Thanks. Next up is Chris Wan from UBS. Please go ahead. You'll now be unmuted.
Volumes. I'll stick to two. The first one on the volumes in Q4. So if I remember correctly, in the Q3 conference call, you were commenting that the volumes in October were pretty much back to flattish, slightly down flattish. But given the price increase you had in Q4, is it fair to say that volumes for globally as a whole was down a single digit in the quarter? And do you think there's any self-help measures you can do, you can pull out of your pocket to kind of inject that volume momentum back to the brand?
And then secondly, on the OPEX control, I think based on the guidance, the expected gross margin, EBIT margin for Q4, it does seem like you have very strong OPEX control. But I'm just wondering if you can give a little bit more color in terms of the three main OpEx lines here. I'm talking about marketing, sales and distribution, admin costs. And especially given that like-for-like is generally quite muted. So I'm just trying to understand what was the OpEx lines that were driving this strong OpEx.
Hi, Chris. Also, let me start out there on units. If you look at the total units that were actually sold and that fits in the P&L for Q4, then unit is flat in Q4. That means that the revenue growth of 4% that we delivered in Q4 is consisting of flat units, zero units, and roughly 4% pricing increases. That's roughly the dynamic. Sequentially compared to Q3, sort of volumes are better as we had expected. Still, sort of only flat overall when we look at the total business. On the OpEx control, yeah, fortunately, a year back or so, when silver prices started going up, we institutionalized a structured cost program, the Silverstone cost program, as we call it.
Now the top line also has been softer in Q3 and Q4. That comes in quite handy that we have a machine rolling already that can help us sort of push up the hunt for decimals around the company and looking forward for lower cost. We have not been compromising marketing spending. I think that's important to straight out. It's all kind of other things where we have been dialing a bit up on the OpEx discipline, and we did that actually a while back when we saw already Q3 being soft, and then on top of that, of course, the like-for-like landed below where we had expected it.
The bonus programs are linked very much to like-for-like. That also means there has been some reversal of provisions in Q4, unfortunately, but that's kind of why you have programs like that in place. So that there's some variability in the OpEx lines that helps if you're missing a bit on the top line, then bottom line is protected. And then I didn't fully get the question on self-help. So maybe I missed something.
Is there anything more you can do on self-help going forward?
Yeah. That's a clear yes. It's the way to put it. We put in place. Go ahead, Chris. It sounds like. On volume.
On volume. Yeah. So I just wanted to clarify that volume comment. So Anders, you mentioned that volumes overall, total units are flattish in Q4 year-over-year. I guess that includes that 4% network expansion, right? If I look on a like-for-like basis, are volumes down mid-single digit?
Yeah. Yeah. Then you basically subtract the 4%. So you're right in your math, Chris.
Okay. Perfect. Thank you so much.
Our next question will be from the line of Anthony Charchafji from BNP Paribas. Please go ahead.
Yes. Good morning. Thank you very much for taking my question. I have two. The first one would be on the Fuel with more. So a big part of the story is to diversify Pandora outside charms. And we see that Fuel with more is now underperforming. Maybe that might be also a negative mix impact on it. So it's more to have your view on if you still see into next year Fuel with more outgrowing the core category and if you have any plan in terms of newness in this category. The second question is on the pricing. So actually, Europe is stabilizing. I think that you've got a bit of pricing in Europe, probably 3% in October. Just wanted to have some feedback on how did it go and what are the next step in terms of pricing. Thank you.
I'll take the first one, Anders. So yes, on Fuel with more, you alluded to it. It's mixed. It's part of it because Timeless grew at 3% and Essence continued to grow in the year. And if you look at what happened this year, it's that we innovated mainly on the core, which has a very decent sustained performance with the launch of Talisman and Minis and all the activations that we put behind. So I come back into what we are doing now is re-energizing all the collections, whether they are in the core to refresh our icons or whether it's about extending and expanding what is Fuel with more.
Yeah. And then on Anthony, on the pricing in the year, you're right that we did some price changes back in October. And it looks okay. It's still early days. And the reason I'm saying that is that it becomes, when you go through these two months, eight weeks, or six, seven weeks of holiday trading, it becomes a little bit more blurred because there's so much going on, so much promotion going on. But it looks like it was the right decision. We have not sort of shouted out in general that we have changed pricing. So we do expect to see that step by step that the unit uplift becomes better.
But so far, we are on track compared to what we set out to do back in October. And on pricing for looking forward, there's two stories. One is that the baseline is, think about that, we are back to the standard model algorithm of 1%-2% pricing per year. That's our starting point. We've done quite a lot on pricing in 2024 and 2025, and now think the 1%-2 points that helps offset annual salaries, inflation that hits the P&L, where the jury is still out. That's what the significant increase in silver, gold, and tariffs, how that plays out in retail prices in the industry.
Yeah, that could lead to something beyond the 1%-2%, but we have not concluded that yet and what exactly that means, but of course, we are hit by higher silver and gold as and when hedging expires. All other brands will be that as well, maybe even more. So given that our gross margins are relatively higher and thereby the relative hit that we get from higher commodity prices is less than the industry in average. So something will happen. But exactly how that plays out, we're not ready to talk about yet.
Okay. Thank you. And just on hedging, I mean, you didn't resume hedging since we last spoke during the Q3 conference call. So still 25% unhedged for 2026.
Yeah. And I'll give it. You're right. And I'll give a slight nuance to that. I'll say we are at least 75% hedged for 2026. But we'll talk a bit more about that on February 5, obviously. But given sort of what we have, sort of the mix of what we are selling, there's a little bit less silver consumption and a few other more technical elements means that we have a bit more than 75% hedged for 2026. So that will still be a hit from silver being much higher since we last spoke, but a little bit less than the 25% unhedged would otherwise lead to.
Okay. Thank you.
Next up is Daria Nasledysheva from Bank of America. Please go ahead. Your line is now unmuted.
Hello everyone. Thanks for taking my questions. This is Daria from Bank of America, and I have two. So the first one would be that the press release mentions that you will be sharing your thinking on commodity exposure already in February. Will we know your entire plans and metal strategy at the time of full year guidance? Because I believe before you were mentioning that you were planning to share this with the market a bit later in the year. Is the thinking accelerated around this? So just wondering on the timing of communication and what we will actually know at what point.
And my second question is a little bit more on the cost lines. I think there was another question before, and sorry if I missed. Did any of the margin support in Q4 come from marketing? How are you thinking about the brand revitalization and re-energizing the brand into next year and managing with the marketing versus the rest of the costs? Thank you very much.
Hi. Thank you, Daria. Nice talking to you, and so let me just say, so in February, I will be directionally saying what are we going to be our main areas and levers that we will tackle for the material strategy, so we will provide more clarity versus what we have said now, and that's what you can expect on February. I think the next question was on the line, so you can take that, but let me just start by saying before we talk numbers that as a brand builder, I will not sacrifice marketing investments, and we have continued to invest on the brand this year to keep the strength of the brand, and Anders.
Yeah. Hi, Daria. On marketing, the marketing as a % of revenue in Q4 was in line with the prior year. So just stressing the point that we're just not sacrificing that.
Thank you very much. That's clear.
Our next question will be from the line of Martin Brenøe from Nordea. Please go ahead.
Hi. Thank you very much for taking my questions. Maybe just to you and us, the first question here would be how you think about the situation that you are in right now and the deterioration that you've seen on a like-for-like basis, whether you are changing your scenario a little bit in terms of the network expansion and general cash protection, thinking about also payout rates, etc., whether you are in a situation now where you need to hold back a little bit to protect yourself. And then second question would be to Berta about the product innovation.
I think looking back at 2025, you have seen Talisman and Minis, but it wasn't maybe the year where we saw the most product launches through the year. So I'm a bit curious whether we should see more gradual all-year-round product launches in 2026. If that's how we should view it, it would be super helpful. Thank you.
Hi, Martin. Yeah, good and super relevant questions on the network expansion. I think the short answer is that it doesn't change the plans. But of course, if we saw just hypothetically like-for-like being and where we saw it in Q4, and which is a combination which is not a secret of online business growing and like-for-like in the physical stores being a little bit below zero, not a surprise. If that were continued, okay, then we will have to sit down and rethink the network. But we will continue to be super selective and picky in how we are deciding where and when to open up new stores.
The stores that we have opened up in 2025 are very profitable. It's really strong investments. You know the story, but with the payback in a year, it's quite real, accretive as well. It's still the, yeah, that's the starting point we want to communicate that has no change, no change there. But on the payout ratio, I think you're probably thinking 2027. Where silver prices are today as a starting point, if we did nothing, just sitting on the hands, that would be quite an impact on the EBIT margin and thereby indirectly cash and leverage as well. I think the answer lies in could there be a temporary consideration to do on cash distribution that links into how fast are we mitigating the impact of silver being in the high 70s.
As you know, hedging runs out in a year's time. And how fast can we mitigate that. That and as we go through 2025, we will sort of 2026, we will update you on that. The first update comes in a couple of weeks on February 5 on how fast we can move forward on the silver price mitigation.
Yeah. And then on your second question, I think somehow in your question, you had the answer, which makes it easier. Yes, we will be gradually. You should expect that we gradually be bringing more impactful designs and storytelling. You are absolutely right. In 2025, you named some of the major launches. If I'm really honest with ourselves, I think the main one that we did was Talisman and some collaborations where we did major launches that were properly supported, we performed well where our designs were just familiar design variation.
We are either stagnating or declining. So yes, you should be seeing more of those. But important to know that everything that we do is based on facts and data. So when we launch something in new collection, we'll be design-driven but consumer-validated. When we go into new aesthetics, we'll be very selective and it will be done in a very controlled manner and with discipline.
Thank you so much for taking my questions. Very helpful.
Our next question will be from the line of Anne-Laure Boursier from HSBC. Please go ahead. Your line will be unmuted.
Yes. Hi, thank you for taking my question. I have two questions. The first, I know you have changed the reporting, but can you give a bit more granularity of the performance for the rest of Pandora that slowed down also? And also the second question is about the gross margin. Can you give us the gross margin bridge for Q4, the building blocks? Thank you.
It's a little bit early on the gross margin bridge, but just to give you one data point, if you sum up the last year, that's now two years ago, but Q4 2024, the gross margin was 79.8% and we're delivering around 78% in Q4 this year. So let's call it 180 basis points down. And in that mix, if you combine commodity, FX, and tariffs, we're getting to, I'm just doing the math in my head here, 310 basis points. Let's call it 300 basis points of external headwinds in Q4. And that's pretty much, I think we spoke pretty much about that in the third quarter announcement, but 300 basis points down across those.
So out of the 310 basis points of headwind, we are mitigating what is that, 140? So roughly half in the, and then the rest is bits and pieces, to be honest. It's those three that are the big drivers in the corner. And yeah. And then on record, Pandora, you're right, we are moving gradually towards the new disclosure, but it was predominantly Spain was super strong, as was Portugal. And it was Mexico, which was sequentially slightly weaker in that quarter. You can see that in Latin America where Mexico is disclosed into the new disclosure as well. And everything else was broadly similar in general. But I can get back to you on that as well.
Thank you.
Our next question will be a follow-up from the line of Lars Topholm. Please go ahead.
Yes, I do have one more question. And I know you said you will not comment on 2026, and I of course fully understand and respect that. But still, you have given a 2026 EBIT margin guidance of 23%. The fact that you don't change that in this announcement, does that implicitly mean it still stands, or is it just suspended or question mark? That's my question.
That's a good way of asking a question, Lars. No, we are not guiding for 2026 yet. When we made the guidance or the soft guidance, however you frame it, at the third quarter announcement saying around 23% EBIT margin, that was based on a silver price of $48 per ounce. Yeah, just looking at per ounce, $48. Now it's basically $30 higher. And there will be some hit from that on an isolated basis of the higher silver price in 2026, given that we are not fully hedged. But it will be less than what you can just mathematically calculate because the hedging will be a little bit more than the 75%.
So yeah, net net, it's still a bit too early. I would also say that we, as you can see in the Q4 numbers, the cost machine is also up and running. So there's, as always, an opportunity to protect the margins through looking at the cost line as well, depending on where the top line is landing. But net net, yeah, it's too early to guide on 2026. We'll do that on February 5.
That's perfectly clear, and thanks for answering my question.
Thank you. We do have André Thormann on the line. Please go ahead.
Thank you so much. I just had one question. Sorry for jumping in so late. But I just wondered about Talisman. I recall that it was a significant contribution to the 4% like-for-like growth in October. So can you talk a bit about how that performed in November and December? Thanks.
Yeah. Talisman continued to perform well in Q4, and I think one way you can see that indirectly is in the, if we, when we go and we come out with a full year announcement, you'll see that the Pandora ME is growing quite nicely because Talisman sits as part of the Pandora ME collection, and there's quite nice growth in there, and that's driven by Talisman, so it is a new design aesthetic, an addition to the brand that we are quite happy about.
No, yes. I'm sorry, I missed the question in the beginning. That's why André just started answering as well. Fully agree. And you will be able to see that more. Just an interesting data point as well is that what we are seeing is that in the mature markets such as Italy, we know that it's actually overperforming, which is again another sign that in markets where there is a little bit of fatigue of some of our other products when we bring some news overperform versus the rest of the market. So everything that we are talking is helping there as well.
All right. Thanks, Mark.
Next up is Alison Liger from Deutsche Bank. Please go ahead. Line will be unmuted.
Hi, good morning, and thanks for taking my question. I just had one, and so following on from what Grace was asking, I think at the top of the call, in terms of the US, it's clear that the macro backdrop has been really unhelpful. Are we, to take from your commentary on footfall, that it was all transactions that kind of came in beneath where you were expecting, or did you see any kind of changes in terms of basket size, items per basket? Just interested in terms of how that weaker US consumer is really translating through into the baskets you're seeing. Thank you.
What we've been seeing is actually traffic. Traffic really has slowed down, and also important to know that despite that our traffic was lower for Pandora, we actually outperformed the overall market. What we are seeing as well, and you will be reading the same report that we are, is that this is not only unusual for Pandora. What we are seeing is some of our competitors announcing a soft holiday period, and we see as well consumer sentiment being lower on the more accessible market socioeconomic, so yeah, what we are seeing at the moment is really traffic and no other changes on all the other metrics.
Okay. Thank you.
Thanks.
Thank you. As no one else has lined up for questions, I'll now hand it back to the speakers for any closing remarks.
Brilliant. Thank you very much, everyone, for taking the time today. And we'll be back to you in February.