Pandora plans to reduce silver use in jewelry, decoupling earnings from commodity swings after silver prices fell from $120 to $65 an ounce.
Pandora (PNDORA) will cut silver use in its products despite a sharp decline in silver prices, aiming to stabilize earnings. Silver, once a key driver of margins, fell from $120 to $65 an ounce this year, causing volatility in the company’s results.
The jeweler previously relied on silver for most of its designs, but price swings tied its performance to commodity markets. Management now seeks to reduce exposure, shifting to platinum plating for at least 50% of its offerings.
Shares surged following the announcement and a strong second-quarter report, reflecting investor approval of the strategy to insulate the business from metal price fluctuations.