Pandora, the popular Danish jewellery maker renowned for its bracelets and charms, has announced better-than-expected profits for the third quarter and has adjusted its full-year sales outlook accordingly. The company witnessed a remarkable 11% growth in organic sales, surpassing initial predictions of 6% growth. Furthermore, the fourth quarter looks promising, with trading described as “healthy”. Consequently, Pandora has raised its forecast for full-year organic sales growth from the previous estimate of 2%-5% to an impressive 5%-6%. The company also maintains its expectation of maintaining an operating profit margin of around 25%.
Following these positive announcements, shares in Pandora experienced a notable 5% increase. The jewellery maker sells its products across 100 countries through 6,500 points of sale, including 2,500 concept stores. Despite a decrease in operating profit from 978 million crowns to 920 million crowns, attributed to rising costs, the figure still exceeded analysts’ predictions of 875 million crowns. The improvement in like-for-like sales was particularly driven by the U.S., where recent brand initiatives resulted in increased traffic. Considering the volatile nature of the retail environment, JPMorgan analysts highlighted the strength of Pandora’s performance. CEO Alexander Lacik attributes the successful outcome to the brand’s investments in attracting more consumers to their stores.
Pandora’s gross margin reached a record high of 79% thanks to cost savings and price hikes. Nevertheless, the operating margin experienced a decline due to higher commodity prices and fluctuations in foreign exchange rates. Nonetheless, the company anticipates a positive turnaround in the fourth quarter due to the net impact of these factors. Furthermore, Pandora reported an unexpected surge in demand across various markets and collections during the third quarter, predominantly driven by tourists. However, the company acknowledges that this particular trend may not be replicated in the corresponding quarter next year.
Useful links:
1. Pandora Official Website
2. JPMorgan Official Website
