Despite a decline in second-quarter earnings, Danish jewellery manufacturer Pandora saw a rise in its shares on Tuesday, buoyed by signs of recovery in key markets like Britain and Italy, as well as increased restructuring efforts. The company’s shares, which had faced a 10% drop earlier in the month, rebounded with a 6.5% increase, reaching 248.30 Danish crowns at 0740 GMT.
Known for its customizable silver charm bracelets, Pandora has been grappling with challenges as its new jewellery lines failed to attract customers. To tackle this, the company has been repurchasing older ranges from franchises and streamlining its collections in a bid to boost performance.
Despite a 10% dip in sales from stores open over a year in the second quarter, there were signs of progress in crucial markets like Britain and Italy. These markets saw sales decrease by 8% and 10% respectively, showing improvement from the first quarter.
New CEO Alexander Lacik pointed out that a substantial rise in marketing expenditures in these markets had yielded positive results, with an impressive return on investment. This successful strategy will now be extended to other key markets to further enhance performance.
Pandora also revealed that restructuring expenses could reach “up to 2.0 billion” crowns, surpassing the prior projection of 1.5 billion crowns. Lacik explained that more areas needing improvement had been identified in the business, necessitating the increase in costs.
In a move to simplify its product lineup, Pandora will be reducing the number of variations in certain products, like the 150 different heart designs on charms. This streamlining process aims to offer better value to customers.
Financial analyst Soren Lontoft Hansen from Sydbank noted that investors are responding positively to the company’s acknowledgment of its challenges. Despite a 13.7% decline in second-quarter earnings before interest, tax, depreciation, and amortization, Pandora has maintained its full-year guidance. The company’s focused efforts on restructuring and prioritizing key markets appear to be bearing fruit, hinting at a potential turnaround for the Danish jewellery giant.
For more information on Pandora’s latest financial updates, visit Pandora’s Investor Relations page. To explore the company’s latest jewellery collections, head over to Pandora’s official website.
