Danish jewelry maker Pandora has pleasantly surprised investors with its better-than-expected financial performance in the second quarter. The company has seen a quicker return of consumers to its stores than previously anticipated, leading to a revision of profit guidance. Now, Pandora is expecting to break even in terms of earnings before interest and taxes (EBIT) for the period, a vast improvement from the negative EBIT forecasted in May.
The closure of the majority of Pandora’s global stores during the first quarter due to COVID-19 lockdowns posed a significant challenge. However, by the end of June, 86% of the stores had reopened, signaling a positive turnaround for the company. The faster reopening of markets, recovery of foot traffic in stores, and strong online sales performance have all contributed to Pandora’s improved performance.
Despite initial worries about the impact of the crisis on Pandora’s future, the company’s stock price has more than doubled since mid-March. The substantial growth in online sales and the return of customers to reopened stores have been key drivers behind this upward trajectory. In fact, Pandora reported a nearly tripled increase in online sales during the second quarter.
Looking ahead, Pandora has kept its full-year guidance suspended, but it anticipates a positive and double-digit EBIT margin in the second half of the year, assuming no further lockdowns in key markets. While organic growth took a hit in the second quarter, there has been a slow but steady improvement in foot traffic to reopened stores, with June sales surpassing those of April and May.
The complete second-quarter results for Pandora will be released on August 18, providing a more comprehensive overview of the company’s financial performance and future outlook. With consumers returning at a faster pace than expected and a strong online presence, Pandora is optimistic about its recovery and growth prospects in the coming months.
For more information on Pandora’s financial performance and recovery, visit their official website here. Additional insights and updates can also be found on their investor relations page here.
