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Pandora Stands by Forecast Amid Recession Fears

Nov 8, 2022 7:55 AM   By Leah Meirovich
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 Pandora is holding steady in its sales projections for the year as it rolls out plans to withstand a possible recession, and even expects to hit the upper end of its predicted revenue.

Sales will rise 4% to 6% on an organic basis for 2022, the Danish jewelry retailer predicted Tuesday. The company expects revenue for the full year to be between DKK 25.9 billion ($3.48 billion) and DKK 26.4 billion ($3.55 billion).

“Despite macroeconomic and geopolitical uncertainty, the shopping patterns of our consumers is so far largely unchanged,” said Pandora CEO Alexander Lacik. “With strong financials and our position in affordable gifting, we are well equipped to weather a potential recession and seize relevant investment opportunities, for example to expand our store network. We are already now taking precautionary measures to ensure our profitability should circumstances change.”

The company’s sales increased 3% on an organic basis to DKK 5.26 billion ($706.8 million) in the three months ending September 30. The growth was slower than last year’s 14% hike — which was buoyed by government stimulus checks — but sales were 13% higher than for the same period of 2019, Pandora explained. While sales benefited from the jeweler’s expansion of its store network, a portion of that was offset by the closure of the company’s stores in Russia and Belarus in response to the conflict with Ukraine, it noted.

During the period, the company launched its Diamonds by Pandora lab-grown range in North America, which was well received, it said. Since its debut, the collection has comprised nearly 5% of total revenue from the 269 stores in which it is available. Pandora plans to add new products for the holiday season, including a 2-carat lab-grown diamond ring.

Online sales slipped 11% year on year in the third quarter but rose 75% versus 2019, representing 16% of total revenue for the period. Profit advanced 16% versus the same period of 2021 to DKK 734 million ($98.7 million).

Although Pandora kept its guidance unchanged, it is still assessing any possible repercussions from ongoing challenges.

“Pandora continues to expect certain headwinds from Covid-19 in China,” it said. It also noted there was a fire at the company’s European distribution center on October 30. “Given that peak season is coming up, the speed of reestablishing operations in the facility is of the essence, and every day counts. Assuming that the distribution is back to normal operations in three to four weeks, Pandora expects some, but manageable, financial impact in the fourth quarter.”

Image: A Pandora store in Harrogate, UK. (Shutterstock)
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Tags: Alexander Lasik, Diamonds by Pandora, Jewelry, lab-grown diamonds, Leah Meirovich, Pandora
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