November 4, 2020

Jewelery maker Pandora warns new lockdowns may hurt peak season sales

categories : fashion

The number of customers visiting stores was about half compared to last year but fewer were window shopping

COPENHAGEN: Danish jewelery-maker Pandora said on Tuesday positive sales momentum in the third quarter had extended into October but new coronavirus lockdown measures created uncertainty about peak season sales and its full-year guidance.

Pandora, the world’s biggest jewelry maker, saw positive sales momentum in the third quarter continue with like-for-like sales growing 8 percent in October, but said new lockdowns would force it to temporarily close at least 18 percent of its 2,700 shops worldwide in November.

“We have a very, very strong underlying sales momentum across markets,” CEO Alexander Lacik told Reuters, adding that online sales continued to “perform extremely well.”

The number of customers visiting stores was about half compared to last year but fewer were window shopping, and the higher proportion of buyers offset the lower number of total visitors, Lacik said.

Pandora, best known for its customisable silver charm bracelets, last month revised full-year profit guidance upward.

But its organic sales growth forecast for the year in the range of minus 14 percent to minus 17 percent, and EBIT margin at between 17.5 percent and 19 percent, assumed less than 10 percent of its shops would be closed.

“From what we know now, we believe we can recoup enough volume in e-commerce to keep us within the boundaries of our guidance,” Lacik said, adding that it did not take into consideration the impact of possible store closures in key markets like Italy, Spain and the US.

Pandora said third-quarter sales fell 8 percent to 4.07 billion Danish krone ($637 million).

Earnings before interest and taxes (EBIT) excluding restructuring costs between July and September declined 21 percent to 702 million crowns, with EBIT margin at 17.2 percent.

Pandora’s shares, which have almost tripled in value since early March, were trading 2.4 percent higher in early trade.

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