Pandora Raises Guidance for 2021
PARIS — Pandora confirmed that its revenues in the first quarter grew 13 percent in constant currencies and upgraded its guidance for 2021 after a strong start to the year.
The Copenhagen-based jeweler also lifted the curtain on a new strategic plan, and announced it will no longer use mined diamonds plus the launch of a share buyback program.
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Company sales in the three months ended March 31 reached 4.5 billion Danish kronor, or $728 million, a decline of 3 percent on an organic basis versus the same period in 2019. Numerous companies are offering comparisons with that year to give a measurement against a more stable period.
Compared to the first quarter of 2020, when 30 percent of its retail network was temporarily shuttered by coronavirus lockdowns, Pandora’s sales rose 13 percent.
Business online soared, with 136 percent growth in the first quarter of 2021, versus the same period last year, and more than 200 percent against first-quarter 2019.
The group said that stimulus packages drove consumer demand in the U.S., but that business in China, which continues to be a strategic priority, remains weak, although in line with expectations.
The company raised its financial guidance for 2021, saying it now expects organic growth to be above 12 percent, compared to the previously stated “above 8 percent.” The earnings before interest and taxes margin is now anticipated to be higher than 22 percent, against the former “above 21 percent.”
“Pandora has demonstrated impressive resilience against a challenging COVID-19 backdrop with healthy channel shift into e-commerce,” Piral Dadhania, an analyst at RBC, wrote in a note. “From here, we view its path to positive revenue growth as more challenging, and we remain cautious on its path toward positive retail [like-for-likes]. Consensus estimates are elevated from FY21E, and valuation is less supportive.”
Pandora’s president and chief executive officer Alexander Lacik said in a statement: “We had a good start to 2021, not least considering that many of our stores have been closed. Performance in the U.S. and online continues to be strong, and we keep investing in building brand desirability, digital capabilities and operating excellence.
“COVID-19 obviously remains a challenge, and our priority is the safety and wellbeing of our employees and consumers,” he continued. “During the last two years, Programme Now has significantly improved Pandora’s foundation, and I am pleased to say the turnaround is now behind us. Today, we can turn the page on the next chapter for Pandora and announce our new strategy, moving us from turnaround to sustainable growth.”
Programme Now, a two-year turnaround plan, had for objectives stabilizing the top line, increasing brand relevance and access, and reducing costs.
The name of Pandora’s new plan — Phoenix — was revealed Tuesday, as well as its mission.
“The strategy focuses on delivering sustainable and profitable revenue growth, building on the vast untapped opportunities within our existing core business,” the company said.
There are to be four pillars: brand, design, personalization and core markets.
The first initiative under this new strategy will be Pandora Brilliance, sustainably laboratory-created diamonds. Its launch will take place first in the U.K. starting May 6, with prices beginning at 250 pounds and sizes ranging from 0.15 to 1 carat.
More details of Phoenix’s strategic pillars will be disclosed at a Capital Markets Day on Sept. 14 in London.
Pandora also released its 2020 sustainability report with goals, including becoming carbon neutral and using only recycled gold and silver by 2025.
The company revealed the launch of a 500 million kronor buyback program between May 5 and Aug. 13. Its aim is to reduce the company’s share capital and to meet obligations coming from company incentive programs.
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