PANDORA is rapidly increasing its penetration in the demi-fine jewelry market, reporting organic growth of 18 percent to 6.83 billion Danish kroner, or $980 million, in the first fiscal quarter. The upbeat results for the three-month period led the Copenhagen-based jeweler to raise its 2024 revenue guidance.
It is now expecting growth to fall between 8 to 10 percent, compared to the 6 to 9 percent range previously stated. The company added that current trading in the second quarter has been “healthy,” with high-single-digit, like-for-like growth.
“Our strategy is delivering, and our market penetration has been growing year-on-year,” said Alexander Lacik, chief executive officer of Pandora. He acknowledged the market overall has been “sluggish,” but said Pandora has managed to grow its customer base by increasing its investments and focusing on “jewelry beyond the charm bracelet.”
Lacik added: “We look forward to fueling our growth with exciting strategic initiatives over the coming years.” He said the brand’s Timeless collection grew 43 percent in the three months, compared with the Core charm bracelet offer which was up by a midsingle digit. Pandora Lab-Grown Diamonds also saw progress, with 87 percent growth.
In the first three months, Pandora said like-for-like growth was 11 percent, while network expansion was 5 percent. In absolute terms, revenue increased by 1 billion Danish kroner, or $140 million, compared to the corresponding period last year. Underlying growth in key European markets and the U.S. was 9 percent, while the rest of the world grew by 18 percent.
Gross margin reached a new record-high of 79.4 percent, which the company said was supported by channel mix, pricing and efficiencies, as well as “some tailwind” from silver prices and foreign exchange rates. EBIT margin was 22 percent, “reflecting the strong growth [that] more than offset the planned step-up in marketing investments as part of the restaging of the brand,” the company said.
Analysts at Jefferies said the first-quarter numbers confirm a business in “strong shape,” with like-for-like sales accelerating later in the quarter, “and strong margin delivery continuing. This comes ahead of both the tougher second half comparative structure and the launch of the Essence product line.”
Pandora began pursuing its Phoenix expansion strategy last year with the aim of engaging as many consumers as possible, offering them value, quality craftsmanship and top-notch service. It has been engaging with the high-end fashion world, too, sponsoring fashion showcases and awards, and venturing into lab-grown diamonds and pearls.
Last year, it also launched the successful Be Love marketing campaign, featuring celebrities such as Pamela Anderson, Selma Blair and, most recently, sisters Chloe and Halle Bailey. Last fall, during its capital markets day, the company said it was planning 400 to 500 net openings between 2024 and 2026. Pandora currently has around 6,500 points of sale in 100 countries.
More than 70 percent of the stores are directly operated, and Pandora is increasingly looking to take back ownership of franchises in many established markets. The company said it is thinking and acting like a direct-to-consumer retailer. It is also building bigger, brighter concept stores that can accommodate the different collections and offer services to customers such as repair, cleaning, ear piercing and one-to-one appointments that can be pre-booked online.
In addition, Pandora said it plans to double revenue in the U.S. by 2025 (compared with 2019). In 2022, revenue in the U.S. was 7.9 billion kroner, or $1.12 billion. Revenue is expected to reach 34 billion to 36 billion Danish kroner, or $4.8 billion to $5.1 billion, in 2026 compared with an expected 27 billion kroner, or $3.8 billion, for 2023.
EBIT is expected to reach 8.8 billion to 9.7 billion kroner, or $1.2 billion to $1.4 billion, by 2026.
PANDORA Spring 2024 ad campaign
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