Jewellery maker Pandora on Tuesday reported disappointing second-quarter sales in the US market, prompting its shares to fall, but reaffirmed its annual forecast, saying higher costs of living had not impacted jewellery buying.
Shares in Pandora, the world’s largest mass-market jewellery brand with more than 6,400 stores worldwide, fell more than 7 per cent after it said organic growth in the United States, its biggest market, was down 12 per cent year-on-year in the quarter.
It said shrinkage in the US market was due to the fading effect of coronavirus-related stimulus packages, which had boosted sales a year earlier.
“The United States has record low unemployment rates, salaries are going up quite a bit and people have high savings, so there’s plenty of disposable income still available,” chief executive Alexander Lacik said in an interview.
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Shares in Pandora traded as much as 7.3 per cent lower before recovering some ground to trade 3.15 per cent weaker ahead of lunchtime in the UK. The stock has shed over 35 per cent of its value since the start of the year.
Jewellery sales were not impacted by rising inflation, Mr Lacik said. “When we look our core metrics such as store traffic, basket size and average selling price across the globe and across every sales channel, we simply cannot see any discernible impact of high inflation,” he said.
He added that consumers are willing to accepts price rises for more expensive and refined pieces of jewellery, but that Pandora had so far kept prices for cheaper pieces mostly unchanged.
The world’s largest jewellery maker by production capacity said traffic into its 219 Chinese stores fell 60 per cent in the second quarter from a year earlier due to the impact of coronavirus-related shutdowns. That prompted the company to postpone a planned revamp of its brand in that market until next year, Mr Lacik said.
Second-quarter sales grew 10 per cent to 5.66 billion Danish krone (€761 million), compared to an average of DKr5.61 billion expected by analysts in a poll conducted by the company.
Pandora still expects full-year organic growth of between 4 per cent and 6 per cent and reaffirmed an outlook for an operating profit margin at 25-25.5 per cent. — Reuters
