Affordable luxury jeweller Pandora has reported full year results of DKK26.5bn (£3.2bn), a growth factor of 7% and above the 4 to 6% forecast.
21% of the brands revenues came from its online presence, just shy of the 28% garnered from third-party and wholesale distribution. The company’s 6500 stores worldwide brough in the remaining 51% of sales.
Pandora’s main market remains the US, accounting for 30% of sales, while the UK takes around 14% and Italy 10% – all remaining static since 2021. Sales in China, surprisingly, have dropped back from 5% of the total to just 3% this year. The retailer had planned in 2019 to triple its sales in the region, but investment has been put on hold here until the market reaches a post-pandemic level of stability. Australia, however, delivered the most growth at 6%.
Alexander Lacik, President and CEO of Pandora, says: “We ended 2022 on a high note. Despite the macroeconomic pressure on consumers and COVID-19 headwinds in China, we continue to deliver solid growth vs. pre-pandemic levels. We have started 2023 well, and are confident that the transformation of the brand over the past few years puts Pandora in a good position to manage adversity and emerge stronger. In 2023, we will keep executing on our strategy, take market share, and accelerate network expansion while taking prudent cost actions to protect margins.“
Bloomberg Intelligence’s Senior Luxury Analyst, Deborah Aitken, adds: “Pandora sustained 3Q’s pace of growth into October, a positive indicator for the peak months of November and December, and possibly putting the company on a path to meet the high end of its full-year guidance range. That also lowers risks to inventory, which was raised ahead of the gifting season, while its affordable unit price seems well positioned to combat a squeeze on consumer spending.
“Looking ahead, a 4% price increase in 4Q adds to solid cost containment, while the “Diamonds by Pandora” launch in the US is off to a good start. Intact sell-outgrowth in key markets — such as the UK and Germany –and reopenings in Australia could extend the recovery.
“Pandora targeted organic growth of 4-6% in 2022 and an Ebit margin range of 25-25.5%. There should be limited drag from closings in China, which represents 3% of sales.”
