2/7/2024

Pandora expects big sales in 2024

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Key points:

  • Jewelry brand Pandora expects revenue in 2024 to be 6-9% higher than in 2023.
  • The company’s shares rose 0.5% at the opening of the session.
  • Pandora’s sales in China fell 11% in the fourth quarter.

On Wednesday, Pandora, the global leader in jewelry manufacturing, reported favorable year-to-date performance, characterized by robust high-single-digit sales growth. Bolstered by this strong growth, the company unveiled a share buyback initiative.

Known for its charm bracelets available in a price range spanning from $60 to over $2,000, Pandora has solidified its position as a preferred brand for retailers catering to consumers seeking accessible luxury items.

Company forecasts and plans

The company is targeting organic revenue growth of 6-9% in 2024. It comes after reports of strong sales of its silver pendants and bracelets, which have helped its share price more than double since the start of last year. The growth target is in line with plans set in October for a compound annual growth rate of 7-9% from 2023 to 2026.

Pandora also announced a share repurchase program of up to DKK4 billion ($577.7 million) and a dividend of DKK18 per share. The company’s shares rose 0.5% at the opening of the session.

Pandora, which sold 107 million jewelry in 2023, up from 103 million in 2022, is growing its brand, opening more stores and moving away from wholesale.

In addition, the company said that its marketing expenses will increase in the first quarter as it refreshes its brand, which will impact its earnings before interest and tax (EBIT) margin in the first quarter. Pandora plans to achieve profitability of 25% by 2024 overall.

The Chinese market has been less successful for Pandora

In 2023, China contributed merely 2% to Pandora’s overall revenue, a notable decline from the 5% share observed in 2021. The country emerged as a weak point for Pandora, as fourth-quarter sales failed to meet expectations, dropping from 143 million crowns to 116 million compared to the same quarter the previous year.

The optimism for a robust economic rebound in China following the pandemic was shattered by a housing crisis and elevated youth unemployment in the past year. These factors restrained consumer spending, particularly impacting luxury brands.

Although marketing costs saw a 5% increase in 2023 when measured in constant currencies, the proportion of costs to revenue slightly decreased to 13.7%. In contrast, Pandora’s revenue in the United States experienced a 2% growth, reaching 8.3 billion crowns for the year. However, in China, revenue declined by 9% for the year, amounting to 564 million crowns.

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