Pandora products will be seen in stores at the Woodbury Common Premium Outlets in Central Valley, New York, USA on February 15, 2022. REUTERS/Andrew Kelly/File Photo
COPENHAGEN: Jewelery maker Pandora on Tuesday reported disappointing second-quarter sales in the U.S. market, prompting a decline in its share price, but reaffirmed its forecast for the full year, saying rising costs of living are expected to boost jewelery prices. He said it hadn’t affected his purchase.
Shares of Pandora, the world’s largest mass-market jewelery brand with more than 6,400 stores worldwide, said organic growth in its largest market, the U.S., fell 12% year-over-year in the fourth quarter. After that, it fell more than 7%. .
He said the contraction in the U.S. market was due to the waning effects of coronavirus-related stimulus that boosted sales a year ago.
“With record-low unemployment in the U.S., salaries rising considerably, and a lot of savings, disposable income is still ample,” Chief Executive Alexander Lasik said in an interview. .
Pandora shares were down 7.3% at 0810 GMT. The stock has lost almost 40% of its value since the beginning of the year.
Jewelry sales have not been affected by inflation, Lacik said. “When we look at key metrics such as store traffic, basket size and average selling prices across all sales channels worldwide, we don’t see any discernible impact of high inflation,” he said.
He added that while consumers are willing to accept higher prices for more expensive and sophisticated jewellery, Pandora has changed prices for less expensive jewelery little so far.
The world’s largest jewelery maker by capacity said traffic to its 219 stores in China had fallen 60% from the same period last year due to the impact of coronavirus-related shutdowns.
This has caused the company to postpone a planned rebranding in that market until next year, Lacik said.
Second-quarter sales increased 10% to DKK 5.66 billion ($773.33 million), compared to the average analyst forecast of DKK 5.61 billion in a poll conducted by the company.
Pandora expects full-year organic growth to be between 4% and 6% and reaffirmed its operating margin outlook of 25.0% to 25.5%.