Financials

Pandora Posts Strong Q1 But Warns of US Slowdown Ahead

FinancialsMay 04, 2022

Pandora Posts Strong Q1 But Warns of US Slowdown Ahead

The company said the “affordable” jewelry market in the U.S. is growing slower than the overall market.

Pandora posted double-digit revenue growth in its first quarter but remains cautious about the year ahead in light of the war in Ukraine, COVID-19, inflation, and higher interest rates.
Copenhagen, Denmark—Pandora posted strong first-quarter results and raised its sales guidance for the year ahead.

Still, the company remains cautious about its fiscal future, noting the war in Ukraine, COVID-19, inflation, and higher interest rates could all negatively impact consumer demand.

“We are very pleased with the strong start to the year delivering record revenue for a first quarter,” said CEO Alexander Lacik. “All of our product platforms support the growth in Q1, as our ability to continuously offer new innovation pays off.”

Here are five key takeaways from the Danish jewelry company’s quarterly results.

Pandora’s quarterly revenue climbed double-digits.

First-quarter revenue was up 26 percent year-over-year to 5.7 billion Danish kroner ($805.4 million) compared with 4.5 billion Danish kroner ($637.1 million) in the first quarter last year.

It reported organic sales growth of 21 percent year-over-year.

Its sell-out growth (sales in Pandora-owned and -operated stores) was 17 percent year-over-year.

The company had a strong Valentine’s Day, with sales up about 30 percent year-over-year.

By sales channel, Pandora-owned retail stores, including the online store, brought in 3.9 billion Danish kroner ($555.7 million) in the first quarter, up 33 percent from the previous year.

Wholesale sales in the first quarter were up 15 percent to 1.6 billion Danish kroner ($221.8 million).

Pandora said its online sales performed well compared with 2019 levels, but were down compared with the previous first quarter, when COVID-19 lockdowns were in place.

Online organic growth was around 155 percent compared with the first quarter of 2019 and was the main contributor of growth from a channel perspective compared with 2019, said Pandora.

Given its strong first quarter, Pandora has upped its fiscal guidance for the year ahead.

It now expects organic revenue growth of 4 to 6 percent, up from its prior guidance of 3 to 6 percent. Its EBIT margin of 25 to 25.5 percent remains unchanged.

The U.S. market remains strong, but Pandora predicts a slowdown ahead.

In the United States, Pandora’s largest market accounting for 29 percent of total revenue, sales were up 19 percent in the first quarter.

Quarterly revenue in the U.S. totaled 1.7 billion Danish kroner ($233.6 million), up 19 percent year-over-year.

The U.S. market saw organic growth of 62 percent compared with Q1 2019 and has performed in line with Pandora’s expectations, the company said.

The Marvel collection did especially well in the U.S.

However, Pandora said it expects to see a “slowdown” in the U.S. market in 2022, noting the stimulus checks distributed in March 2021 boosted sales, making for tough year-over-year comparisons in Q2 2022. 

“Data indicates that the overall U.S. jewelry market has grown 11 to 18 percent in Q1 2022 and thereby above Pandora US. However, data also suggest that the affordable jewelry market has been growing much slower than the overall jewelry market,” said Pandora.

 Related stories will be right here … 

Pandora has been growing its footprint in North America.

In January, Ben Bridge Jeweler announced it was returning 37 Pandora stores, including 32 in the U.S. and 5 in Canada, to Pandora, looking to concentrate on its core business.

Pandora’s presence has grown especially strong on the West Coast, as 20 of the acquired Ben Bridge stores are located in California.

The acquisition is expected to give Pandora 170 million Danish kroner ($24.1 million) in incremental revenue for the full year, converting wholesale revenue to retail revenue.

The company also announced plans in February to open 28 shop-in-shops in Macy’s as it looks to increase its U.S. market share.

“The long-term aim is to double the U.S. business vs. 2019 and 62 percent organic growth vs. 2019 this quarter is an encouraging path toward this goal,” said Pandora.

“Pandora Me” and Marvel collections were top performers.

Pandora broke down its sales into “global business units,” or collections.

The “Pandora Me” collection saw revenue more than double, up 144 percent for the quarter.

Revenue from its “Collabs” collection, meaning collaborations, climbed 54 percent.

The company launched a Marvel collection in February, drawing jewelry inspiration from Avengers characters like Iron Man, Black Panther, The Hulk, and Captain America.

“The Marvel collaboration is building on Pandora’s strong relationship with Disney and proved an imminent success in the quarter. Marvel alone accounted for 3 percent share of business and has so far been outperforming the initial launch of both Star Wars and Harry Potter,” said Pandora.

Sales of the “Pandora Moments” collection grew 26 percent.

The “Pandora Brilliance” collection, which includes its lab-grown diamond jewelry, saw sales up 9 percent.

It was tested in the U.K to a positive reception and the company plans to roll it out this year, but said no new tests were conducted in the first quarter.

The company did test out a new loyalty program, My Pandora, in France, with plans to introduce it to more markets in 2023.

The test launch was conducted online and in 20 stores, with 50,000 consumers signed up in the first four weeks.

“My Pandora will further improve Pandora’s access to quality consumer data and with the new loyalty program, Pandora will be able to target the consumers directly with content of their interest,” the company.

Pandora is also creating a digital hub in London to attract digital and marketing talent.

Pandora has taken a strong stance against Russian goods.

Pandora made headlines last month when it announced it was leaving the Responsible Jewellery Council, citing the organization’s refusal to cut ties with Russian companies.

It was one of the first to do so, alongside Richemont, and followed by Kering, Watches of Switzerland, and others.

Pandora said it didn’t see any “major impact” on performance due to the war but has suspended business with Russia and Belarus.

Russia, Belarus and Ukraine combined accounted for about 1 percent of revenue in 2021, said Pandora.

“The 153 concept stores and 66 other points of sale in those markets are no longer considered part of Pandora,” said the company.

Pandora operates 2,432 concept stores as of the end of the first quarter, down 227 from the previous first quarter.

Pandora is planning to continue to increase its store network, expecting to open a net 50 to 100 concept stores worldwide.

Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

Supplier BulletinMay 26, 2022
Extraordinary Italian Jewelry at JCK and COUTURE

Sponsored by Italian Trade Agency

SourcingMay 26, 2022
Q&A: Deciphering De Beers’ Blockchain Platform

David Prager virtually sat down with Editor-in-Chief Michelle Graff to answer questions about the rollout of Tracr at scale.

AuctionsMay 26, 2022
Bonhams New York Jewels Auction Is a White Glove Sale

Jewelry and objects belonging to Bette Midler, heiress Hélène Irwin Crocker Fagan, and Lady Sylvia Ashley were among the highlights.

Brought to you by
Dive into GIA’s Pearl Expertise

When it comes to knowing the identity and quality of your pearls, count on GIA as your independent pearl experts.

TechnologyMay 26, 2022
State of Retail: The Pros and Cons of 4 Jewelry-Selling Platforms

From “old-school” eBay to new kid on the block 1stDibs, we asked jewelers about their experiences selling jewelry in non-traditional places.

Weekly QuizMay 26, 2022
This Week’s Quiz
Test your knowledge of the latest jewelry news with this quick test.
Take the Quiz
Policies & IssuesMay 26, 2022
Barbara Wheat Named Executive Director of Ethical Metalsmiths

She has nearly 30 years’ experience in the gem and jewelry industry and a background in nonprofit management.

EditorsMay 25, 2022
7 Standout Tiaras in Sotheby’s Platinum Jubilee Exhibition

Senior Editor Brecken Branstrator chooses the pieces she’d most want to see in person.

Brought to you by
A.I. Grading is Changing Conversations at the Retail Counter

Advanced technology levels the playing field, helping jewelers give customers what they want.

MajorsMay 25, 2022
Anne Hathaway Is Bulgari’s Newest Ambassador

The actress joins Zendaya and others in a new advertising campaign.

IndependentsMay 25, 2022
The Mexican Shack to Close After 47 Years

Owner Steve Delzio shares his thoughts on retirement after nearly five decades in the jewelry industry.

IndependentsMay 25, 2022
Designer Theo Fennell Has Written a Memoir

“I Fear for This Boy” takes readers through the ups and downs of his business and is available for pre-order now.

IndependentsMay 25, 2022
MVEye, Wedding Report Partner on New Jewelry Research Platform

“Today’s Wedding Jewelry Consumer” shares data about engagement ring market size, lab-grown and natural diamonds, and more.

ColumnistsMay 24, 2022
The PR Adviser: 10 Questions to Contemplate

Columnist Lilian Raji wants to walk you through the customer journey. But first, she’d like you to answer a few questions.

Events & AwardsMay 24, 2022
8 Gold Jewelry Designers Unveil New Platinum Designs

Several Couture brands have partnered with Platinum Guild International ahead of the jewelry trade show.

Lab-GrownMay 24, 2022
Kendra Scott Unveils Lab-Grown Engagement Ring Collection

The jewelry company is moving into bridal just a month after branching out into the watch world.

SourcingMay 24, 2022
State of the Diamond Industry: Where Does Supply Go From Here?

The 2008 economic crisis, COVID-19, and sanctions on Russian goods have set the stage for an interesting decade for natural diamond supply.

Events & AwardsMay 24, 2022
WJA to Host Diversity Keynote at New Las Vegas Breakfast Event

The Generating Community Impact fundraiser on June 11 will feature Karine Bah Tahé of Blue Level Training.

WatchesMay 23, 2022
Steven Kaiser, Watch Industry Veteran and Beloved Mentor, Dies at 68

Kaiser, whose illustrious career spanned decades, died suddenly on Friday.

IndependentsMay 23, 2022
Long’s Jewelers to Open New Location

The family-owned jeweler is relocating its Braintree, Massachusetts, store to a new space.

IndependentsMay 23, 2022
Luxury Goods Veteran Olivier Stip Joins Chicago Jeweler CD Peacock

He will step into the retailer’s newly created role of chief development officer.

GradingMay 23, 2022
Gem-A Launches Digital Entry-Level Gemology Course

GemIntro is meant to give a broad introduction to gems and gemology.

Recorded WebinarsMay 20, 2022
Watch: Responsible Sourcing and the Gold Supply Chain

Three industry experts discuss “recycled” gold vs. mined, their challenges and benefits, and how jewelers can navigate the area.

AuctionsMay 20, 2022
Piece of the Week: ‘Birds in Flight’ by Oscar Heyman

The New York jeweler made this incredible, colorful Art Deco bracelet featuring tropical birds in 1927.

SurveysMay 19, 2022
5 Predictions for Jewelry Retail in the Second Half of 2022

From a slowdown in sales growth to rising costs, Fruchtman Marketing outlines its expectations for the second half of the year.

MajorsMay 19, 2022
As It Nears 75, Here’s How Grandview Klein Stays Competitive

Once a part of Julius Klein Group, the diamond company combines its direct supply and cutting expertise with a keen eye to the future.

SourcingMay 19, 2022
De Beers’ Rough Sales Up 21% So Far This Year

One analyst cited rising diamond prices and the sanctions on Alrosa as contributing factors.

CollectionsMay 19, 2022
Brilliant Earth Collaborates with Jade Trau

The two have partnered on a capsule collection.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy