A new addition to the “Heirloom” collection, this one-of-a-kind piece features 32 custom-cut gemstones.
Pandora’s Q4 Results Suffer as Weak Sales in China Take A Toll
CEO Alexander Lacik told Reuters the jeweler’s business in China is in “standstill mode” as a result of the coronavirus.
Copenhagen, Denmark—Pandora had a rough fourth quarter as weak sales in China and the cost of its brand relaunch weighed on its balance sheet but remains hopeful its turnaround plan is working.
In an interview with Reuters, CEO Alexander Lacik was frank about the “unprecedented” drop in the jeweler’s business in China as a result of the coronavirus, which has caused 400 casualties so far.
“As I sit here and watch the Chinese business, it is in a standstill mode, I mean there’s pennies being sold,” said Lacik.
He said 70 of its 240 stores in China have been closed by order of the government and customer traffic at its open stores “is next to none.”
Quarterly like-for-like sales dipped 4 percent year-over-year, but Pandora highlighted it as an improvement compared with the 7 percent drop in 2018.
Like-for-like represents true comparable sales out of stores that have been open for at least a year, excluding currency fluctuations.
For the full year, like-for-like sales were down 8 percent.
The numbers were in-line with those Pandora had announced in its preliminary financial results in January.
The company noted Italy, France, and Germany, three of its seven largest markets, showed improvement in like-for-like sales, while growth in the U.S. and U.K. also improved.
Pandora has completed the first year of Programme Now, its two-year turnaround plan, and points to the improvements as evidence that Pandora “is on the right path to return to sustainable growth.”
Fourth-quarter
Nigel Frith, a senior market analyst at AskTraders.com, pointed to Pandora’s improvement in fourth-quarter sales as “evidence that attempts to turn the fashion jewelry retailer around are starting to pay off.”
Full-year revenue clocked in at 21.87 billion Danish kroner ($3.23 billion), down 4 percent compared with 22.81 billion Danish kroner ($3.37 billion) in 2018.
By region, full-year revenue in the Americas totaled 6.77 billion Danish kroner ($1 billion), down 1 percent compared with 6.81 billion Danish kroner ($1 billion) in 2018.
Sales in Asia-Pacific were down 9 percent year-over-year to 4.36 billion Danish kroner ($644.3 million) while sales in Europe, the Middle East, and Africa dipped 4 percent to 10.74 billion Danish kroner ($1.59 billion).
By sales channel, its physical stores brought in 11.4 billion Danish kroner ($1.68 billion), an 8 percent increase year-over-year.
Online sales totaled 2.78 billion Danish kroner ($410.8 million), up 21 percent year-over-year.
Wholesale revenue totaled 7.69 billion Danish kroner ($1.14 billion), down 22 percent year-over-year.
By product category, sales of charms were down 6 percent year-over-year while bracelet sales dipped 4 percent.
Ring sales were down 2 percent while earrings sales were up less than 1 percent.
The sole gainer was the necklaces and pendants category, up 2 percent year-over-year.
Pandora recently introduced the O pendant, which allows customers to wear their Pandora charms on a necklace or clip them onto bags or jeans.
Quarterly organic growth—sales into stores (sell-in) plus sales from newly opened stores (also excluding currency fluctuations)—was down 1 percent, the same as the Q4 2018.
For the full year, organic growth was down 8 percent.
“In 2020, we will continue to invest significantly to drive the topline, strengthen our organizational capabilities and pursue further cost reductions to fund our growth initiatives,” said CEO Lacik.
Looking ahead, Pandora expects its like-for-like sales to improve from its 8 percent dip in 2019 to a negative “mid-single-digit” in 2020 while organic growth is expected to be down 3 to 6 percent.
The company said the like-for-like development in 2020 is a result of further reduction of its promotional discounts, an expected weak underlying performance in China, and an underlying improvement in performance in the majority of its other markets.
Pandora noted its guidance does not include any impact from the coronavirus situation in China.
Analyst Frith said spending in the key markets of China and Hong Kong are expected to be significantly lower than previous years.
“For Pandora, as well as many retailers with a presence in China and Hong Kong, the outlook for the year depends greatly on how the coronavirus epidemic unfolds and, of course, whether cases start to ramp up in Europe and the U.S. where up to now cases have been few,” noted Frith.
The jeweler said it will continue to open stores in “white-space areas,” meaning places where it believes there are unmet needs the company could fulfill.
Pandora said it plans to invest in its online channel while also considering “use of additional online marketplaces.”
There are 2,770 Pandora stores as of Feb. 4, 65 more than in 2018.
The Latest
Last month in Dallas, David Walton pushed another jeweler, David Ettinger, who later died.
The move will allow the manufacturing company to offer a more “diverse and comprehensive” range of products.
With Ho Brothers, you can unlock your brand's true potential and offer customers the personalized jewelry experiences they desire.
From now through mid-May, GIA will be offering the reports at a 50 percent discount.
De Beers’ rough diamond sales were down 18 percent year-over-year in its latest round of sales.
Sponsored by the Las Vegas Antique Jewelry & Watch Show
For over 30 years, JA has advocated for the industry, fought against harmful legislation and backed measures that help jewelry businesses.
The Patek Philippe expert will serve as personal curator for the brand-focused company.
The 553-square-foot shop is aboard the Carnival Jubilee cruise ship.
NDC filed a complaint against Skydiamond for use of phrases like “diamonds made entirely from the sky.”
John Carter received the AGS’s highest honor Tuesday afternoon at Conclave in Austin, Texas.
B&D Sales and Service held a ribbon-cutting event for its new location in Cranston, Rhode Island.
It’s ultra-feminine and filled with gold, pearls, and soft pastels.
Emily Highet Morgan and Emily Bennett have joined the agency’s team.
Its updated book for mountings is also now available.
She has been with the organization since 2010, most recently serving as its chief officer of PR and industry relations.
Joyce’s Jewelry sued the bank after cybercriminals drained its accounts of nearly $1.6 million through a series of wire transfers.
He is remembered by loved ones for his loyalty, integrity, and kindness.
Hosted by Freeman’s | Hindman, the sale will take place May 7-8.
The auction house said all 24 timepieces offered in its underground sale of rare and avant-garde watches quickly found buyers.
From lab-grown diamonds and AI to the inevitable Taylor Swift mention, here are some of Conclave’s most intriguing educational offerings.
From cybersecurity liability to trade show coverage, insurance experts share tips on how to build the right policy.
The charm is a modern rendition of the evil eye amulet that has been worn for thousands of years.
Ahead of its trade show next month, TJS awarded free registration and accommodations to one jewelry professional and three students.
By the end of this year, SRK’s diamond manufacturing complexes will achieve net zero emissions, one of an impressive array of achievements.
Members can still sell lab-grown stones, it said, but only natural gems are allowed on the show floor.