Pandora’s Lab-Grown Diamond Line Coming to the US

Copenhagen, Denmark—Pandora posted strong third-quarter revenue growth as U.S. sales stayed strong, and once again upped its financial guidance for the year ahead.

The company also announced plans to begin the worldwide roll out of its lab-grown diamond line, “Pandora Brilliance,” in 2022 after a successful test run in the U.K.

The line includes rings, bangles, necklaces and earrings, each featuring a lab-grown diamond hand-set in sterling silver or 14-karat yellow or white gold. The collection’s motif is a take on the infinity symbol.

The Danish jewelry company’s third quarter revenue rose 16 percent to 4.73 billion Danish kroner ($736.2 million), compared with 4.07 billion Danish kroner ($633.7 million) in the third quarter last year.

It reported organic growth of 14 percent compared with 2020, while its sell-out growth (sales in Pandora-owned and -operated stores) of 5 percent year-over-year fell short of analyst expectations of 14 percent.

For the first nine months of the fiscal year, Pandora’s revenue is up 29 percent year-over-year.

“We are very pleased with the strong sell-out growth in the third quarter. [The] U.S., our largest market, continued the outstanding performance, yet again ahead of market growth,” said CEO Alexander Lacik in a press release about the results.

By sales channel, Pandora-owned retail stores, including the online store, brought in 3.09 billion Danish kroner ($482 million) in the third quarter, up 11 percent from the previous year.

During the third quarter 2021, around 5 percent of Pandora’s physical stores were temporarily closed due to COVID-19 restrictions. In the U.S, 1 percent of stores were closed in the quarter.

The company operated 2,616 concept stores as of the third quarter, 14 fewer when compared with the third quarter 2020. 

It plans to close 50 of these stores, at the high end of its prior guidance of 25 to 50 closures.

Wholesale sales in the third quarter were up 30 percent to 1.45 billion Danish kroner ($225.9 million).

Online sales in the quarter were up 2 percent compared with 2020, and up 94 percent when compared to pre-pandemic 2019.

Pandora’s “click-and-collect” program—its buy online, pickup in store service—accounted for 15 percent of U.S. online sales.

The service rolled out to France, Italy, Germany and Australia in the third quarter.

In the U.S, Pandora’s largest market, sell-out growth was strong in the third quarter, up 29 percent compared with 2020 and up 59 percent compared with 2019. Pandora attributed the growth partly to a boost from the stimulus packages.

The company has cut down on its promotional activity, noting that 98 percent of revenue in the region came from full-price sales.

Sales in Asia-Pacific continued to struggle amid COVID-19 restrictions while key European markets rebounded, including the U.K., Italy, and Germany, as stores began to reopen.

Looking ahead, Pandora upped its financial guidance for the fiscal year again.

It expects organic revenue growth to range between 18 to 20 percent, topping its previous estimate of 16 to 18 percent growth.

Guidance for EBIT margin rose to 24-24.5 percent from 23-24 percent.

The updated guidance is dependent upon there being “no other material COVID-19 restrictions implemented,” said Pandora in its presentation.

The new guidance also presumes that COVID-19 will not have a major negative impact on its production and supply chain.

Forecasting an uptick in demand for its jewelry, the company is building up its manufacturing capabilities, planning to build a new facility in Vietnam, and will expand the production capacity of its two facilities in Thailand.

The company plans to expand its manufacturing capacity by around 60 percent, or 80 million pieces of jewelry annually.

Editor's Note: A previous headline for this story said "Pandora Brilliance" would launch in the U.S. in 2022. The rollout will begin in 2022, with launch dates for individual countries to be announced later.