Pandora’s 2020 Sales Sink Despite Strong Online Performance

FinancialsFeb 04, 2021

Pandora’s 2020 Sales Sink Despite Strong Online Performance

The Danish jewelry company is approaching 2021 with caution as COVID-19 restrictions linger.

Physical traffic into Pandora-owned retail stores was down 60 percent year-over-year in the fourth quarter but the conversion rate was up, the company noted in releasing its Q4 and full-year results Thursday.

Copenhagen, Denmark—Pandora’s online sales nearly doubled in the fourth quarter and for the year, but the Danish jeweler is approaching fiscal 2021 with caution as COVID-19 restrictions continue to weigh on revenue growth.

Fourth-quarter revenue was down 1 percent year-over-year to 7.89 billion Danish kroner ($914.08 million) compared with 7.96 billion kroner ($921.6 million) in the fourth quarter last year.

Quarterly like-for-like sales were up 6 percent year-over-year. (Like-for-like represents true comparable sales from stores that have been open for at least a year, excluding currency fluctuations.)

The strong finish and jump in digital sales were not enough, however, to completely offset the loss in sales caused by COVID-19.

Full-year revenue fell 13 percent to 19.01 billion Danish kroner ($2.2 billion) compared with 21.87 billion kroner ($2.53 billion) in the previous period.

Like-for-like sales were up 1 percent.

CEO Alexander Lacik described the year as “truly challenging,” noting the company was in the middle of its turnaround program while dealing with the COVID-19 pandemic and a change to its organizational structure and its operating model.

“Despite these significant disruptions, we managed to navigate the business to a very strong performance, leading to market share gains in many markets,” said Lacik in a press release about the results.

“We continue to invest strongly in building the brand desirability, digital capabilities and operational excellence, all of which will be key foundations as we gradually move from transformation to growth mode.”

By product category, sales of charms were down 4 percent in the quarter and down 15 percent for the full year.

Bracelet sales were up 4 percent in Q4 but down 11 percent for the full year.

In the ring category, quarterly sales slipped 1 percent while annual sales fell 11 percent, while earring sales were up 3 percent in the quarter and down 11 percent for the full year.

Sales of necklaces and pendants were up 5 percent in the quarter, but down 8 percent for the full year.

By sales channel, Pandora-owned retail stores, including the online store, brought in 5.53 billion Danish kroner ($640 million) in the fourth quarter, up 6 from the previous year.

For the full year, retail sales were down 5 percent year-over-year to 13.43 billion Danish kroner ($1.56 billion).

Wholesale sales in the fourth quarter fell 14 percent to 2.14 billion Danish kroner ($248.2 million). For the full year, wholesale sales sank 26 percent to 4.95 billion Danish kroner ($573.2 million)

During the fourth quarter, more

than 10 percent of Pandora’s physical stores were closed due to COVID-19 restrictions.

The traffic into Pandora-owned physical stores plummeted 60 percent year-over-year in the fourth quarter, though Pandora noted the conversation rate was higher.

The company operated 2,690 stores as of the fourth quarter, 80 fewer when compared with the previous fourth quarter.

Online sales nearly doubled in the quarter, up 94 percent to 2.53 billion Danish kroner ($293.4 million), and accounted for 32 percent of total revenue.

For the full year, online sales were up 97 percent to 5.48 billion Danish kroner ($635.1 million), accounting for 29 percent of revenue.

In the United States, Pandora’s largest market accounting for 25 percent of total revenue, sales were strong in the fourth quarter with online shopping and curbside pickup alleviating the sting of COVID-19-related restrictions.

The Star Wars collection, released in October 2020, was especially well-received.

Quarterly revenue in the U.S. totaled 1.98 million Danish kroner ($229.6 million), up 11 percent year-over-year.

For the full year, U.S. revenue fell 4 percent to 4.51 billion Danish kroner ($521.9 million).

Looking ahead, Pandora said it expects to return to top-line growth, but remains wary of the effects of the COVID-19 pandemic.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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