Financials

Pandora’s Q4 Results Suffer as Weak Sales in China Take A Toll

FinancialsFeb 04, 2020

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.

20200204_Pandora_bracelet.jpg
Sales of Pandora’s charms were down 6 percent year-over-year in 2019.

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

revenue totaled 7.96 billion Danish kroner ($1.18 billion), up 1 percent compared with 7.89 billion kroner ($1.17 billion) in the fourth quarter last year.

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

The Latest

 Laura Gallon Joaillerie “Dynasty” ring, Bijules “Compass” bolo tie, Löf “The Orbitalis” ring
Events & AwardsJun 05, 2025
The 12 Fresh Faces in Couture’s Design Atelier

Discover the dozen up-and-coming brands exhibiting in the Design Atelier for the first time.

Jack Abraham The Royal Ruby Collection
SourcingJun 05, 2025
A Rare Suite of Rubies Has Arrived in Las Vegas

The “Royal Ruby” Collection is a quintet of untreated rubies curated by collector Jack Abraham.

Daymond John
Events & AwardsJun 05, 2025
Daymond John to Give Keynote at JCK Las Vegas

The entrepreneur and “Shark Tank” star will share his top tips for success.

DCA-student-cert-NJ1872x1052-2.png
Brought to you by
The True Power Behind the Counter: Why Sales Associates Are the Heart of the Jewelry Business

When investing in your jewelry business, it's important not to overlook the most crucial element of success: the sales associates.

Vaishali Banerjee and Pallavi Sharma
MajorsJun 05, 2025
Platinum Guild International Updates Leadership Team

Two existing executives have been given new roles.

Weekly QuizJun 05, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Meredith Tiderington
Events & AwardsJun 05, 2025
Zillion Announces 'Women in STEM' Scholarship Recipient

Meredith Tiderington, an electrical engineering student, was selected for the award.

The Gemological Institute of America’s logo
Lab-GrownJun 04, 2025
GIA Reverting to More General Terminology for Lab-Grown Diamonds

It will quit assigning the stones specific color and clarity grades in favor of applying “new descriptive terminology.”

Article Image 1.png
Brought to you by
Clienteling Isn’t a Buzzword. It’s an Essential Business Model.

More shoppers are walking out without buying. Here’s how smart jewelers can bring them back—and the tool they need to do it right.

Exterior of the Venetian and the Las Vegas Sphere
Events & AwardsJun 04, 2025
As JCK Talks Returns, Don’t Miss These 12 Sessions

From design trends to sustainability, here’s a roundup of can’t-miss education sessions at JCK Las Vegas.

JCK show
CrimeJun 04, 2025
10 Safety Tips for the Las Vegas Shows

The Jewelers’ Security Alliance offers advice for those attending the annual trade shows.

Amy Curran
MajorsJun 04, 2025
Amy Curran Promoted at Hill & Co.

Her new role is director of strategic initiatives.

The eight rings in Viviana Langhoff’s AU79 jewelry collection
CollectionsJun 03, 2025
In Her Latest Collection, Viviana Langhoff Is Leaning Into Gold

The designer is embracing bold pieces with weight to them in “AU79,” a collection she celebrated with a creative launch party.

Woman’s hand holding shopping bags
SurveysJun 03, 2025
Consumer Confidence Improves in May

The index partially rebounded after months of decline, due in part to the U.S.-China deal to temporarily reduce import tariffs.

Dakota Johnson as Roberto Coin Brand Ambassador
CollectionsJun 03, 2025
Dakota Johnson Is Roberto Coin’s New Brand Ambassador

The actress stars in the latest campaign set in Venice, Italy, and is set to participate in other creative initiatives for the jeweler.

Mason Kay Jade necklace
GradingJun 03, 2025
Mason-Kay Jade Adds ‘Fei Cui’ to Jade Reports

The company has joined other labs, including GIA and Lotus Gemology, in adopting the Chinese term for "jadeite jade."

Gemfields ruby
SourcingJun 02, 2025
Gemfields’ June Auction to Include 36-Carat Ruby

The large stone will be offered at its June sale along with a selection of secondary-type rubies from a new area of the Montepuez mine.

Adobe Stock image of skyline of Bangkok, Thailand
GradingJun 02, 2025
GSI Opens New Lab in Thailand

Located in Bangkok, the laboratory is Gemological Science International’s 14th location worldwide.

Seaman Schepps pearl earrings
TrendsJun 02, 2025
Amanda’s Style File: Three Gems for June

Those born in June have a myriad of options for their birthstone jewelry.

David Allouche
SourcingJun 02, 2025
David Allouche Joins Grandview Klein Diamonds

The diamond industry veteran has been named its senior sales executive.

Zoë Chicco Bracelets
Policies & IssuesMay 30, 2025
Tariffs & Designers: Navigating Pricing in an Unstable Environment

Between tariffs and the sky-high cost of gold, designers enter this year’s Las Vegas shows with a lot of questions and few answers.

Renato Cipullo Hematite Blaze Necklace
CollectionsMay 30, 2025
Piece of the Week: Renato Cipullo’s ‘Hematite Blaze’ Necklace

Designed by founder Renato and his daughter Serena Cipullo, it showcases a flame motif representing unity and the power of gathering.

Stock image of shipping containers
Policies & IssuesMay 30, 2025
Trade Court Declares Trump’s Tariffs Invalid

However, the tariffs remain in effect in the short term, as an appeals court has stayed the U.S. Court of International Trade’s decision.

Britney Spears
CollectionsMay 29, 2025
Britney Spears Files Trademark for New Jewelry Line

The pop icon is one step closer to launching her “B Tiny” jewelry collection, a collection she first began posting about last fall.

Inoveo Platinum Grain image.jpg
Supplier BulletinMay 29, 2025
Inoveo Platinum Grain, Exclusively Distributed by Stuller

Sponsored by Stuller

Grizzly Mining Pilala emerald
SourcingMay 29, 2025
Grizzly Auctions 6,620-Carat Emerald

It was featured in the miner’s latest sale, which brought in $24.8 million.

GemFind Logo
TechnologyMay 29, 2025
GemFind Launches AI Product Description Software

GemText AI uses artificial intelligence to generate tailored product titles, descriptions, and tags with jewelry-specific language.

Graff Fontainebleau Las Vegas
MajorsMay 28, 2025
Graff Unveils New Las Vegas Flagship

The 3,300-square foot location is the jeweler's largest store in North America.

×

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