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

Bergman Jewelers family
IndependentsApr 01, 2025
Bergman Jewelers in Omaha Closing After 137 Years

The independent jeweler first opened its doors in 1888.

QVC Group Inc. logo
MajorsApr 01, 2025
QVC Group to Cut 900 Jobs in the U.S.

The layoffs come amid the TV shopping channel’s efforts to restructure and focus on live shopping through social media.

Coconut Grove Jewelry & Watch Show
Events & AwardsApr 01, 2025
U.S. Antique Shows Adds Fall Show in Florida

The debut event will take place in Miami’s Coconut Grove neighborhood this fall.

bench jeweler 1872x1052.png
Brought to you by
The Heart of the Industry: Giving Bench Jewelers the Recognition They Deserve

Bench jewelers spend years honing their skills, Jewelers of America’s Certification validates their talents.

The Jewelry Symposium (TJS)
Events & AwardsApr 01, 2025
TJS to Host Discussion on Jewelry Industry’s Labor Shortage

The roundtable will take place May 17 ahead of the trade show’s welcome dinner.

Weekly QuizMar 27, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Peanuts x Monica Rich Kosann Collection Bracelets
CollectionsApr 01, 2025
Monica Rich Kosann Says ‘Good Grief’ in Peanuts Jewelry Collection

The “Peanuts x Monica Rich Kosann” collection features the comic strip’s classic vocabulary across 10 bracelet designs.

Graphic for What Do We Mean When We Say “Recycled” Gold webinar
Recorded WebinarsMar 31, 2025
Watch: What Do We Mean When We Say ‘Recycled’ Gold?

Three industry experts dive into the complexities of the material often marketed as an “ethical” alternative for metal in jewelry.

Facets-of-Fire-Difference-You-Can-See.jpg
Brought to you by
Natural Diamonds Should Mean More

Natural diamonds mean more than lab-grown, but when every cut is ideal, they all look the same. Customers want more—Facets of Fire delivers.

Mindi Mond Clarity Earrings
TrendsMar 31, 2025
Amanda’s Style File: Dripping in Diamonds

Diamonds are not only one of the most prominent gemstones, but the birthstone for those born in April.

Lashbrook ring
MajorsMar 31, 2025
Lashbrook Expands Into Luxury Golf Gifts With Acquisition

The Utah-based company known for making wedding bands has acquired Doubloon Golf.

Bulgari and LVMH Watches CEO Jean-Christophe Babin
WatchesMar 31, 2025
Bulgari CEO Jean-Christophe Babin Will Also Head LVMH Watches

The longtime luxury executive led one of LVMH’s watch brands, TAG Heuer, for 12 years before taking over Bulgari in 2013.

Surveillance footage of robbery
CrimeMar 28, 2025
2 Suspects Arrested in $1.7M Smash-and-Grab Robbery of NY Jewelry Store

Authorities said the robbers fled with jewelry and 70 Rolex watches, later taking pictures of themselves posing with big stacks of cash.

Nephrite and Jadeite by Heinrich Fischer, Richard W. Hughes
SourcingMar 28, 2025
19th-Century Jade Book Now Available in English

Lotus Gemology founder Richard W. Hughes has translated Heinrich Fischer’s 1880 book “Nephrit und Jadeit” from its original German.

LÖF The Valentine Ring
CollectionsMar 28, 2025
Piece of the Week: Löf’s ‘The Valentine’ Ring

The ring's design features contrasting lines influenced by work from architecture-inspired photographer Nikola Olic.

Eggs on a shelf
SurveysMar 27, 2025
Consumer Confidence Falls in March Amid ‘Gloomy’ Outlook

The Conference Board’s index fell as consumers continued to worry about the impact of tariffs, the labor market, and the price of eggs.

Richard Rainsford memorial ring
AuctionsMar 27, 2025
300-Year-Old Ring Linked to Witch Trial Judge Goes Unsold at Auction

However, two medieval jewels surpassed estimates at Noonans Mayfair’s recent jewelry auction in London.

Austin Butler
WatchesMar 27, 2025
Austin Butler Joins Breitling as Brand Ambassador

The Oscar-nominated actor debuted in the campaign for the new “Top Time B31” collection, which introduced Breitling’s Caliber B31.

ICA Congress Brazil 2025
SourcingMar 27, 2025
Susan Jacques, Gaetano Cavalieri to Headline 2025 ICA Congress

The Congress is scheduled to take place May 19-22 in Brasilia, Brazil.

Bailey’s Fine Jewelry storefront
IndependentsMar 26, 2025
Bailey’s Fine Jewelry Acquires Fellow NC Independent Jeweler

The family-owned retailer is the new owner of Morrison Smith Jewelers in Charlotte, North Carolina.

Bulova 150 Art Deco Miss America Watch, 150 Art Deco Pocket Watch
WatchesMar 26, 2025
Bulova Celebrates 150th Anniversary With Art Deco Watches

The “150 Art Deco” collection features a Miss America timepiece and a pocket watch from the brand’s Archive Series.

Alex Wellen
MajorsMar 26, 2025
QVC Group Appoints New President

Alex Wellen, formerly CEO and president of MotorTrend Group, has taken on the role.

Jewelers of America’s new logo
Events & AwardsMar 26, 2025
Jewelers of America Announces New Funding Initiative

The Impact Initiative is part of the nonprofit association’s new three-year strategic plan.

Christies regent kashmir sapphire and regal Burmese ruby
AuctionsMar 25, 2025
Christie’s To Auction 35-Carat Sapphire, 13-Carat Ruby

The ruby and the sapphire, which Christie’s calls a “once-in-a-generation masterpiece,” are part of the upcoming Hong Kong jewelry auction.

Diamond earrings held in gloved hand
CrimeMar 25, 2025
Tiffany & Co. Earrings Swallowed Following Grab-and-Run Theft Recovered

The two pairs of earrings, snatched from a Tiffany & Co. store in Orlando, Florida, are valued at a combined $769,500.

Emmanuel Raheb CEO of Smart Age Solutions
ColumnistsMar 25, 2025
The Smart Lab: Using Short-Form Videos to Sell More Jewelry

The time to start experimenting with video content is now, writes columnist Emmanuel Raheb.

Pomellato Nudo High Jewelry Campaign
CollectionsMar 24, 2025
Pomellato’s Latest ‘Nudo’ Collections Revamp its Classic Design

From striking high jewelry to miniature fine jewelry, the new chapter continues to highlight gemstones featuring its signature 57-facet cut.

Jamie Singleton, Bill Brace, Rebecca Wooters, Bill Luth
MajorsMar 24, 2025
4 Top Executives to Depart Signet Jewelers Amid Turnaround

The jewelry giant is reducing its senior leadership by 30 percent as part of its new turnaround strategy.

×

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