BERLIN – Danish jewelry brand Pandora raised guidance for the second time this year. The announcement came on the back of organic growth of 5 percent during the second quarter and sales worth 5.89 billion Danish kroner, or $864 million, over the three months ending June 30.
This brings the company’s revenues for the first half of this year to 11.75 billion Danish kroner, or $1.72 billion.
“We are pleased with delivering yet another solid quarter against a backdrop of macroeconomic uncertainty,” Pandora chief executive officer Alexander Lacik said in a statement. “Given our solid performance so far, our updated guidance now sees another year of positive organic growth.”
At the beginning of this year, Pandora had predicted growth of somewhere between minus 3 percent to plus 3 percent. The Danish jewelry maker had already revised those figures slightly upwards after a solid first quarter. Now, after Q2 brought the brand a fifth consecutive quarter of steady growth, Pandora again revised upwards, anticipating positive growth of between 2 percent and 5 percent for the full year.
Revenues were 3 percent above consensus. “Q2 results show the company navigating a challenged US market surprisingly well, with an incrementally stronger Europe proving a boost,” said Jefferies analyst Frederic Wild in a note following the release.
In terms of sales territories, the all-important U.S. market has been difficult for Pandora due to consumer hesitancy. However revenues improved sequentially in the U.S. this quarter, coming in at minus 4 percent and bringing in 1.834 billion Danish kroner, or $268 million. In Q1, U.S. revenues had stood at minus 7 percent. This represented an improvement, Pandora said in a statement, that indicated “the effectiveness of strategic initiatives” there. Mother’s Day and end of season sales had played a part as had product launches like the popular Little Mermaid series, the brand noted.
Pandora’s revenues remained steady in principal European markets, sitting on zero percent. German customers were the most enthusiastic with growth in that territory at 11 percent in Q2 compared to the same period last year. This was balanced out by revenue decreases of 5 percent in both Italy and France, and zero percent growth in the United Kingdom. In total, the four European markets brought in 1.77 billion Danish kroner, or $259 million.
Last year, the Chinese market made up 5 percent of the company’s total business and Pandora was relaunching the brand there after last year’s COVID-19 lockdowns negatively impacted retailing. “Since the relaunch was initiated mid-July, we have seen some pick-up in traffic in both stores in Shanghai and Beijing as well as online,” the company explained in its statement. Like-for-like comparisons were difficult because the Chinese market had been in lockdown during Q2 last year but Pandora recorded 5 percent growth there this quarter, totaling 156 million Danish kroner, or $23 million.
Additional territories delivered strong growth of 12 percent for Pandora, with the brand seeing double-digit gains in Portugal, Peru, Poland, Austria and Turkey. Revenues in this category equaled 1.92 billion Danish kroner in revenues, or $282 million, over the second quarter.
On Tuesday, the company also announced the rollout of its lab-grown diamond category, now named “Pandora Lab-grown Diamonds,” to all stores in North America, as well as Australia, Mexico and Brazil. This will bring the number of doors carrying the lab-grown diamond category to 700.
Although markets had softened, Lacik was adamant that the company was “not rolling out in more stores in America to catch next quarter’s numbers – this is a long-term play,” he told WWD.
Likewise, the addition of three new collections was about “putting a wide selection and very attractive value proposition to the audience that we already have in Pandora today,” he continued.
The initial launch of the lab-grown diamonds had included just 36 designs. The new roll-out will bring 57 new design variations.
The current designs, now designated Pandora Infinity, will be joined by the Pandora Nova line, focusing on brilliant- and princess-cut diamonds with the introduction of a proprietary four-prong setting; Pandora Era on classic styles; and Pandora Talisman on five pendant designs nodding to the brand’s famous charms.
They will be unveiled in a new campaign featuring “a cast of cultural icons,” and commercially available from Aug. 29. Pandora recently announced “Emily in Paris” star Ashley Park as its latest global ambassador.
The Danish jeweler’s next capitals market day will be held in London on Oct. 5.