Pandora shares leap as it expects 2019 sales to meet forecast
Pandora saw its shares jump 11.4% on Monday after telling investors that sales and profits for the 2019 financial year will be in line with expectations.
The Danish jeweller said in a statement that like-for-like sales dropped by just 4% in the fourth quarter, showing the first signs of improvement after declining sharply in the first half of the year, when they fell 10%.
This means that the newly relaunched brand will end the year with an 8% decline in like-for-like sales, meeting its forecast.
Organic decline for the full year will be slightly higher than expected at 8%, after a 4% fall in the fourth quarter. Finally, the full-year EBIT margin excluding restructuring costs is expected to be in the upper end of the guided range of 26-27%.
Pandora said the improvement in like-for-like sales confirms “the strategic direction and the effectiveness of Programme NOW”, a strategic plan aimed at reinvigorating the brand and driving sustainable growth.
As part of this, the jeweller has recently presented a brand new identity, philosophy and direction, shifting its focus towards younger consumers and a refreshed aesthetic. This included an important relaunch party in Los Angeles in August, plus pop-up activations in London to introduce the new proposition and a collaboration with actress Millie Bobby Brown.
The initiatives are designed to help the brand regain market share after struggling to compete with internet rivals. Founded in 1982, Pandora became wildly popular in 2010 for its broad selection of charms, but its shine quickly wore off and the firm found itself with declining sales and a go-to-market strategy that was too slow to cope with new trends.
The brand said like-for-like growth will remain in negative territory in 2020, and that 2020 EBIT margin, excluding restructuring costs, will be lower than in 2019.
The full results for 2019 will be released on 4 February.
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