Danish jewellery giant Pandora announced a positive organic growth in early 2020 and triple-digit online growth in April.
Pandora drove positive organic growth in January and February and triple-digit online growth in April. 2020 quarter one organic growth was -14% and EBIT-margin of 15.3%, negatively impacted by COVID-19.
Immediate cost and cash initiatives have been initiated to protect the financial position. Execution of Programme NOW continues with focus on leveraging the brand momentum when demand returns.
To protect the business during the pandemic and preserve a conservative balance sheet during these uncertain times, Pandora has arranged funding for a stress-test scenario.
Pandora thereby has liquidity to sustain a stress-test scenario where all physical stores are temporarily closed throughout 2020.
Additional committed loan facilities of DKK 3.0 billion with the main relationship banks have been established. Additionally, Pandora intends to sell 8 million treasury shares in an accelerated book-building.
The COVID-19 pandemic has had a material negative impact on the financial performance in the quarter; initially in China and subsequently in all other key markets during March. In the last week of March, sell-out growth (including temporarily closed stores) was around -70%. It has since then improved to approximately -55% by the end of April based on strong online performance and a gradual re-opening of physical stores, so far mainly in Germany.
The financial performance was strong in the first two months of 2020. Organic growth was +1% driven by key markets including the US, the UK, Italy, France and Germany. The development indicated an effective turnaround before the COVID-19 escalation. The brand momentum that was built during 2019 continued to improve in early 2020 driven by media investments and stronger and more consistent marketing message.
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Alexander Lacik, President and CEO of Pandora, said: “The group is now preparing for the recovery after the pandemic, and our strong performance in January and February makes us confident in the underlying brand momentum. We have implemented cost and cash initiatives to ensure that we have the necessary financial strength for a strong commercial comeback when demand starts normalising.”