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Pandora sees significant opportunities to grow in China

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Danish jewellery giant Pandora has reported “strong and broad-based growth” for Q4 and “12 percent sell-out growth” compared to the pre-pandemic 2019 final quarter.

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Pandora, the world’s largest jewellery maker by production capacity, said sales totalled DKK 9.0 billion (US$1.37 billion) in the fourth quarter, above the DKK 8.4 billion (US$ 1.28 billion) expected by analysts in a poll gathered by the company and up from DKK7.89 billion (US$ 1.21 billion) a year ago.

The company also saw a “solid” Q4 EBIT margin of 29.7 percent driven by operating leverage. Pandora’s online operations sustained their strong performance with 91 percent organic growth vs Q4 2019.

While the US remained strong with sell-out growth of 39 percent vs Q4 2019, Pandora reported that its performance in China was unsatisfactory and negatively impacted by Covid-19. Sell-out ‘growth’ actually went into reverse as it was down 39 percent against Q4 2019. But the company said it continues to see significant opportunities to grow in China.

Pandora expects the sustainable and profitable growth to continue. Pandora guide for an “organic growth of 3 to 6 percent” in 2022. The EBIT margin is expected to be “25.0 to 25.5 percent”. Pandora also reconfirms the 2021 to 2023 organic growth CAGR of 5 to 7 percent communicated at the Capital Markets Day, thereby raising the absolute revenue target for 2023 by DKK 1.9 to 2.2 billion (US$ 292 to 336 million) to DKK 27.0 to 28.1 billion ( US$ 4.12 to 4.29 billion).

Current trading remains solid and confirms that Pandora is back on the growth track. Organic growth was 23 percent in January 2022.

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“We end 2021 on a high note with record-breaking revenue and sell-out in Q4, and I am pleased that we are able to increase our 2023 revenue target by around DKK 2 billion. I am particularly pleased that our strong growth was broad-based across key markets. Our investments in digital are clearly paying off, Moments is showing solid growth, and we are encouraged by the new product platforms Pandora ME and Brilliance. With this – and with network expansion accelerating in 2022 – I am confident that we have all the ingredients to deliver sustainable and profitable revenue growth in the years to come,” said Alexander Lacik, President and CEO of Pandora.