- 15% organic growth in Q2
- Full year guidance raised again
- US slowdown spooks investors
Danish jewellery giant Pandora (PNDORA:CPH) raised its full-year 2024 revenue guidance yet again after delivering a 15% rise in organic sales to DKK 6.77 billion for the second quarter.
The group’s ‘Phoenix’ growth strategy, which entails ‘elevating brand desirability’ and a step-up in marketing and investments in new store openings, is driving higher traffic into Pandora’s outlets and growth is on a tear in Germany.
However, the shares were flat at DKK 1,041 in early dealings after the charm bracelets-to-necklaces purveyor warned consumer spending was ‘somewhat sluggish’ and investors fixated on a sequential sales slowdown in the important US market.
HITTING NEW HEIGHTS
For the uninitiated, Copenhagen-headquartered Pandora is a vertically-integrated jewellery-maker and seller.
The company plays in the accessible luxury market, making high-quality bling available to the many.
Having previously hiked guidance in May, the company increased its full-year organic growth outlook guidance again, from between 8% to 10% to a 9% to 12% range, and maintained its operating margin guidance at around 25%.
‘Our strategy continues to take Pandora to new heights despite general consumer spending being somewhat sluggish,’ said chief executive Alexander Lacik.
‘We have successfully started the journey to make Pandora known as a full jewellery brand, and our results show consumers like what they see. Thanks to our strong performance, we are again raising revenue guidance for 2024 and look to the second half of the year with optimism.’
US OUTLOOK DIMS
While Pandora’s like-for-like growth in key European markets remained ‘solid’ at 10% in Q2, fueled by the performance in Germany where it enjoyed 65% like-for-like growth, the pace of growth in the US moderated from 9% in the first quarter to 5% in the second quarter.
Pandora was at pains to point out the overall jewellery market sequentially slowed in Q2, yet ‘the growth in Pandora US continues to be well ahead of the broader market which remains flattish to slightly down.’
The jeweller flagged a record gross margin of 80.2% for Q2, which reflected its vertically-integrated business model, price increases and cost efficiencies, while operating profit rose to DKK 1.34 billion from 1.19 billion a year earlier.
