Pandora says consumers returning faster than expected

Danish jewellery maker Pandora on Wednesday lifted its profit guidance for the second quarter as shops had reopened and consumers had returned to shops faster than expected.

The world’s biggest jewellery maker was forced to close almost all its 2,746 shops worldwide in the first quarter due to the coronavirus lockdown, but that 86% of stores had reopened by the end of June.

The company now expects second-quarter earnings before interest and taxes (EBIT) before restructuring costs to break even, compared with its previous guidance in May of negative EBIT for the period.

“The better than expected financial performance is a result of faster re-opening of markets, slightly quicker traffic recovery to re-opened stores and continued strong online performance,” the company said in a statement.

Some analysts warned in March the crisis could be a threat to the struggling company’s efforts to revive its fortunes.

But Pandora’s share price has more than doubled in value since mid-March, as investors have been encouraged by higher online sales and a strong return of customers to reopened stores.
The company said online sales had nearly tripled during the quarter.

Pandora kept its full-year guidance suspended, but said that assuming no further lockdowns in key markets, it projects a positive and double-digit EBIT margin excluding restructuring costs in the second half of the year.

The company said organic growth came in at minus 40% in the second quarter, although “traffic into the re-opened stores is slowly improving” and sales in June had been “materially better” than in April and May.

Pandora is due to publish full second-quarter results on August 18.