Pandora Raises 2016 Forecasts After Profit Beats Estimates

  • Sales should exceed $3.1 billion this year, jeweler forecasts
  • Danish maker of charm bracelets raises margin target to 38%

Danish jeweler Pandora A/S raised its full-year forecasts and reported first-quarter profit that beat analysts’ estimates as the popularity of its charm bracelets spread across Asia.

Sales should exceed 20 billion kroner ($3.1 billion) this year, up from a previous forecast of 19 billion kroner, the company said in a statement Tuesday. Earnings before interest, tax, depreciation and amortization will be more than 38 percent of revenue, Pandora said. The previous forecast was 37 percent. The stock rose as much as 8.3 percent, the steepest intraday gain in a year.

“Pandora benefits from accessible prices in jewelry,” Piral Dadhania, an analyst at RBC Capital Markets, said in a note to investors. The lower cost of raw materials also may have boosted profitability, he said.

Pandora’s silver bracelets have become a signature gift for women, with the company being able to stoke demand through the regular addition of charms such as Disney characters and Major League Baseball teams. While sales have almost tripled in the past four years, the company’s market value has increased by a factor of 14 to the equivalent of about $16 billion.

Still, revenue growth was 34 percent in the first quarter, decelerating from the 40 percent pace Pandora had in 2015. The jewelry industry is slowing as weaker economic growth and slumping stock markets weigh on consumer confidence. Tiffany & Co., the U.S. luxury jewelry retailer, has forecast earnings this year that trailed analysts’ estimates as the sluggish global economy hurts sales.

Pandora’s first-quarter Ebitda was 1.76 billion kroner, boosted by Asian sales that rose 58 percent. The average of analyst estimates compiled by Bloomberg was 1.64 billion kroner.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE