Pandora Slides on Concern Biggest Investor May Sell More Stock

Pandora A/S, the Danish maker of charm bracelets, fell the most in almost six months on concern that the company’s biggest shareholder may seek to further reduce its stake after today’s third-quarter earnings.

The shares slid as much as 8.9 percent to 235 kroner, the steepest decline since May 22 when private-equity fund Axcel last cut its stake in the company. They traded down 3.2 percent at 10:44 a.m., still doubling since the start of the year.

Copenhagen-based Axcel has a window of four weeks after each quarterly results statement in which it is able to sell shares, according to Pandora spokesman Jakob Risom Langelund. The investor owns about 26 percent after a 40.4 percent stake held by Prometheus Invest ApS was redistributed to Axcel and Pandora’s founding Enevoldsen family.

“Everybody expects that there will be a placing,” analyst Jesper Christensen at Alm. Brand A/S said on the phone. There is nothing in the results to indicate that the shares should trade lower today, Christensen said.

A spokesman for Axcel didn’t immediately return a call and an e-mail seeking comment.

Net income for the three months ended Sept. 30 rose to 612 million kroner ($110 million) from 380 million kroner a year earlier, Glostrup, Denmark-based Pandora said in a statement today. The average analyst estimate compiled by Bloomberg was for profit of 576 million kroner.

The company reiterated the forecasts it raised on Oct. 31. Pandora predicts 2013 revenue of approximately 8.6 billion kroner and a margin on earnings before interest, taxes, depreciation and amortization of about 30 percent.

Product Introductions

“The overall growth continues to be driven by an increasing demand for Pandora’s products launched in the last 12 months,” Chief Executive Officer Allan Leighton said in the statement, adding that store openings helped growth.

Pandora is introducing new products more regularly to boost earnings. It now releases seven collections a year rather than two. For Christmas, its offering includes a candy-cane charm priced at 30 pounds ($48) in the U.K.

The jeweler repeated today that it expects to open about 195 Pandora-branded stores this year.

Third-quarter revenue was 2.3 billion kroner, up 26 percent from a year earlier. Revenue growth was strongest in Europe at 47 percent. Sales in the Asia-Pacific region increased by 38 percent and in the Americas by 7.6 percent.

The average selling price of 133 kroner was unchanged in the quarter compared with a year earlier. The gross margin widened to 66.2 percent from 64.1 percent.

Pandora, which suffered a collapse in demand two years ago that led it to replace unwanted products with retailers, said the third quarter was the last with weak comparisons created by that inventory balancing program.

“This obviously means that we are now entering a phase with more modest headline growth, but still underpinned by strong operating performance,” Leighton said.

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