Jeweler Pandora Lifts Forecasts Again After Strong ChristmasKatarina Gustafsson
Pandora A/S, a Danish maker of charm bracelets, raised its sales and profitability forecasts for the second time in less than three months after its jewelry proved to be a hit with Christmas shoppers.
Revenue last year was about 9 billion Danish kroner ($1.6 billion), the Glostrup-based company said today. Pandora raised the forecast in October to 8.6 billion kroner from 8 billion kroner. Profit margins also beat guidance, it said, sending the shares to the highest in almost three years.
The jewelry maker, which suffered a collapse in demand in the summer of 2011, has turned a page after introducing new products more frequently. It now issues new collections seven times a year, up from twice previously.
“Following a strong finish to the year, with better-than-expected Christmas sales, we will end 2013 with around 35 percent revenue growth and a substantial increase in profitability compared to 2012,” Chief Executive Officer Allan Leighton said in a statement today.
The shares rose as much as 5.3 percent to 325 kroner in Copenhagen, the highest since February 2011. They were up 3.5 percent at 319.50 kroner as of 11:14 a.m.
While investors anticipated Pandora would beat its targets, today’s news beat estimates, Soeren Loentoft Hansen an analyst at Sydbank A/S, said by phone. “It’s a better-than-expected upgrade of the guidance and strong development in the fourth quarter driven by strong Christmas sales” he said. “I expect good growth in 2014.”
The Danish company’s Christmas offerings included a winter mittens charm priced at $45 and a candy cane charm priced at $35. Its fourth-quarter performance was probably also helped by a new collection called Essence, according to the Sydbank analyst. The collection, which features charms printed with words such as “confidence” and “joy,” hit stores in November.
Pandora added 205 so-called concept stores in the year, 10 more than it anticipated, as demand for its charm bracelets swelled. Fourth-quarter revenue rose about 30 percent to 2.8 billion kroner, with all regions showing growth.
The margin on earnings before interest, taxes, depreciation, and amortization was about 32 percent last year, Pandora said. The forecast had been increased to about 30 percent from 27 percent on Oct. 31.