Pandora Reduces Full Year Expectations And Launches 'Programme Now’

(IDEX Online) – The third quarter of 2018 was unsatisfactory and group revenue decreased 3% in local currency due to timing of shipments, change of inventory levels in the wholesale channel and negative total like-for-like, the jewelry-maker reported.

Due to the unsatisfactory Q3 2018 performance, a lower than expected tailwind from forward integration as well as a weak start to the fourth quarter, full year revenue growth is now expected to be 2-4% in local currency (previously 4-7%).

Following a health check of the business, PANDORA has launched Programme NOW. As a first step, acquisitions of franchisees will be significantly reduced. PANDORA will also open fewer stores focusing on selected key markets with white space areas. Programme NOW will focus on pursuing cost opportunities, reducing working capital, reigniting sustainable like-for-like driven revenue growth and lifting PANDORA to the next level of maturity, operating as a much more unified global company, it said.

The Board of Directors is continuing its search for a new CEO and new non-executive board members.

In Q3 2018, group revenue decreased 3% in local currency, total like-for-like sales-out growth was -3%, and revenue from PANDORA owned retail increased 34% in local currency.

Commenting on the results, Anders Boyer, CFO of PANDORA, said: “The third quarter results were unsatisfactory and we have adjusted our full year guidance. We have reviewed our business and decided to launch a forceful program with the aim to materially reduce costs across the company to free up resources to invest in sustainable like-for-like growth. At the same time, we have to lift PANDORA to the next level of maturity operating as a more unified global company. We have taken the first major step in the program today by changing our network expansion plan. We have confidence in a strong future for PANDORA and will use 2018 and 2019 to re-set the business.”

The majority of future store openings will take place in a few selected markets with white space. These markets include among others China, India and Latin America.

Net store openings during 2018-2022 are expected to be lower than the current guidance of 1,000 stores in total (of which around 250 stores are still expected to be opened in 2018). The number of net store openings will also be impacted by more store closings going forward as the eSTORE grows.

PANDORA will guide on the expected number of store openings on a year by year basis going forward.