Police to Investigate Pandora's Forecast Announcement

(IDEX Online News) – Pandora was late in announcing that it would not meet its 30 percent revenue growth forecast, according to the Danish Financial Supervisory Authority. Pandora made the announcement on August 2, 2011.

Following a 40 percent growth strong performance in the first quarter of 2011, Pandora said in April 2011 it expects full year results to grow 30 percent. On August 2, after a sharp drop in revenue in the second quarter, it has lowered its guidance to in line with 2010 as well as announced the resignation of CEO Mikkel Vendelin Olesen.

The FSA has handed the matter to the police for further investigation, according to Danish regulation.

The FSA notice comes less than a month after the reprimand Pandora received from NASDAQ OMX on the same matter.

Pandora maintains, "It acted properly during a swift and unexpected downturn in sales by making a timely and precise announcement adjusting its annual forecast in light of new information and based on an analysis of the changing market dynamics in July 2011," the company stated.

The jewelry company said that at the beginning of July 2011, year-to-date revenue was up 22 percent against the same period in 2010 and that it had good reason to believe that the forecast of 30 percent revenue growth for the full year was "reasonable." 

However, the company claims that during the month trading conditions "significantly worsened," with revenues in July 2011 eventually falling more than 30 percent against July 2010.