Pandora shares fall, jeweller announces lower than expected earnings growth

Pandora shares are trading lower Thursday as the Danish jeweller said it expects profit margins to fall in the coming years. The fashion-jewellery chain also announced below expected profits and revenues for 2017.

Pandora shares fall, jeweller announces lower than expected earnings growth

Pandora shares are trading lower Thursday as the Danish jeweller said it expects profit margins to fall in the coming years. The fashion-jewellery chain also announced below expected profits and revenues for 2017.

By 1145 BST, Pandora shares were 14.55% lower at DKK567.80. Pandora shares have been moving lower since mid-December.

Pandora’s performance

Pandora’s full year 2017 financial figures showed a slightly disappointing performance.

Revenues rose 12%, store sales were up 15% and earnings rose 37.3% in 2017 from a year earlier. The jeweller’s previous 2017 guidance was for earnings growth of 38%. However, while earnings were below expectations, Pandora did note healthy online sales through the Pandora eSTORE sites.

“2017 has been a challenging year for PANDORA,” said Anders Colding Friis, Pandora’s CEO. “The 2017 results are close to the targets we set ourselves at the beginning of the year, but we are of course disappointed to not fully reach the targets.”

“That being said, several external factors have worked against us during 2017, including a difficult US retail climate as well as an unfavourable currency development. We are now looking forward to present our plans for the future at our Capital Markets Day on 16 January,“ Friis added.

Pandora planning for future earnings growth

Pandora is targeting earnings growth of around 35% per year between 2018 and 2022. More details of that plans will be unveiled next week.

According to a report by Professional Jeweller, Pandora’s earnings growth strategy is said to include:

  • Growing its production of other jewellery products, such as rings, earrings and necklaces.
  • Expansion of its manufacturing capabilities.
  • Driving a digital expansion.
  • Moving from predominantly wholesale into consumer retail.

On that last point, it is certainly already working hard towards achieving that goal. During 2017, Pandora opened 3008 new stores. That exceeded expectations for 300 new store openings.

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