(News Bulletin 247) – The Danish jeweler is raising its annual growth forecast after delivering results that exceeded expectations in the second quarter.

At the end of 2023, Pandora explained that it sold three pieces of jewelry every second. The jeweler built its success on its customizable jewelry with “charms”, these small pendants of several dozen euros which then adorn necklaces or bracelets.

The craze for Pandora’s customizable products is such that the jeweler is posting growth of more than 57% over one year on the Copenhagen Stock Exchange, including a little over 13% over the year 2024.

Brilliant results

And the latest results published by the jeweler are evidence of the robustness of Pandora’s model, based on the personalization of products. The Danish group reported quarterly revenue up 8% on a comparable basis to reach 6.77 billion Danish crowns (907 million euros), which is higher than the average consensus compiled by the company at 6.661 billion crowns (892 million euros).

The group said it had benefited from “solid” growth of 10% in its business on its European markets, while sales in the United States remained “robust”, with a 5% increase. Pandora’s business is therefore still growing, despite weak consumption, as evidenced by recent profit warnings from Burberry and Ryanair.

Second-quarter gross margin, meanwhile, hit a “new all-time high” at 80.2%, marking an increase of 210 basis points year-on-year (or 2.10 percentage points). Pandora said it had improved its gross margin through price increases and “efficiency gains” in its costs.

Operating profit rose 12.6 percent year-on-year to DKK 1.34 billion (EUR 179.60 million), beating expectations of DKK 1.3 billion on average.

The operating margin remained almost stable at 19.8% in the second quarter, Pandora attributes this slight erosion to non-recurring costs. Here too, Pandora exceeded expectations since analysts on average expected an operating margin of 19.5%.

“Our strategy continues to drive Pandora to new heights, despite some weakness in consumer spending. We have successfully begun the journey to establish Pandora as a standalone jewelry brand, and our results show that consumers like what they see,” said Alexander Lacik, Pandora chairman and chief executive officer.

The Danish jeweler also says it is approaching “the second half of the year with optimism”, which allows it to raise its growth forecasts for the whole of 2024 once again. Pandora now expects to achieve organic growth of between 9 and 12%, compared to a previous range of 8 to 10%. The operating margin target (EBIT) remains unchanged at “around 25%”.

Regarding the current quarter, the current trend remains “healthy” Pandora said, with underlying revenue growth in the single digits. On the Copenhagen Stock Exchange, Pandora rose 1.9% to 1,060 Danish crowns.

Rise with Phoenix 2026

The company believes it has room to maneuver to best implement its “Phoenix 2026” strategic plan announced in October 2023.

Pandora expects to grow its revenues by 7% to 9% per year on a comparable basis over the period 2023-2026, thanks in particular to the expansion of its distribution network (which will contribute three percentage points), and to generate an operating margin of between 26% and 27% in 2026.

The group also expects to generate 16 to 17 billion Danish crowns in cash from 2024 to 2026, or between 2.1 and 2.3 billion euros. And 14 to 17 billion crowns will be returned to shareholders in the form of dividends or share buybacks.

As of August 9, Pandora said it had already repurchased DKK 2 billion (€260 million) worth of shares as part of its DKK 4 billion (€520 million) share buyback program announced on February 7.