Pandora Raises Guidance, Increases Investments Ahead of Capital Markets Day

LONDON – Amid robust demand, Danish jeweler Pandora has updated profit and revenue projections for the medium term ahead of its capital markets day in London Thursday.

The jeweler said organic growth will range from 7 to 9 percent on a compound annual growth basis from 2023-26, comprising 4 to 6 percent like-for-like growth, and network expansion of around 3 percent.

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The company updated its EBIT margin, or earnings before interest and taxes, expectations, too. By 2026 it will range from 26 to 27 percent. Pandora had originally been expecting an EBIT margin of around 25 percent in 2023.

Revenue is expected to reach 34 billion to 36 billion Danish kroner, or $4.8 billion to $5.1 billion, in 2026 compared with an expected 27 billion kroner, or $3.8 billion for 2023.

EBIT is expected to reach 8.8 billion to 9.7 billion kroner, or $1.2 billion to $1.4 billion by 2026.

Pandora, which is publicly listed on the Nasdaq Copenhagen stock exchange, said its “asset-light” business model is expected to lead to 16 billion to 17 billion kroner, or $2.3 billion to $2.4 billion, free cash flow generation from 2024-2026.

Pandora said it aims to return 14 billion to 17 billion kroner, or $2 billion to $2.4 billion, in cash to shareholders during 2024-26.

Alexander Lacik, president and chief executive officer of Pandora, said the company was proud of what it has achieved over the past two years.

“We have fundamentally changed how we work, and the organization is much stronger. It’s clear that Pandora is a very different company today. This solid foundation combined with a proven strategy that will build Pandora into a full jewelry brand allows us to lift our growth target. Our new financial targets reflect our confidence in the future,” he said.

Lacik added that Pandora is also ramping up its Phoenix investment strategy, which launched in 2021. Looking ahead, the company said it plans to “scale up” investments to accelerate revenue growth.

It also wants to build its position as a “full jewelry brand” in the affordable luxury space, and will increase investments in “brand desirability” and the store network.

The company is also stretching its sustainability targets, and will continue to dedicate “significant resources” to lead the industry. Pandora said it is on track to shift to 100 percent recycled silver and gold by 2025, and is committed to innovating with lab-grown diamonds.

Jefferies said in a report Thursday that the credibility of Pandora’s “stretching targets will be critical today at the capital markets event in London. Our early read suggests simultaneous elevation of the brand and broadening of assortment are the critical components of the new like-for-like guidance, a testing combination.”

RBC Capital Markets, which currently has an underperform rating on Pandora, wrote Thursday that the brand’s core customer demographic “is more sensitive to the macroeconomic environment, for which the outlook is fairly uncertain.”

It added that “looking through the cyclical headwinds facing the business, we view the Phoenix strategy as sensible, as it focuses on the core customer, brand building and sustainable growth opportunities.”

Pandora is also making moves in the fashion space.

The company said earlier this week that is has become the principal partner of The Fashion Awards, which will take place at Royal Albert Hall on Dec. 4.

Mary Carmen Gasco-Buisson, chief marketing officer at Pandora, said the company was supporting the Fashion Awards as part of its mission to engage with the global cultural zeitgeist.

“The British Fashion Council is at the forefront of the global fashion conversation, and with our purpose of ‘giving a voice to people’s loves,’ we naturally align with their mission to recognize and celebrate the most creative and innovative voices of our time,” Gasco-Buisson said.

“Along with self-expression through personalization, style and talent, we further unite around our core values, including a focus on accelerating sustainability and education,” she added.

In late August, Pandora said it was expanding its lab-grown diamond category with three new collections and a star-studded campaign in the U.S., the U.K. and Australia. 

The Danish jeweler called on model and actress Pamela Anderson; American Sign Language interpreter and performer Justina Miles; former model and Vogue creative director at large Grace Coddington; actress Amita Suman; model Sherry Shi, and musical artist and dancer Vinson Fraley to be the faces of the campaign.

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