Pandora Revenues Climb 21% in Q1
By all accounts, Pandora’s collaboration with Marvel was simply marvelous, helping to boost the Danish jeweler’s first-quarter revenues by 21 percent to 5.69 billion Danish kronor, or 764.7 million euros.
The buzzy tie-up, which debuted in February, generated some 40 million impressions on social media — and a waiting list of 17,000 and counting for The Avengers Infinity Stones ring, priced at $100.
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“The biggest question we get from our customers is, ‘When will Spiderman show up in our assortment?’” Pandora president and chief executive officer Alexander Lacik said during a webcast to discuss the results, released Wednesday morning, adding an ancient adage popularized by that Marvel franchise: “With great power comes great responsibility.”
All told, the Marvel products — including charm bracelets with dangling charms of Thor’s hammer and Captain America’s shield — represented 3 percent of first-quarter sales and 6 percent since launch, Lacik said, also noting that the Marvel range outperformed previous collaborations with “Star Wars” and “Harry Potter.”
While flagging a host of headwinds for the balance of the year, the company nevertheless lifted guidance for organic revenue growth, now expected to be 4 to 6 percent, versus 3 to 6 percent, for the full-year 2022.
Pandora maintained its EBIT margin guidance at 25 percent to 25.5 percent while cautioning that “financial guidance for 2022 is subject to elevated uncertainty.”
The Danish jewelry giant said consumer demand “generally remained healthy during April” despite inflation and rising interest rates.
It also flagged negative impacts from the war in Ukraine, cost inflation and COVID-19, particularly in China, and Thailand, where manufacturing is centered.
Pandora also will face a tougher comparison base in the second quarter, due to fewer pandemic lockdowns and stimulus packages in the U.S. in the year-ago quarter.
Still, the upgrade in sales guidance reflects strong momentum in markets like Latin America. Revenues in its “rest of the world” basket gained 27 percent in the quarter, Anders Boyer, Pandora’s executive vice president and chief financial officer, told analysts during the webcast.
Pandora cited double-digit organic growth across Europe, with the U.K. bounding 32 percent and Germany 43 percent.
Revenues gained 7 percent in the U.S., representing a 62 percent improvement over the first quarter in 2019. The company acquired 32 franchise stores, most on the West Coast, and entered into a new partnership with Macy’s in the period.
Sales in the online channel slipped 17 percent in the quarter, reflecting widespread pandemic lockdowns in the first three months of 2021 that fanned e-commerce. The gain stood at 155 percent compared to 2019.
In a research note, Freetrade analyst Gemma Boothroyd wrote that Pandora’s lack of progress on the digital front is cause for concern. “Pandora’s ability to capture greater online spend is a huge hurdle in gaining more of the Chinese market,” Boothroyd said.
Sales in China dipped 18 percent versus 2021 and 57 percent versus 2019, signaling an uphill climb in that market.
Lacik told investors that a relaunch plan and marketing push in China would be postponed “until market conditions stabilize,” likely in 2023. He also cited a management change, with Irving Holmes Wong taking the reins after working for such brands as Revlon, L’Oréal and Bacardi-Martini.
Pandora noted that all its business with Russia and Belarus has been suspended and that “these markets account for approximately 1 percent of revenue.”
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