Jewelry maker Pandora sees sales decline in 2020

FILE PHOTO: A Pandora sign is seen at the company’s headquarters in Copenhagen, Denmark April 8, 2019. Picture taken April 8, 2019. REUTERS/Jacob Gronholt-Pedersen/File Photo

COPENHAGEN (Reuters) – Danish jewelry maker Pandora (PNDORA.CO), which is struggling to revive its brand amid sluggish sales, said on Tuesday it had seen an improvement in the fourth quarter but that it would not return to sales growth this year.

Shares in Pandora have risen around 20% since it said on Jan. 6 that it would meet its 2019 sales and profit margin forecast, which investors took as a sign that attempts to turn around the jeweler could be paying off.

“We have made significant changes in a very short time, and the results in Q4 give us confidence. Consumers are responding positively to our commercial initiatives,” said Chief Executive Alexander Lacik.

Pandora expects organic sales growth this year of -3 to -6%, an improvement from last year’s drop of 8%. It expects an operating profit margin, excluding restructuring costs, of 23%, compared with 26.8% in 2019.

But the forecasts do not account for any impact from the coronavirus in China, where it has closed 53 of its 237 shops.

“In recent weeks, the coronavirus has led to an unprecedented decline in consumer traffic in China and Hong Kong. Due to the unpredictable nature of the situation, the full-year impact cannot be reasonably estimated at this point in time,” Pandora said in a statement.

Fourth-quarter earnings before interest tax (EBIT) and excluding restructuring costs were 2.81 billion Danish crowns ($416.01 million), above the 2.75 billion crowns expected by 16 analysts in a poll compiled by Pandora.

Reporting by Stine Jacobsen; Editing by Christian Schmollinger, editing by Louise Heavens

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