World’s largest jewelry maker Pandora sees stock tumble as sales slow

Shares in Pandora, the world’s largest jewelry maker by production capacity, fell sharply on Monday as investors were concerned about weak sales growth at its own stores in the third quarter.

The Danish company lifted its full-year outlook, citing strong US sales, but its share price dropped nearly 7 percent in early trade as it also said sales at Pandora stores grew just 5 percent in the third quarter, while analysts had expected 14 percent growth.

Pandora’s shares had surged 40 percent this year as the company had seen sales top pre-pandemic levels since shops reopened after lockdowns.

“The sell-out growth is kind of disappointing in Q3,” said Sydbank analyst Per Fogh.

Still, the company said it had continued to see strong sales in the US, its biggest market, in the third quarter as massive government stimulus and vaccinations against COVID-19 fueled spending on goods and services. 

Pandora store opening for business
US stores benefitted from consumer spending spurred by government stimulus.

For 2021, Pandora now expects organic sales growth of 18 percent to 20 percent, up from a previous forecast of 16 percent to 18 percent, and an earnings before interest and tax (EBIT) margin of 24 percent to 24.5 percent, up from a previously forecast 23 percent to 24 percent. However, that was below an average forecast of 24.6 percent from analysts compiled last month.

“COVID-19 and the unusually high level of US growth continue to create increased uncertainty around the guidance,” it added.

Pandora, best known for its silver charm bracelets, said third-quarter sales came in at $734.92 million, beating the estimate from an analyst poll compiled by the company.

Woman walks past Pandora store
The Danish company is famous for its chunky charm bracelets.
SOPA Images/LightRocket via Gett

It reported quarterly EBIT above analyst estimates, and resulted in an EBIT margin of 20.2 percent.

“Revenue growth and the EBIT margin were lifted by continued strong US performance and a sequential improvement in Europe as COVID-19 restrictions were eased,” Pandora said.

The firm will report full third-quarter earnings on Nov. 3.

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