Trumpeting higher store traffic, Pandora reported organic revenues gained 15 percent in its fiscal second quarter to 6.77 billion Danish kronor, or $991.7 million at current exchange.
The preliminary numbers, released Monday evening, beat overall analysts’ expectations, but a 5 percent like-for-like gain in the U.S. signaled a “sequential slowdown,” according to Citi analyst Thomas Chauvet, who awarded the Copenhagen-based jeweler a silver instead of a gold for its quarterly performance.
Like-for-like sales gained 8 percent overall, with Europe tracking at 10 percent and the rest of the world at 13 percent.
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Its core charms business improved a slim 2 percent, while noncharms increased 31 percent, according to Citi’s tallies.
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Pandora bumped up its annual revenue guidance to 8 to 10 percent in May when it reported 18 percent organic growth in the first fiscal quarter.
The jeweler now expects organic growth to come in between 9 and 12 percent. It flagged a record gross margin of 80.2 percent, crediting its vertically integrated business model, price increases and cost efficiencies.
“Our strategy continues to take Pandora to new heights despite general consumer spending being somewhat sluggish,” Alexander Lacik, president and chief executive officer, said in a statement. “We have successfully started the journey to make Pandora known as a full jewelry brand, and our results show that consumers like what they see. Thanks to our strong performance, we are again raising revenue guidance for 2024 and look to the second half of the year with optimism.”
“The Q2 EBIT [earnings before interest and taxes] margin remained solid at 19.8 percent,” the company noted.
In a research note June 29, HSBC flagged concerns that rising silver prices are putting a dent in margins, but downplayed that concern.
“Pandora’s position in the affordable jewelry segment has helped organic growth outperform luxury peers’ by 7 percent on average in the past three quarters,” said HSBC, which had projected 12 percent organic growth for Pandora in the second quarter versus negative 1 percent for the luxury firms it covers.