Pandora’s 2017 full financial report today showed that not only the US in the largest market remained weak during the holiday season, but also the growth in the Asia Pacific region slowed down more rapidly. Although the Danish jeweler reassured investors that the worst time had passed and the turning point would occur in 2018 in the January Capital Markets Day, the outlook remained unfavorable in the first quarter. The group’s share price tumbled by up to 8.5% after the opening bell today. The DKK 515.4 was a three-year low.
Pandora A/S Pandora will continue to correct the problem of insufficient product innovation in the current quarter, so it is expected that the growth will further slow down. The group had previously announced 2017 annual revenue growth of 12.3% year-on-year to DKK 22,781 million, less than the group’s own forecast of DKK 230-24 billion, an increase of 15% at local exchange rate, which is substantially narrower than the 24% in 2016 The 2018-2022 annual revenue growth outlook (measured by local exchange rates) has dropped to 7%-10%, which has caused investors to lose sight of the news. Even worse, the first quarter growth rate will not be able to reach this target.
Anders Colding Friis, CEO of Pandora A/S Pandora, pointed out in the earnings conference call that the US retail market is still very challenging. In the fourth quarter, entity same-store sales are still negative. He said that the Group will continue to increase its business with product and e-commerce. With the acceleration of online sales growth, the comparable sales growth of the US Concept Store in the fourth quarter will increase from 5% in the third quarter to 27%, eliminating the acquisition of franchise. The overall adjusted income growth after operating stores and other one-time factors further decreased from 4% to 2%. Anders Colding Friis said it does not expect the US retail environment to improve this year.