Por Helen Reid
LONDON, Feb 7 (Reuters) – Pandora, the world’s largest jewelry maker, said on Wednesday that its results since the beginning of the year have been “healthy,” with sales growth in the single digits, while announcing a share buyback program after a good run.
Pandora has been one of the few companies that has achieved outstanding performance among retailers and brands that target upwardly mobile consumers who want to purchase affordable luxury items.
The company is targeting global organic revenue growth of 6%-9% in 2024, it said, after reporting strong sales of its silver pendants and bracelets that have helped the share price rise to more than double since the beginning of last year.
The growth target is in line with the target set in October of a compound annual growth rate of 7-9% from 2023 to 2026.
It also announced a share buyback program of up to 4 billion Danish crowns ($577.7 million) and a dividend of 18 Danish crowns per share. His shares rose about 1% at the open.
One weak market was China, where Pandora said fourth-quarter sales fell short of expectations, falling to 116 million crowns from 143 million in the same quarter a year earlier.
Expectations of a strong rebound in China after the pandemic were dashed last year by the housing crisis and high youth unemployment, which curbed consumer spending and hit luxury brands such as Burberry.
China accounted for just 2% of Pandora’s total revenue in 2023, down from 5% of revenue as recently as 2021.
“We’re in it for the long haul. It’s going to be step by step, and one day China will be a significant part of Pandora,” CEO Alexander Lacik said in an interview with Reuters.
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The brand, which sold 107 million pieces of jewelry in 2023, compared to 103 million in 2022, has expanded its range of bracelets, with prices ranging from $60 to more than $2,000, and has been opening new stores and moving away from the wholesale.
“They have improved their communication and marketing very significantly,” said Jaime Vázquez de Lapuerta, a portfolio manager at Bestinver in Madrid, which owns Pandora shares.
Pandora has a great opportunity to open more stores in its largest market, the United States, he added. “Then you have a potential turn in China, but you don’t have to believe in that to be bullish on Pandora.”
The company’s revenue in the United States rose 2% to 8.3 billion crowns in 2023. Revenue in China fell 9% to 564 million crowns over the year.
($1 = 6.9329 Danish crowns)
(Reporting by Helen Reid; editing by Savio D’Souza, Mark Potter and Jan Harvey; Spanish editing by Javi West Larrañaga)