Pandora sees 2020 sales falling as much as 20% amid pandemic

[FRANKFURT] Pandora A/S, which makes more pieces of jewellery than any other company in the world, said organic sales may contract as much as 20 per cent this year as the virus suppresses demand in some of its key markets.

Pandora said that recent improvement "stalled" in the third quarter. The Copenhagen-based company provided guidance for the first time since suspending its previous forecast in March. It also released its second-quarter earnings report.

Pandora's Ebit margin will be in a range of 16 per cent to 19 per cent this year. That compares with almost 27 per cent in 2019, a year that was at the time seen as a transition period for the company as it relaunched its brand under Chief Executive Officer Alexander Lacik. The executive had joined earlier that year following a string of departures from Pandora's top management.

Citi said the market may now lower its expectations for Pandora's 2020 profit. There might be "some negative share price reaction," when the stock starts trading on Tuesday, in part due to its "strong" performance so far this year, Thomas Chauvet, an analyst at Citi, said in a note. The shares are up more than 50 per cent year to date.

Pandora, which last month reported some preliminary second-quarter numbers, said on Monday that sales in the US, its biggest market, fell 35 per cent on organic terms in the quarter. The drop was 48 per cent in Italy, whereas Germany posted the best performance among the company's top 7 markets with a 6 per cent decline.

"The continued local spikes in incident rates and inherent commercial impact from social distancing are expected to continue to negatively impact revenue in the second half of the year," Pandora said.

BLOOMBERG