PANDORA, the world’s biggest jewellery maker, said on Wednesday (Feb 7) its performance since the start of the year has been “healthy” with high single-digit sales growth, as it announced a share buyback programme after a strong run.

Pandora, which sells charm bracelets with prices ranging from US$60 to more than US$2,000, has been a rare bright spot among retailers and brands targeting aspirational consumers with affordable luxury items.

The company aims for organic revenue growth of 6 to 9 per cent in 2024, it said, after reporting strong sales of its silver charms and bracelets which have helped its share price to more than double since the start of last year.

“Despite the worldwide macroeconomic uncertainties… the company is manoeuvring strongly and better than the market,” said Soren Lontoft Hansen, senior analyst at Sydbank.

The growth target is in line with a goal set in October for a 7 to 9 per cent compound annual growth rate from 2023 to 2026.

Pandora also announced a share buyback programme of up to four billion Danish kroner (S$775.4 million), and a dividend of 18 Danish kroner per share. Its shares rose 0.5 per cent at the open.

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A weak spot was China, where Pandora said fourth-quarter sales missed expectations, falling to 116 million kroner from 143 million kroner in the same quarter a year earlier.

Expectations for a strong post-pandemic rebound in China were derailed last year by a property crisis and high youth unemployment, curbing consumer spending and hitting luxury brands like Burberry.

China accounted for just 2 per cent of Pandora’s total revenues in 2023, down from 5 per cent of revenues as recently as 2021.

“We’re in there for the long game. It’s going to be step by step, and one day China will be a significant portion of Pandora,” CEO Alexander Lacik said in an interview with Reuters.

Pandora, which sold 107 million pieces of jewellery in 2023, up from 103 million in 2022, has been building its brand, opening more stores and moving away from wholesale.

“They have improved their communication and marketing very significantly,” said Jaime Vazquez de Lapuerta, portfolio manager at Bestinver in Madrid, which holds Pandora shares.

Pandora has a big opportunity to open more stores in its biggest market, the US, he added. “Then you have a potential turnaround in China, but you don’t need to believe in that to be bullish on Pandora.”

Pandora said its marketing spending would increase over the first quarter as it revamp the brand, impacting first-quarter Ebit (earnings before interest and tax) margin. The company aims for 25 per cent Ebit margin for 2024 as a whole.

Marketing costs grew by 5 per cent in 2023 in constant currencies, but the cost as a share of revenues declined slightly to 13.7 per cent.

The company’s revenue in the US increased by 2 per cent to 8.3 billion kroner over 2023. Revenue in China fell by 9 per cent to 564 million kroner over the year.

Pandora’s CEO said he is not concerned about higher transport costs due to shipping disruption in the Red Sea, given Pandora’s products are small and light, making freight a small fraction of overall costs.

“It’s not something I am sleepless over,” said Lacik. REUTERS