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Danish jeweller Pandora's results fall short, warns of China slowdown
[COPENHAGEN] Danish jewellery maker Pandora, known for its charm bracelets, reported lower than expected first-quarter profit and warned of a slowdown in China.
The world's largest jewellery maker by production capacity also said UK and US markets were held back by fewer people shopping in malls and a lack of new products.
A shift by younger consumers away from jewellery and towards buying technology and spending on experiences has also taken a toll on the business.
The company reported first-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) of 1.67 billion Danish crowns (S$0.36 billion) , below the 1.75 billion estimated by analysts polled by Reuters.
"Growth in China experienced a slowdown in the quarter and actions are being taken to revert the development," it said on Tuesday.
It plans to increase and reallocate marketing spending and limit unofficial - or grey market - sales of its products.
Like-for-like sales fell in China, although revenue still rose 16 per cent in local currencies compared with the year-ago quarter.
UK sales were flat, while U.S. sales dropped 8 per cent in the quarter in local currencies.
Pandora, which produced 122 million pieces of jewellery in 2016, wants to boost sales by accelerating the number of designs being launched and add more self-owned stores rather than franchises.
It said the initial reception of its newest gold-plated 'Shine' collection, launched in March, had been "encouraging".