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Pandora shares fall by a fifth after profit warning
SHARES in Danish jewellery maker Pandora, the world's largest by production volume, plummeted to their lowest level in more than four years on Tuesday after the company issued a profit warning and said it would cut staff.
Pandora, known for its charm bracelets, late on Monday lowered its sales and profit margin guidance for this year after it said both measures had fallen in the second quarter.
Shares were trading 19 per cent lower at 353 Danish crowns (S$75) at 0704 GMT, the lowest level since May 2014.
The company, which is due to publish its full second quarter results on Thursday, said it expects sales in local currencies to increase by between 4 and 7 per cent this year, compared with the 7-10 per cent it previously projected.
It also cut its forecast margin on earnings before interest, tax, depreciation and amortisation (Ebitda) for the year to around 32 per cent from 35 per cent.
"Another profit warning just a few months after the updated mid-term targets may put the credibility of the current strategy and management team in question," Berenberg analysts said in a note.
Pandora suffered as fewer people visited shopping malls in its key US market, prompting hedge funds to increase short positions in the company.
The company also said on Tuesday that it will cut 397 of its 27,000 employees to streamline operations and to protect profitability. REUTERS