As more customers visited its stores, Danish jewelry manufacturer Pandora (PNDORA.CO) announced a smaller-than-expected decline in third-quarter earnings on Wednesday. The company also lifted its full-year sales projection, which increased the value of its shares.
The firm, well-known for its charms and bracelets, reported that trade in the fourth quarter was “healthy” thus far and that organic sales increased by 11%, above forecasts of 6% growth.
In addition to maintaining its earlier prediction of a 2%–5% operating profit margin, Pandora now projects full-year organic revenue growth of 5%–6%.
With 6,500 places of sale, including 2,500 concept shops, Pandora sells jewelry in more than 100 countries. As of 08:29 GMT, its shares were up 5% to 847 crowns.
Despite rising expenses, operating profit decreased to 920 million crowns ($132 million) from 978 million the previous year. However, this is still higher than experts’ predictions for an 875 million crown profit in a Pandora poll.
The U.S. led the improvement in like-for-like sales as traffic increased due to recent brand activities. Analysts at JPMorgan stated in a note that “this is strong in the context of an overall volatile retail environment.”
CEO Alexander Lacik stated, “Our investments in the brand are drawing more consumers into our stores.”
The reasonably priced luxury company reported that price increases and cost reductions allowed its gross margin to hit a record 79%.
Despite this, the business anticipates the net impact of rising commodity prices and foreign exchange rates to turn positive in the fourth quarter, even if the operating margin decreases. The group stated there had been an unanticipated surge in demand in the third quarter for all markets and collections driven by travelers. They added that this summer vacation trend might not recur in the same period the following year.
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