Pandora lifts growth targets

London — Jewellery retailer Pandora raised its growth targets on Thursday, saying investments in the brand and store network were paying off, though it sounded a note of caution on China.

The company, which gave its updated outlook before a capital markets day in London later in the day, also said it would expand into other Asian countries including India.

Pandora, which calls itself an “affordable luxury” brand, selling jewellery from silver charm bracelets to lab-grown diamonds, now targets compound annual growth of 7%-9% for the 2023-26 period and an Ebit (earnings before interest and taxes) margin of 26%-27% by 2026.

It now aims for a like-for-like compound annual growth rate of 4%-6%, up from 3%-5%, and a higher contribution from the expansion of its store network of about 3%, up from 1%-2%.

Pandora’s Copenhagen-listed shares have gained about 45% this year as investors bet on the success of its “Phoenix” strategy launched in 2021 which has seen it increase marketing spend and open more stores.

“We have fundamentally changed how we work, and the organisation is much stronger,” CEO Alexander Lacik said in a statement.

Pandora said it still sees long-term growth potential in China but “building a sizeable business there will be a longer journey than originally anticipated”. In 2021 Pandora said it aimed to triple revenue in China from the 2019 level.

A property slump, weak consumer spending and high debt levels are weighing on China’s economy, hurting many Western brands and retailers with a big exposure to China.

Pandora, which aims to open 225-275 new concept stores in 2024-26, said it would start expanding into countries such as South Korea, Japan and India.

Globally the company targets revenue of 34-billion to 36-billion Danish krone ($4.79bn-$5.08bn) in 2026, up from about 27-billion krone expected for 2023.

Reuters