UPDATE 2 – Pandora Increases Advice With Pandemic Closing Fewer Stores
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COPENHAGEN, Aug.6 (Reuters) – Jeweler Pandora on Friday raised its full-year sales and profit margin forecast on Friday, predicting that fewer stores would close due to the pandemic than initially expected.
The Danish company said it now expects underlying sales growth of 16-18% this year, up from its previous estimate of more than 12%. He forecast a profit before interest and tax (EBIT) margin of 23% to 24%, compared to more than 22% previously.
“The updated forecast is based on the assumption that 5% of stores will be temporarily closed or severely affected due to COVID-19 in the second half of 2021,” he said in a statement.
Pandora had previously predicted that 5% to 10% of stores would be closed or severely affected by the pandemic. About 6% of its stores are currently temporarily closed or severely affected by the pandemic.
However, the company, known for its bracelets and charms, said it plans to permanently shut down 25 to 50 of its concept stores, compared to previous forecasts for “no major changes across the entire concept store network.” .
Pandora has around 2,700 concept stores worldwide, out of a total of around 6,700 points of sale.
Its shares, up about 14% for the year, closed 4.55% lower in Copenhagen.
Sydbank analyst Per Fogh said Pandora’s statement was “very positive,” but suggested some investors had been disappointed with the growth in in-store sales and permanent store closings, although he considered personally the latter as a plus.
“The pandemic and the store closings have proven to Pandora and the market that online sales can be a much larger share than ever before,” Fogh told Reuters.
Pandora said in-store sales growth, which it calls sales growth, was 62% in the second quarter compared to the same period in 2020 and 7% compared to the second quarter of 2019, before the pandemic.
The company, which is expected to release its detailed financial results on Aug. 17, said underlying sales were up 84% in the second quarter from 2020 levels and 13% from the same period in 2019. ( Report by Nikolaj Skydsgaard. Editing by Mark Potter, Kirsten Donovan)