Pandora warns of uncertainty in 2022 after record quarter

Pandora merchandise are seen at their retailer on the Woodbury Widespread Premium Retailers in Central Valley, New York, U.S., February 15, 2022. REUTERS/Andrew Kelly/Information

COPENHAGEN, Could 4 (Reuters) – Jewelry maker Pandora (PNDORA.CO) warned on Wednesday that larger inflation and the Ukraine conflict posed elevated uncertainty for its full-year earnings, regardless of reporting file first-quarter income and elevating its gross sales outlook barely.

“We’re more than happy with the sturdy begin to the yr delivering file income for a primary quarter,” Chief Government Alexander Lacik stated in an announcement.

Shares in Pandora have been down barely at 0727 GMT after rising 3.3% when the inventory market opened in Copenhagen.

“It is broad-based development, that means all our core markets aside from China are in good development and all product platforms are contributing to the expansion,” Lacik informed Reuters.

The Danish firm now expects full-year natural gross sales development to come back in between 4% to six%, in contrast with a earlier forecast of three% to six%, however stated the forecast for 2022 was topic to “elevated uncertainty”.

Lacik stated Russia’s invasion of Ukraine, COVID-19 and inflationary stress, which may have an effect on how individuals spend their cash, had created extra uncertainty because the begin of the yr.

Pandora, nevertheless, stored its forecast for development in earnings earlier than curiosity and tax margin (EBIT) unchanged at 25% to 25.5% regardless of seeing inflationary stress and elevated prices for vitality, transport and uncooked supplies corresponding to silver and gold.

“We’re absorbing these prices inside the steerage,” Lacik stated, including that getting out of Russia and inflation-related prices would result in unanticipated bills of 200 million Danish crowns ($28 million) this yr.

The agency hedges costs for its fundamental uncooked supplies, silver and gold, a yr forward, that means short-term spikes wouldn’t have an effect on Pandora, he stated.

The corporate stated gross sales within the first quarter rose 21% to five.7 billion crowns, a file and above a median of 5.2 billion anticipated by analysts in a ballot compiled by the agency in April.

“It is a testomony to the sturdy development from January, which continued into February and March with no noteworthy damaging impact from COVID-19,” Jyske Financial institution analyst Janne Kjaer stated in a word.

Pandora stated virtually none of its shops had closed within the first quarter, a substantial shift from final yr, when about 30% of its shops confronted momentary closures as a result of pandemic.

($1 = 7.0673 Danish crowns)

Reporting by Nikolaj Skydsgaard; Modifying by Louise Heavens and David Clarke

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