Pandora has withdrawn the financial guidance it offered in early February, stating that it is “no longer meaningful” given the COVID-19 pandemic.
“In the markets affected by lock-downs and other governmental measures, revenue is expected to be negligible while these circumstances prevail,” the jeweler stated.
Still, company said it is prepared to weather the storm, with the ability to “absorb several months of suppressed traffic and still be profitable and cash generative for the full year.”
Pandora noted that it is closing stores and offices as advised by local authorities in various locations. Its manufacturing facilities in Thailand continue to operate “without notable impact from the situation.”
The company stated that financial performance was strong in January and February, with “particularly good development” in its online store and in some key markets.
However, the coronavirus epidemic has had a major effect on sales. Pandora stated:
In China, like-for-like has been between -70% and -80% since late January. Revenue is currently slightly improving, but a return to normal demand will expectedly take time and be outside the control of Pandora. The European markets, and Italy in particular, have been visibly impacted since late February. Italy generated solid positive like-for-like in January and February, while trading in March has now almost come to a complete halt. Australia is impacted due to a decline in tourism and most other markets are now indirectly impacted through a general dampening of consumer sentiment. In the markets affected by lock-downs and other governmental measures, revenue is expected to be negligible while these circumstances prevail. The timing and pattern of the return to normalised business is obviously subject to uncertainty and outside the control of Pandora.
Pandora said it is “actively managing cost levels, including media, rent and other store costs, to ensure an appropriate balance between protecting profits while continuing to drive revenue from the Online store and build on the underlying momentum of the brand.” It still expects profits to be “strong” in first-quarter 2020.
Pandora jewelry is sold in more than 100 countries through 7,400 points of sale, including more than 2,700 concept stores.