Monitoring Pandora accounts also means keeping an eye on the trend of the entire jewelry market. Pandora is a global company and records, beyond its own managerial choices, also the trends that cross the precious sector. The Danish group, according to the financial results for the first quarter of 2023, seems to be going through a phase of slow growth. From what? From the problems of the world economy, it is the response of the company, which defines its performance as positive, but resilient. The increase in the cost of raw materials, especially gold and silver, is being felt. And in an environment of inflation it is difficult to make sales of mid-range jewels shine.
Specifically, organic growth in the first quarter of the year was 1%. But if the assets are compared with those of the corresponding period, on a like-for-like basis, the balance sheet indicates 0%. That is, the hands have remained steady: growth was zero in key European markets, the United States dropped to -7% (as in the fourth quarter of 2022), but all this was offset by the remaining markets, where Pandora grew by 12%. The result is also mitigated by the expansion of the network, which has favored a growth of 3%, with strong margins.
Speaking of margins: the gross result tends to rise and reaches 77.5%, a slight improvement. But the Ebit margin (gross profit) is at 21.5%, down by 1.5 percentage points compared to the corresponding quarter of 2022 due, says the company, to the accounting scan between revenues and costs. In the end, the 2023 Ebit will be substantially in line with that of 2022, thanks to a policy of price adjustments, which will be increased further. The company remains financially healthy and, like many other listed companies, is planning a buy-back to support the stock.
What are Pandora’s plans? The company says it has further solidified the Moment collection’s position as a global leader in the jewelry product category with the launch of a new geometric link bracelet. The new bracelet has seen strong demand in most geographic areas. Investments in other platforms (jewelry lines) have recorded results that are defined as encouraging. Timeless had a strong quarter and growth of 11%, while Pandora Me was up 21%. Diamonds by Pandora is proceeding as planned. That is, not much is known yet. The company is also preparing for a relaunch in China, in the wake of the post-covid crisis.
We started 2023 well with resilient growth and solid margins. Our investments in uplifting the brand are paying off, with good performance in our flagship Moments business and strong results from our new platforms, Timeless and Pandora ME. It is clear that we are increasingly the preferred jewelery brand, especially on gift occasions. The macroeconomic outlook remains uncertain, but we are confident in our ability to adapt and thrive, as we have demonstrated in recent quarters.
Alexander Lacik, president and chief executive officer of Pandora