To Pandora, a character from Greek mythology, Zeus entrusted a vase, with the warning never to open it. But curiosity was stronger and Pandora freed among men all the evils enclosed by the gods in the box. The jewelry manufacturer Pandora, on the other hand, does not have these problems: growing sales and profits come out of her box. The latest data refer to the third quarter of 2022. The Danish company recorded organic growth of 3% and a growth in sales of 1% compared to the third quarter of 2021 (+ 13% organic growth towards the corresponding period of 2019, pre-covid). Other data: Pandora’s largest product platform, Moments, recorded 2% growth compared to the third quarter of 2021. Diamonds by Pandora (synthetic diamond jewelry) launched in North America on August 25 and reached a share 3% sell-out.
But, despite everything, the United States recorded a 3% decline, as a result of the end of post-covid government subsidies, which evidently also served to buy jewelry. On the other hand, the United States recorded strong organic growth of 56% compared to 2019, in line with last quarter. Mixed signals from the UK and Australia, which recorded double-digit organic growth compared to 2021, while France is suffering from the impact of reduced promotional activity. And while Germany is doing well, Italy has seen some signs of weakening consumer sentiment.
Our growth path continues into the third quarter and we are ready for the November-December commercial peak with a fantastic product line-up. The launch of Diamonds by Pandora has been encouraging and new products will soon be added to the platform to fuel the holiday season. Despite the macro-economic and geopolitical uncertainty, the purchasing habits of our customers have remained substantially unchanged. Thanks to our financial strength and our position in the affordable gifts industry, we are well equipped to cope with a potential recession and to seize the most important investment opportunities, for example to expand our store network. We are already taking precautionary measures to ensure our profitability should circumstances change.
Alexander Lacik, President and CEO of Pandora
It should also be noted that Pandora has raised the prices of some selected items in North America, while remaining in the affordable jewelry range. A similar price increase (4% on average) was implemented globally at the beginning of the fourth quarter: inflation does not spare the jewelry. From a financial point of view, it holds the gross margin. Finally, Pandora expects organic growth of 4-6% and an EBIT margin (gross profits) of 25.0-25.5% for the whole of 2022.