Pandora had a banner year in 2021, with sales surging in the US, but CEO Alexander Lacik (pictured) predicts a possible ‘correction’ to its growth in America.
“We expect US growth to slow a little more year-over-year,” Anders Boyer, Pandora’s executive vice president and chief financial officer, said on a conference call following its financial results.
The company still expects to outperform the rest of the U.S. jewelry market, which it predicts will shrink 10-20% in 2022. Pandora expects U.S. sales to fall to “single digits” over the next year.
For now, however, the US market remains “on fire”, as Boyer put it. In the fourth quarter of 2021, sales growth increased by 39% compared to the fourth quarter of 2019, which is actually lower than Pandora’s US growth level in the first nine months.
The company noted that it still hopes to eventually double its U.S. revenue in 2019. In response to a question, Lacik did not believe inflation would be a significant factor impeding growth.
“Historically, when there is high inflation, [the mid-price segment] seems to have suffered less than others,” he said. “Is this going to repeat itself? Time will tell us. I don’t think it’s going to be a huge drama… At least that’s not what Pandora has been through in the past.
Lacik noted that the brand performed well in all of its major markets, with the exception of China, where its performance was “unsatisfactory”.
Its new lab-grown diamond line, Pandora Brilliance, has performed well, and the brand plans to put additional “muscle” behind it as it expands globally, executives said.
But Lacik declined to say where the line went next. “We’re not going to enter many markets all at once,” he said.
He noted that the Brilliance line likely attracted more “freebies” than he originally anticipated, as Brilliance was originally designed as a self-purchase product.
In January, Pandora announced that it was acquiring 37 franchise stores in the United States and Canada from Ben Bridge Jeweler, its largest North American franchisee.
The company’s full-year organic growth increased by 23% compared to 2020. It also announced a DKK 3.3 billion share buyback program.
(Photo courtesy of Pandora)
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