Pandora, the Danish jewellery maker, has achieved impressive sales growth in the second quarter, surpassing pre-pandemic levels, primarily driven by a robust performance in the United States. However, the company experienced a decline in sales in China. In the April-June period, Pandora’s total comparable sales increased by 7% compared to the same period in 2019.

The significant growth in the United States can be attributed to various factors, including substantial government stimulus and widespread COVID-19 vaccinations. As a result, consumers have been encouraged to spend on goods and services, leading to a doubling of quarterly sales compared to the previous year and a 63% increase compared to 2019 figures.

Pandora has observed signs of gaining market share in its largest market, the United States. However, the company anticipates that the extraordinary growth experienced in the first half of the year will moderate in the second half. Chief Executive Alexander Lacik revealed in an interview with Reuters that the company expects increased growth in Europe as stores reopen and has adjusted its expectations accordingly.

While the United States market is performing strongly, there are concerns about whether the weak performance in other regions can be offset. Handelsbanken raised this issue in a research note, questioning whether Pandora can stabilize its European operations while facing slower growth in the United States.

Sales in China, the world’s largest jewellery market, declined by 13% in the second quarter compared to 2019. Lacik acknowledged that addressing this decline will take time and emphasized that the company’s efforts to turn things around will begin later this year. Further details on Pandora’s brand repositioning in China will be shared at its capital markets day in September.

Despite the challenges, Pandora has raised its full-year sales and profit margin forecasts due to a lower expected number of store closures related to COVID-19. Additionally, the company has announced a new share buyback program, following the trend of European firms engaging in stock repurchases during a robust earnings season.

While Pandora’s overall performance remains strong, balancing growth in the United States with stabilization efforts in other regions, particularly China, presents a challenge. To solidify its presence and market share globally, strategic initiatives and brand repositioning will be crucial for achieving sustained growth and profitability.

Useful Links:
1. Pandora Official Website
2. Reuters Article on Pandora’s Q2 Sales Rise