Pandora, the Danish jewellery giant, has announced that its fourth-quarter and full-year results for 2022 were in line with its expectations, driven by strong brand performance and resilient growth. However, there is uncertainty surrounding the company’s sales for 2023, as indicated by its wide guidance range. The predicted organic sales range of -3% to +3% highlights the potential for various outcomes.

Despite challenges such as macroeconomic pressures and the impact of the Covid-19 pandemic on consumer behavior in China, CEO Alexander Lacik reflected on the positive end to 2022. Pandora reported fourth-quarter sales of DKK 9.9 billion, exceeding analysts’ expectations. The company also experienced 4% year-on-year organic growth and a significant 19% growth compared to the pre-pandemic fourth quarter of 2019. These positive results were achieved despite a fire at the European Distribution Center affecting operations.

Pandora demonstrated good discipline in maintaining a higher gross margin in a highly promotional environment. The company also saw an increase in the EBIT margin in the fourth quarter of 2022 compared to the same period in 2021, primarily due to effective cost control measures. These results indicate Pandora’s strong brand performance and resilience in the face of macroeconomic uncertainty.

Sell-out growth in the United States improved sequentially by -7% while Europe remained resilient with +2% sell-out growth, despite some pockets of weakness driven by macroeconomic factors. Pandora surpassed its own guidance for the full year, achieving 7% organic growth and revenue of DKK 26.463 billion. The EBIT margin of 25.5% was at the higher end of the forecasted range.

Pandora’s Phoenix strategy, which focuses on growth and innovation, made progress in the fourth quarter of 2022. The Moments category maintained flat sell-out growth compared to the same period in 2021. The company successfully adjusted prices, resulting in a positive financial impact. Pandora’s launch of Diamonds by Pandora in North America is on track, and new collections are planned for 2023, along with expansion into new geographical markets.

Despite the uncertainty surrounding the year ahead, Pandora expressed confidence in its ability to adapt to the uncertain environment while prioritizing its strategic objectives. The company has already seen solid trading in the current year, with a broad-based increase in sell-out growth. Factors contributing to this growth include a more favorable comparison to the previous year when the Omicron variant was prevalent and earlier product launches. Overall, Pandora is pleased with its underlying trading, aligning with the positive momentum from the fourth quarter of 2022.

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