Pandora Expects Hit from Second Lockdowns
Pandora has warned that fresh coronavirus-related restrictions could dampen the jeweler’s holiday sales and put the brakes on its steady recovery.
The Danish retailer has maintained its financial guidance for the year due to market uncertainty, but “the recent lockdowns and potential further Covid-19 escalation represent a clear downside risk,” the company said Tuesday.
Pandora is relatively exposed to the European market, where governments recently announced widespread curbs on gatherings. The company’s previous forecast — that sales would drop up to 17% this year on an organic basis — was based on an assumption that no major lockdowns would take place and that fewer than 10% of physical stores across the world would shut.
However, all stores in the UK, France and Belgium will close temporarily due to the new measures, meaning a total of 18% of the global network will shut, the company estimated. An additional 24% will operate with reduced hours.
“With the lockdowns in the UK, France and Belgium, and [generally] very restrictive government guidelines across Europe, the most important assumptions behind the guidance are no longer fulfilled,” Pandora added.
Pandora’s revenue fell 8% to DKK 4.07 billion ($639.7 million) in the third quarter ending September 30, with sales down 5% on organic basis, though the decline was less severe than in the second quarter. The company recorded a profit of DKK 343 million ($53.9 million), compared with a loss of DKK 119 million ($18.7 million) a year earlier.