Pandora Slashes Full-Year Forecast

RAPAPORT... Pandora has lowered its revenue expectations for the thirdtime this year following a disappointing quarter, and will implement a new programto cut costs. The Danish retailer had an "unsatisfactory" third quarter,with global sales down 4% year on year to DKK 4.98 billion ($761.5 million). Theretailer has therefore reduced its full-year revenue-growth outlook to between2% and 4%, from the earlier range of 4% to 7% it announced last quarter. At thebeginning of the year, it predicted growth of between 7% and 10%.Charms performed relatively weakly, with buyers choosing toplace fewer items than in the past on Pandora's iconic Moments bracelets. Otherjewelry categories recorded growth, the company said. Revenue in the US fell12% in local currency, while sales in the wider Americas region decreased 6%.Profit for the period plunged 30% to DKK 951 million ($145.4million). Pandora will implement "Programme Now," a plan for improvingand streamlining its business and reducing costs throughout the organization. Thecompany will significantly reduce its acquisitions of franchisees, and launchfewer new stores than it had originally intended, it said. The jeweler willonly open locations in key market areas where it has room to grow, includingChina, India and Latin America. The company will instead focus on growing its e-commercepresence, it noted. Sales on Pandora's e-commerce platform increased 52% yearon year for the third quarter, comprising 8% of the company's total revenue, up from 5% a year ago. "We have reviewed our business and decided to launch aforceful program with the aim to materially reduce costs across the company tofree up resources," said chief financial officer Anders Boyer. "At the sametime, we have to lift Pandora to the next level of maturity, operating as amore unified global company. We have taken the first major step in the programtoday by changing our network-expansion plan." The current efforts are in addition to the DKK 350 million($53.5 million) cost reductions the company announced in August, when it alsoslashed nearly 400 jobs. The retailer is still searching for a replacement for CEOAnders Colding-Friis, who left the company in August following weak second-quarterresults. Pandora will use the rest of 2018 and 2019 to "reset thebusiness," Boyer added. Image: Pandora store, Thailand. (Shutterstock)