Shares in biggest jewellery maker Pandora plummet
Sales growth warning and job losses and a cut to its forecast margin on earnings before interest, tax, depreciation and amortisation scare investors
The world's largest jewellery maker by production volume said it now expected sales in local currencies to increase by between 4 and 7 per cent this year, compared with the 7 to 10 per cent it previously projected.
It also cut its forecast margin on earnings before interest, tax, depreciation and amortisation (ebitda) for the year to around 32 per cent from 35 per cent, Reuters said.
Pandora didn’t give a reason for the cut, saying it will provide details at its second-quarter earnings report due later this week. The company, which produces more pieces of jewellery than any other manufacturer, has been struggling with slowing growth in key markets the US and China and has lost more than half of its market value since the beginning of 2017, according to Bloomberg.
The shares fell as much as 20 per cent, the most in seven years, to 343 Danish kroner (Dh195.61) as of 9:04am at the open of trading in the Danish capital.
Pandora also said it will cut 397 jobs of its 27,000 work force as part of a cost reduction plan to save about 150 million kroner a year from 2019. Pandora said it will also shift some resources to digital and e-commerce activities and will centralise operations and the supply chain structure.
However, Pandora, which has suffered from slowing mall traffic in its key US market, also said it would add around 250 concept stores this year, rather than the 200 it had planned, according to Reuters.
Around half of those will be in European, Middle East and African countries, while the rest will be split evenly between American and Asia-Pacific countries.
Second-quarter sales totalled 4.82 billion kroner, slightly lower than a year earlier, the company said. The ebitda margin for the three month period was 31.1 per cent, down from 33.4 per cent a year earlier, it added.
The company said it would publish its full second quarter results on Thursday, rather than on August 14 as planned.
Updated: August 7, 2018 12:38 PM