PARIS — Copenhagen-based jewelry firm Pandora flagged a slowdown in growth in China as it reported a 1 percent dip in first-quarter sales.
Sales for the three-month period totaled 5.12 billion Danish kronor, or $819 million, representing a 6 percent rise in local currency terms. Earlier this year, the company said it expected first-quarter sales to fall below the annual growth target of between 7 and 10 percent sales growth in local currencies.
Pandora, which saw a decline in profit last year, is working on improving its assortment of products while reining back price-slashing measures.
“We have good momentum on our strategy toward 2022,” chief executive officer Anders Colding Friis said in a statement.
“As anticipated, sales growth has started at a moderate pace, and is expected to improve as we gradually introduce more newness in our product assortment throughout the year,” he added.
The company reported gross margins of 75.8 percent over the quarter, an increase from 73.3 percent in the same period last year.
Earnings before interest, taxes, depreciation and amortization amounted to 1.67 billion kronor, down from 1.88 billion kronor a year earlier, and Pandora said it returned 1.22 billion kronor to shareholders through an ordinary dividend and a share buyback.
Sales from the jeweler’s own retail network rose 32 percent, accounting for 51 percent of group revenue.
The company has been expanding its own network by opening stores and buying up franchise units. Last year, the proportion of revenue from its own stores was 43 percent.
In terms of regions, sales in the Americas were down 4 percent in local currency terms, although the U.S. posted a 9 percent increase on a like-for-like basis. In Asia, sales rose 1 percent in local currencies and Pandora said it was implementing a commercial plan to strengthen its Chinese business.
The full-year target calls for flat to slightly lower like-for-like growth, which “we believe is a realistic assessment of Pandora’s revenue potential going forward given U.S. and U.K. maturity in particular,” Piral Dadhania, analyst with RBC Europe, said in a note to clients.
“We believe there is some headroom in the strategy guidance targets to give the management team some breathing space,” Dadhania added.
Known for its charm bracelets, Pandora is increasing its offer of other types of jewelry and aims for an equal balance in revenues from charms and other jewelry, like necklaces, earrings and rings, by 2022.