PARIS — Pandora on Monday lowered its guidance for full-year revenue growth and profitability on the back of disappointing second-quarter sales, and revealed it would ramp up the pace of store openings.
The Copenhagen-based jewelry firm reported revenues in the second quarter totaled 4.82 billion Danish kronor, or $747.4 million, representing a 4 percent rise in local currency terms, below consensus estimates.
The earnings before interest, taxes, depreciation and amortization, or EBITDA, margin stood at 31.1 percent, down from 33.4 percent during the same period a year ago, according to the pre-released results. The company now plans to publish full second-quarter results on Thursday instead of Aug. 14, as initially scheduled.
Under its revised guidance, Pandora sees sales increasing by 4 percent to 7 percent in local currencies in 2018, versus a previous forecast of 7 percent to 10 percent growth. It predicts a full-year EBITDA margin of about 32 percent, versus 35 percent previously.
The downgrade comes on the heels of a dip in first-quarter sales. Pandora, which saw a decline in profit last year, is working on improving its assortment of products while reining back price-slashing measures.
The firm said on Monday it now expects to open around 250 concept stores this year, instead of the 200 initially expected, of which two-thirds will be directly owned. It has revised the full-year impact of acquisitions to around 1.4 billion Danish kronor, compared with 1 billion kronor initially.
Piral Dadhania, analyst at RBC Capital Markets, said in a research note on Monday that Pandora appeared to be facing issues that were more structural than cyclical, and the bank did not see any immediate fixes to improve investor sentiment.
“We continue to be perplexed by Pandora’s quest for growth, particularly through its acquisition and opening strategy against a challenged retail like-for-like environment,” he wrote. “For us, the viability of this strategic direction [acquisitions and store openings] and Pandora management’s ability to deliver is now under close scrutiny.”
Separately, Pandora revealed the appointment of Sid Keswani as president of its Americas division, which accounts for around a third of its revenues, effective Aug. 13. The executive was previously chief executive officer of Fiesta Mart, a Texas-based grocery store chain, and prior to that spent 19 years at Target Corp.
Keswani will report to Pandora ceo Anders Colding Friis and will join the company’s management board.