Pandora details huge revenue and store targets for 2017

Pandora Skegness

Pandora has set out its financial goals for 2017 and promised that it will expand its store network in newer as well as more developed markets as it chases further revenue growth.

The brand said that while it remains committed to growing sales from its existing network, it plans to add more than 275 new concept stores during the year of which roughly 50% are expected to be opened in Europe, the Middle East Africa. The rest will be split evenly between the Americas and Asia Pacific.

Pandora said that around half of the concept store openings will be company-owned stores, which is in line with its intentions to increase the owned and operated retail footprint.

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Last year it opened net 336 concept stores – almost one per day – and by the end of the year it had 2,138 concept stores around the globe.

The brand is forecasting sales in the range of DKK 23-24 billion (£2.6 billion–2.7 billion) this year, with existing stores expected to contribute roughly half of the growth, and expansion of the store network contributing the remaining half.

Pandora currently expects only single digit revenue growth in the first quarter of 2017, due to timing of shipments and a very strong performance in the first quarter of 2016.

Pandora revenue and store map

Pandora revenue and store map

Assuming current exchange rates, it anticipates a full-year tailwind effect from currencies on revenue of around 1 percentage point compared with 2016. EBITDA margin in 2017 is expected to be around 38%, however it is anticipated to be negatively impacted by around 0-1 percentage points from higher commodity prices.

Furthermore, assuming current exchange rates, Pandora predicts a full-year “headwind effect” from currencies on the EBITDA margin of around 1 percentage point compared with 2016.

CAPEX for the year is expected to be around 5% of revenue. The expected level of investments includes expansion of the crafting facilities in Thailand, investments in its distribution network, as well as IT investments.

Details of its financial goals for 2017 were given as the company reported group revenue of DKK 20 billion (£2.3 billion) last year, up 21% year-on-year. Net profit almost doubled to DKK 6 billion (£687m).

Meanwhile, revenue in the UK increased 7% in the fourth quarter of 2016 (30% in local currency), and contributed around 30% of revenue in EMEA.

Growth in local currency was driven by a positive development in existing stores, including the Pandora eSTORE, as well as the expansion of the store network, including net 33 new concept stores opened since Q4 2015, to a total of 228 concept stores at the end of 2016.

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