Pandora UK revenue growth slows to 2% in Q1 2017

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Jewellery giant Pandora has reported a 2% revenue growth in local currency in the UK for Q1 2017.

In Q1 2016 revenue in the UK increased by around 30% and contributed to 30% of revenue in EMEA. At the time this was credited to positive sales-out development and the expansion of the brand’s store network. In Q4 2016, the UK reported a 7% increase (30% in local currency).

The brand attributes this year’s growth slowdown to an increasingly difficult retail environment.

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Overall, Pandora’s group revenue increased by 9% in Q1 2017 to DKK 5,159 million (£581m). This growth is in line with the brand’s earlier communicated expectations of single digit growth in Q1 2017.

Revenue from EMEA increased by 5% to DKK 2,198m (£249m), driven by a good performance in France and Italy. However, growth in this region was impacted by the depreciation of the British pound.

Elsewhere, revenue from Americas decreased by 5%. This has said to be due to a negative impact from network restructuring in the US. In Asia Pacific the jewellery giant reports a strong performance (up 44%), with the region now accounting for 25% of group revenue.

Revenue from Pandora owned retail increased 38%, and represented 38% of group revenue. Like-for-like sales growth for the brand’s owned concept stores was 8%.

Commenting on the results, Anders Colding Friis, chief executive officer of PANDORA, remarks:  “We are satisfied by this quarter’s results, having delivered good sales growth, including 8% like-for-like growth in our Pandora owned concept stores, and continued strong profitability.

We are very pleased with the performance in our important growth markets, with Italy, France and China continuing to show strong sales growth. Additionally, some of our most developed markets continue to perform, with revenue from Australia up 27%. However, the retail climate in the US remains difficult, which was reflected in our performance in the US for the quarter.”

Overall, gross margin was 73.3%, compared to 74.6% in Q1 2016. This was impacted by headwinds from currency and product mix.

EBITDA increased by 7% to DKK 1,879 million (£213m).

Revenue from the Pandora e-stores increased by 63% to DKK 304 million (£34m) corresponding to 6% of total revenue compared with 4% in Q1 2016. The positive development was mainly driven by the US, as well as the online introduction in China in Q4 2016.

At the end of Q1 2017, Pandora e-stores were available in 17 countries compared with 14 at the end of Q1 2016.

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