Pandora ups financial expectations for second time

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Solid nine months driven by new products; UK Q3 sales up 13.6%.

Pandora has increased its financial expectations for the full year 2013 for a second time, following its preliminary results for Q3 2013.

The brand described a solid performance in the first nine months of the year, with revenue growth across all major regions, despite tougher foreign exchange rates, particularly in Q3 2013.

The Danish brand’s board of directors has revised its revenue expectations for 2013, inreasing it to DKK 8.6 billion (£912bn) for the year, from previously guided about DKK 8 billion.

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With a view to Q3 2013, revenue was DKK 2,255 million (£257m), an increase of 25.7% (32.9% in local currency) compared to Q3 2012.

According to Pandora, the main drivers are continued strong sales of newly-launched products, continued strong revenue growth in new markets as well as global network expansion. Its product prices have also remained largely stable against Q3 2012.

Between January and September of 2013, Pandora opened 116 concept stores and has now said it anticipates "an acceleration of openings" in Q4 2013.

Like-for-like sales-out in Pandora’s concept stores in Q3 2013 continued to be strong with US sales-out up 12.6%, UK up 13.6%, Germany up 8.2% and Australia up 25.2% compared to Q3 2012.

Pandora chief executive Allan Leighton said: "Sales momentum continued in Q3 2013, with better than expected strong sales-in and sales-out performance in all major markets, and a significant step up in the new markets, where an increased share of revenue went through to the bottom line, due to improved operational leverage. As a result of the combination of these factors and increased confidence in our ability to supply this level of demand we are upgrading our guidance."

At the end of Q3 2013, sales return provisions equated to approximately 8% of 12 months rolling revenue value. The continuous success of the Company’s newer products has resulted in lower product returns. Therefore, provisions for future returns at the end of the year are expected to remain at around 8%, marginally lower than previously communicated 9%. The change had a positive effect on revenue of approximately DKK 80 million and approximately 1 percentage point on the EBITDA margin in Q3 2013.

For 2013 as a whole, the brand expects an EBITDA margin of approximately 30% (from previously guided approximately 27%), and CAPEX to be about DKK 400 million.

The brand expects to have opened about 195 concept stores by the year-end, from the previously guided figures of 175.

A full financial report for Q3 2013 will be released on November 12 2013, where Pandora’s executive management will elaborate further on the results.
 

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