Pandora reports fall in profits and revenue
Danish jewellery retailer Pandora has reported a fall in revenue and profits as the company implements a stock rebalancing programme.
Group revenue fell by 9.5% to DKK 1.26 billion in the period while profit dropped 89.9% to DKK 63 million. EBITDA decreased by 57% to DKK 220 million.
The company reported losses in every region in which it operates and said that the stock rebalancing campaign launched in February could cost the company up to DKK 800 million.
In the first half of 2012, Pandora received returns of discontinued products totalling DKK 523 million and replaced DKK 472 million worth of stock.
Chief executive Bjorn Gulden said: "Our operations continued to develop as expected during the quarter, even with a slightly better gross margin helped by a changed product mix.
"There is still hard work ahead of us, but there are also some bright spots. The exchange program is proceeding with high participation and good satisfaction among our retailers.
"At the same time, our new collections are being positively received by our customers."
Pandora reiterated its earlier forecast that full-year 2012 revenues would be above DKK 6 billion and that the EBITDA margin would be in the "low 20s" in percentage terms. However the company increased its guidance for its 2012 gross margin to the "mid 60s" in percentage terms from the "low 60s".
The company said its revenue assumption was based on plans to open 200 new concept stores in 2012, with a particular focus on new markets in Italy, France, Russia and Asia.
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