Denmark's jewellery maker Pandora jumped to the top of the European benchmark on Tuesday (Feb. 5) after the embattled retailer reported better-than-forecast earnings for the final three months of 2018 and unveiled plans to save 1.2 billion Danish crowns (€160m) by 2022.
Shares of the Copenhagen-listed stock soared nearly 18 percent on the back of the announcement. The Danish brand which has been challenged by a fall in the number of shoppers announced its ‘Programme Now’ plan with aims to reduce costs following a disappointing 2018 when shares lost 38% of their value.
“2018 was a tough year for Pandora. This is evident in our financial results. 3% revenue growth in local currency, an EBITDA margin of 32.5%, and negative total like-for-like are not satisfactory. Our main growth initiative of refreshing the product portfolio did not improve sales” Chairman of the Board of Directors Peder Tubourgh said in a letter to shareholders.
As part of the two-year ‘Programme Now’, Pandora said it would cut back on promotions, buy back slow selling stock and invest in reigniting interest from consumers. The company expects up to 2.5bn crowns in restructuring costs this year and 2020.
Pandora was established by Danish goldsmith Per Enevoldsen and his wife Winnie in Copenhagen in 1982. In 1987, the first in-house designer joined them and two years later the company decided to start manufacturing its jewellery in Thailand.
In 2008, Danish private equity group Axcel acquired 60% of Pandora, and in 2010, the company was listed on the NASDAQ OMX Copenhagen Stock Exchange. Shares totalling DKK 9.96 billion (US$ 1.84 billion) were sold in one of the biggest IPOs in Europe that year, giving the charm-bracelet maker, a market capitalisation of around DKK 27 billion.
Pandora's products are sold in more than 100 countries on six continents through around 7,700 points of sale, including more than 2,700 concept stores.The company employs around 32,000 people, of whom more than 14,000 are located in Thailand. In 2018, Pandora's total revenue was DKK 22.8 billion (approximately EUR 3.1 billion).
Pandora is included in the blue-chip index OMX C25 and has around 60,000 registered shareholders.