Pandora to Open More Stores, Expand Lab-Grown Diamond Line

Copenhagen, Denmark—Pandora posted a strong finish to its fiscal year, reporting growth in its fourth quarter and for the full year despite macroeconomic issues.

The Danish jeweler is looking to the year ahead with cautious optimism, outlining its plans for new stores and an expansion of its lab-grown diamond jewelry line, Diamonds by Pandora.

“We ended 2022 on a high note. Despite the macroeconomic pressure on consumers and COVID-19 headwinds in China, we continue to deliver solid growth vs. pre-pandemic levels,” said CEO Alexander Lacik.

Its price adjustment on select items, announced in November, proved successful, said Pandora, with “positive” financial impact.

Fourth-quarter revenue was up 9 percent year-over-year to 9.9 billion Danish kroner ($1.4 billion) compared with 9 billion Danish kroner ($1.3 billion) in the fourth quarter last year.

It reported organic sales growth of 4 percent year-over-year, down from 10 percent last Q4, while its sell-out growth (sales in Pandora-owned and -operated stores) slipped 1 percent, down from 11 percent in the prior period.

Sell-out growth was negatively impacted in part by the fire in Pandora’s European distribution center in Hamburg, Germany in October 2022.

For the full-year, revenue was up 13 percent year-over-year to 26.5 billion Danish kroner ($3.8 billion) compared with 23.4 billion Danish kroner ($3.4 billion) in 2021.

Full-year organic sales growth was up 7 percent year-over-year, down from 23 percent in 2021 but ahead of its forecast of 4 to 6 percent growth. Its sell-out growth fell 4 percent, down from 20 percent in the prior period.

By sales channel, Pandora-owned physical retail stores saw sales up 24 percent year-over-year in the quarter and up 36 percent for the full year.

Online sales were flat in the fourth quarter and fell 6 percent for the year. Wholesale sales were down 5 percent in the fourth quarter and slipped 2 percent for the full year.

In the U.S., Pandora's largest market by revenue, quarterly sales were up 12 percent year-over-year while full-year sales were up 13 percent.

In 2022, Pandora opened 88 concept stores, mainly in the U.S. and China.

The company plans to open even more, eyeing approximately 140 to 190 openings in combined 2022 and 2023, well above the initial 100-150 openings it forecast at its Capital Markets Day in September 2021.

As for its jewelry, its “Moments” collections performed well, as did its “Diamonds by Pandora” lab-grown jewelry line, which got its start in the U.K. before launching in North America last year.

Its North American debut has been going to plan, said the company, with new collections in the works for this year. Half of the line’s purchases are from new customers and its lab-grown rings are the top performers, it said.

The company plans to bring the collection to new markets, though did not specify where the line would head next.

Pandora also noted it’s on track to meet its “green” goals, noting 61 percent of its silver and gold came from recycled sources in 2022. Its goal is 100 percent by 2025.

Looking to the year ahead, Pandora said it remains confident in its ability to navigate the “uncertain environment” while working on its strategic priorities. 

It expects to see organic growth falling or rising as much as 3 percent with an EBIT margin around 25 percent.

“Current trading in 2023 has been solid with a good, broad-based pick-up in sell-out growth. This is somewhat helped by an easier comparative base due to Omicron and earlier product launches than last year,” said Pandora, adding it is “pleased” that trading has been in line with its Q4 progress.

“We have started 2023 well and are confident that the transformation of the brand over the past few years puts Pandora in a good position to manage adversity and emerge stronger,” said Lacik.