Pandora Sees Sales Drop 8% in US

Copenhagen, Denmark--First quarter sales dropped 8 percent year-over-year in the U.S. market for Pandora, with the Danish bead and jewelry brand blaming a lack of fresh product and slow sales in physical store.

Revenue in the United States in Q1 totaled $162 million, with $5.6 million of that coming from the acquisition of franchise stores. (Pandora acquired a total of 17 franchise stores globally in the first quarter, the bulk of them in the United Kingdom.)

Like-for-like sales in the company-owned concept stores grew 9 percent, but that growth was mainly driven by sales on the e-commerce site, which is included in the like-for-like calculation.

Pandora continues to put money behind company-owned concept stores, opening 64 of them in the U.S. over the past year. It now has a total of 380 concept stores in the U.S. market, with 117--or 31 percent--of those being company owned.

Revenue in the Americas region as a whole (the U.S., along with Canada, Latin America and the Caribbean) also declined in Q1, falling 4 percent year-over-year.

The region is set to soon be under new leadership for Copenhagen, Denmark-based Pandora; Scott Burger stepped down in February after nearly six years heading the market. The company, which has its headquarters for the Americas in Baltimore, said it plans to name Burger’s replacement in the second quarter.

Globally, first quarter revenue was up 6 percent year-over-year to $820.5 million.

Pandora’s biggest boost came from the EMEA region (Europe, the Middle East and Africa), while slow sales in China were a drag on the Asia-Pacific region.

Revenue from Pandora-owned retail outlets was up 32 percent in the quarter, and now accounts for more than half the company’s total sales.

EBITDA dropped from $299 million (36.4 percent margin) to $265.3 million (32.6 percent margin).

In the company’s statement on first quarter results CEO Anders Colding Friis said: “As anticipated, sales growth has started out at a moderate pace and is expected to improve as we gradually introduce more newness in our product assortment throughout the year.”

The company ended the quarter with 2,485 concept stores worldwide.

Of those, 1,022--or 41 percent--are owned and operated by Pandora. The number of company-owned stores is up by 660 year-over-year.