COPENHAGEN - British jewellery producer Pandora said on Tuesday that a strong performance in the United States spurred rapid sales growth in the second quarter, but sales in China fell.
Pandora, which aims to strengthen its brand in the two biggest economies, said its comparable total sales in April-June jumped 7% compared to the same quarter of 2019.
In the United States, quarterly sales more than doubled compared to a year earlier and were up 63% compared to 2019 as massive government stimulus and vaccinations against COVID - 19 fuelled spending on goods and services.
Pandora said it saw indications that it was gaining more market share in the United States, its biggest market, but warned that the high growth would come down in the second half of the year.
We have raised expectations on U.S. growth versus the first half and then we dampened expectations in Europe when the stores reopen and we are seeing that play out, chief executive Alexander Lacik told Reuters in an interview.
Pandora shares, which gained roughly 25% this year, plunged around 1% in early trading.
The questions arise for how long growth in the U.S. operation can compensate continued weakness elsewhere and can Pandora stabilize its European operations to coincide with slower U.S. growth? Handelsbanken said in a research note.
Sales in China, the world's largest jewellery market, fell 13% in the second quarter compared to 2019.
It will take time, so this is not a quick fix. The first attempt to try to turn the situation around is going to happen later this year, Lacik added, adding that Pandora will announce further details on its brand repositioning in China at its capital markets day in September.
He raised its full-year sales and profit margin forecasts earlier this month as fewer stores would have to close due to COVID 19 than initially assumed.
On Tuesday, Pandora also announced a new share buyback programme, the latest European company to repurchase stock in the wake of a strong earnings season.