While the Danish jewellery company rebounded globally in Q3 2012 to record an 11.4 per cent net profit increase ($A62.6 million), revenue in Australia was still lagging, down 13 per cent from 2011 Q3 figures. And revenue in the Asia-Pacific region fell by 17.3 per cent (year-on-year) in local currency terms.
Globally, however, the company has performed better in the past quarter than it did in Q2 (where it reported its sales had fallen by 9.5 per cent to $A202 million with profit during the same period down 89.9 per cent to $10.1 million). The company trended upwards in most geographical regions.
Pandora CEO Björn Gulden has stated that the company’s stock-balancing plan – where the company replaces discontinued stock – is still on track. In Q3, products totalling around $14 million were replaced with stock with a wholesale value of $21 million.
Guldenhas continued: “I am happy to report that we continue to perform in line with our ‘18 months turn-around plan’. Third quarter developed even a little better than we expected and we have, based on the tailwind from the currency development, decided to slightly upgrade our revenue guidance.
“One of our major initiatives, ‘The stock balancing campaign’, was continued, mainly impacting the US and third party distribution, during Q3 2012. We have now largely concluded the campaign and it will, as communicated earlier, be finished by end of 2012,” he said.
Pandora Australia president David Allen reiterated the global CEO’s comments telling Jeweller: “Our results for Q3 did not follow on from our Q2 performance – our result is in line with our expectations.
“Our commitment to strengthening our relationship with our multi-branded partners, and ensuring that our franchise partners receive the best possible levels of service from us continue to be our focus, it is a balanced approach,” he said.
Allen explained the company’s stock-balancing program, completed earlier in the year had continued to benefit partners through Q3 and the like-for-like performance of Pandora-branded concept stores in Q3 was “stronger than it had been in Q1 and Q2 of this year.”
“In 2011, we released our collections for the season in one drop. In Q3 this year, we made the conscious decision to release our seasonal collections in two distinct drops: one release was for September and the other was for November, spreading our revenue across Q3 and Q4.
“This was absolutely the right decision to make for our partners and our later drop (A Night Time Fable), which launched early November, has given our partners fresh new exciting product for their consumers as we move into the Christmas trading period,” Allen said.
Revenue by geographic region:
- Americas increased by 21.9 per cent (9.5 per cent in local currency), with US sales up
- 15.8 per cent (2.6 per cent in local currency);
- Europe increased by 13.1 per cent (11 per cent in local currency);
- Asia Pacific decreased by 10.7 per cent (17.3 per cent in local currency).
Branded revenue (as percentage of total revenue) increased to 81.3 per cent, compared with 73.6 per cent in third quarter of 2011. But gross margin was 64.1 per cent, compared with 73.6 per cent in the third quarter of 2011.
Gulden believed the company’s spring merchandise had sold well and its fall merchandise had experienced a strong start in the third quarter.
“The year is not yet finished,” he said, adding. “We have our most important quarter to come, but we feel confident that our improved product, our lower prices and our other operational improvements will put us in the position of achieving our updated financial goals for the full year.”