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Earnings

Jewellery maker Pandora warns new lockdowns may hurt peak season sales

COPENHAGEN (Reuters) - Danish jewellery-maker Pandora PNDORA.CO said on Tuesday positive sales momentum in the third quarter had extended into October but new coronavirus lockdown measures created uncertainty about peak season sales and its full-year guidance.

FILE PHOTO: A general view of the Pandora shop in Riga, Latvia Febuary 4, 2020. REUTERS/Ints Kalnins

Pandora, the world’s biggest jewellery maker, saw positive sales momentum in the third quarter continue with like-for-like sales growing 8% in October, but said new lockdowns would force it to temporarily close at least 18% of its 2,700 shops worldwide in November.

“We have a very, very strong underlying sales momentum across markets,” Chief Executive Alexander Lacik told Reuters, adding that online sales continued to “perform extremely well.”

The number of customers visiting stores was about half compared to last year but fewer were window shopping, and the higher proportion of buyers offset the lower number of total visitors, Lacik said.

Pandora, best known for its customisable silver charm bracelets, last month revised full-year profit guidance upward.

But its organic sales growth forecast for the year in the range of minus 14% to minus 17%, and EBIT margin at between 17.5% and 19%, assumed less than 10% of its shops would be closed.

“From what we know now, we believe we can recoup enough volume in e-commerce to keep us within the boundaries of our guidance,” Lacik said, adding that it did not take into consideration the impact of possible store closures in key markets like Italy, Spain and the United States.

Pandora said third-quarter sales fell 8% to 4.07 billion Danish crowns ($637 million).

Earnings before interest and taxes (EBIT) excluding restructuring costs between July and September declined 21% to 702 million crowns, with EBIT margin at 17.2%.

Pandora’s shares, which have almost tripled in value since early March, were trading 2.4% higher at 0843 GMT.

($1 = 6.3881 Danish crowns)

Reporting by Jacob Gronholt-Pedersen; Editing by Shailesh Kuber and Edmund Blair

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