Jewellery sales top pre-pandemic levels as shoppers splash out

Danish jewellery maker 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 world’s two biggest economies, said its total comparable sales in April-June jumped 7% compared to the same quarter of 2019 before the pandemic.

In the United States quarterly sales more than doubled from 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 cautioned that the high growth would come down in the second half of the year.

“We have dampened the expectations on the U.S. growth versus the first half and then we have raised expectations in Europe when the stores reopen and we are seeing that play out,” Chief Executive Alexander Lacik told Reuters in an interview.

Pandora’s shares, which have gained around 25% this year, fell around 1% in early trade.

“The questions arise for how long growth in the U.S. operation can offset 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 this around is going to happen later this year,” Lacik said, adding that Pandora would announce further details on its brand repositioning in China at its capital markets day in September.

Pandora earlier this month raised its full-year sales and profit margin forecasts 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.