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Pandora's 3Q Revenue +26%, Profit +61% to $110M

Nov 12, 2013 3:43 PM   By Jeff Miller
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RAPAPORT... Pandora's revenue improved 25.7 percent year on year to $406 million (DKK 2.255 billion) for the third quarter that ended on September 30. Profit surged 61 percent to $110 million (DKK 612 million). Gross margin rose to 66.2 percent compared with 64.1 percent one year earlier. Pandora dramatically improved free cash flow to $65 million (DKK 363 million) compared with a deficit of DKK 88 million.

The jeweler reduced inventory by 16.6 percent to $289 million (DKK 1.603 billion). Pandora jewelry

While strong all around, the level of growth was uneven across Pandora's geographies with sales increasing only 7.6 percent year on year to $178 million (DKK 990 million) in the Americas, but they skyrocketed 46.5 percent to $185 million (DKK 1.024 billion) in Europe and gained 37.7 percent in the Asia-Pacific region at $43 million (DKK 241 million).

During the quarter, revenue from Pandora's charms increased 9.4 percent, while sales of silver and gold charm bracelets increased 31.6 percent. Those two categories represented 78.5 percent of total revenue. Sales of rings jumped 31.8 percent, driven primarily by the brand's improved offerings, according to the firm.

Pandora's CEO, Allan Leighton, said, “We are pleased with the third-quarter results, which confirms that the business has reestablished a base platform to build from. Third quarter was also the last quarter with the easy comparative figures created by last years’ stock balancing program. This obviously means that we are now entering a phase with more modest headline growth, but still underpinned by strong operating performance.”

Nonetheless, Pandora anticipates fiscal-year sales will increase by 30 percent to $1.5 billion (DKK 8.6 billion) and it increased guidance on the number of new store openings this year to 195 from 175.

In other news, Pandora acquired City Time Brazil, Comércio e Importação Ltda., in October, which was primarily related to the distribution rights for Pandora's jewelry in Brazil. The deal included fixed assets, cash and inventory related to nine concept stores and an ecommerce channel. City Time Brazil’s revenue for the first seven months of 2013 amounted to $8.3 million (EUR 6.2 million), according to Pandora, which did not exceed the purchase price.


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Tags: brazil, cash flow, inventory, Jeff Miller, Jewelry, margin, Pandora, profit
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