Pandora Shares Down by 65% in One Day

Pandora Jewelry Group must turn sharply down its growth expectations. Past promises of a growth in sales of at least 30 per cent is substituted by a zero growth rate.

“Our earnings expectations for 2011 have changed from previous guidance of revenue growth of no less than 30 per cent. And an EBITDA margin of at least 40 per cent. For 2011, with a turnover in 2011 on a par with 2010 and an EBITDA margin of the low end of the 30s, “according to the recently published interim report.

The message is to be an expensive day for shareholders. Before the stock exchange’s opening signified the share price as much as 30 percent. down. Whether it is to be believed will prove at 9.00. Yesterday, Tuesday August 2, the shares dropped by 65% on the Copenhagen Stock Exchange.

The interim report was scheduled to be published in August 16 but the dramatic downward revision and the departure of CEO Mikkel Vendelin Olesen has forwarded the publishing.

The downgrade comes after a weak second quarter in several key markets for Pandora Jewelry. USA, Pandora’s largest single market, achieved a turnover of 545 million. million in second quarter, a decrease of 0.7 percent. from the same quarter last year.

Europe taking a stand for a turnover of 483 million. kr – but it’s a drop of 11.9 percent. – Mainly dragged down by the downturn in Britain and Germany.

Price Increases

The Pandora board explains the new situation as a result of higher commodity prices, downsizing of inventories in the shops but also admits an inadequate execution of the sales and markting plans.

The interim report shows however an increase of 3.6 percent in sales in the second quarter to almost 1.4 billion Dkk. The total profit after tax was 626 million Dkk, an increase of 56 percent from the same period last year. On half yearly profits reached over 1.1 billion Dkk against DKK 671 million Dkk.

Pandora says in a recently published announcement that:

“Pandora has launched a strategic review in order to test or confirm the separate elements of corporate strategy”.

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