Pandora, the world’s largest jewellery maker, has raised its full-year organic growth forecast for 2024, following strong sales in the second quarter and positive performance in its lab-grown diamond category.
The Danish jeweller now expects growth of between 9% and 12%, up from its previous guidance of 8% to 10%, as a result of its transformation strategy.
Q2 Performance and Key Metrics
For the second quarter ending 30 June, Pandora reported a 15% year-on-year increase in sales on both an organic and reported basis, bringing in DKK 6.77 billion ($990.9 million). Operating profit rose to DKK 1.34 billion ($196.25 million), up from DKK 1.19 billion a year earlier. This performance was in line with company expectations, as Pandora continues to maintain its operating margin guidance at around 25%.
Pandora’s CEO, Alexander Lacik, commented on the company’s performance, stating: “Our strategy continues to take Pandora to new heights despite general consumer spending being somewhat sluggish. We have successfully started the journey to make Pandora known as a full jewellery brand, and our results show that consumers like what they see.”
Lab-Grown Diamonds Driving Growth
A key driver of Pandora’s growth in the second quarter was the significant rise in sales of its lab-grown diamond jewellery. The Pandora Lab-Grown Diamonds collection saw like-for-like growth of 88%, contributing to what the company described as a “halo effect” that boosted sales across other jewellery categories. The popularity of this collection has been supported by targeted marketing efforts, including the creation of a bespoke jewellery set, featuring 200 carats of white and pink synthetic diamonds, worn by brand ambassador Pamela Anderson at the Met Gala.
Pandora noted that its presence in the lab-grown diamond segment has positively influenced sales across other collections, with consumer consideration of Pandora’s entire jewellery offering increasing. The jeweller’s lab-grown diamond category has become an integral part of its strategy to position itself as a comprehensive jewellery brand rather than just a provider of charm bracelets.
Expansion of Product Range
Pandora’s transformation strategy has involved substantial investment in expanding its product portfolio beyond its iconic charm bracelets, which continue to account for a significant portion of sales. Recent efforts include the launch of the Pandora Essence collection, featuring cultured pearls and generating DKK 172 million ($25.2 million) in Q2. This product diversification is part of the company’s long-term vision to expand its product range and appeal to a broader customer base.
In addition to new product lines, Pandora has invested in expanding its retail footprint and increasing marketing spend, driving traffic to its stores. Lacik added: “We are again raising revenue guidance for 2024 and look to the second half of the year with optimism.”
Outlook for the Rest of 2024
Looking ahead, Pandora remains optimistic about its performance for the remainder of 2024, despite global economic uncertainty. The company expects continued growth in traffic and sales, supported by the increasing popularity of its newer product categories and the ongoing appeal of its transformation strategy. This suggests that consumers remain willing to spend on diverse jewellery offerings, even in a challenging economic climate.
As the demand for lab-grown diamonds continues to rise, jewellers across the industry may need to adapt to these shifting consumer preferences, integrating similar products into their own collections to capture market share.
Implications for the Jewellery Industry
Pandora’s strong financial performance and increased sales outlook come at a time when many luxury and consumer goods companies are facing challenges due to softening consumer demand and pricing pressures. Competitors such as LVMH and Burberry have reported disappointing sales. However, Pandora’s strategic shift towards lab-grown diamonds and a diversified product offering has allowed it to maintain strong performance.
