Pandora is the latest retailer to issue a grim trading statement this week, revealing that like-for-like sales in China have fallen by more than 70% since late January.
In light of the coronavirus pandemic that is bringing countries around the world to a halt, the Danish jeweler has withdrawn its financial guidance for the year.
This is despite seeing a ‘strong’ financial performance in January and February, particularly in the online channel and in some key markets like Italy. Like-for-like sales excluding China were better than expectations for the full year, the company said.
But European markets have been visibly impacted since late February. In Italy, trading has now come to a complete halt, and Australia is suffering due to a decline in tourism.
“Most other markets are now indirectly impacted through a general dampening of consumer sentiment. In the markets affected by lockdowns and other governmental measures, revenue is expected to be negligible while these circumstances prevail. The timing and pattern of the return to normalized business is obviously subject to uncertainty and outside the control of Pandora,” the brand said in a statement.
Costs are being managed to protect profits, and Pandora insisted on profits for the first quarter of the year will be ‘strong’ despite the impact of Covid-19. The company also reassured investors that it can survive “several months of suppressed traffic” and still be profitable for the full year.
“Combined with a conservative capital structure policy, light funding covenants and healthy funding availability, Pandora has a strong financial position to manage through this downturn period,” it said.
A planned treasury share buyback has been halted for the time being and all Pandora stores and offices will close in line with official guidelines.