By Jacob Gronholt-Pedersen
COPENHAGEN (Reuters) - Jewellery maker Pandora (OTC:PANDY) on Tuesday reported disappointing second-quarter sales in the U.S. market, prompting its shares to fall, but reaffirmed its annual forecast, saying higher costs of living had not impacted jewellery buying.
Shares in Pandora, the world's largest mass-market jewellery brand with more than 6,400 stores worldwide, fell more than 7% after it said organic growth in the United States, its biggest market, was down 12% year-on-year in the quarter.
It said shrinkage in the U.S. market was due to the fading effect of coronavirus-related stimulus packages, which had boosted sales a year earlier.
"The United States has record low unemployment rates, salaries are going up quite a bit, and people have high savings, so there's plenty of disposable income still available," Chief Executive Alexander Lacik said in an interview.
Shares in Pandora traded 7.3% lower at 0810 GMT. The stock has shed almost 40% of its value since the start of the year.
Jewellery sales were not impacted by rising inflation, Lacik said. "When we look our core metrics such as store traffic, basket size and average selling price across the globe and across every sales channel, we simply cannot see any discernable impact of high inflation," he said.
He added that consumers are willing to accepts price rises for more expensive and refined pieces of jewellery, but that Pandora had so far kept prices for cheaper pieces mostly unchanged.
The world's largest jewellery maker by production capacity said traffic into its 219 Chinese stores fell 60% in the second quarter from a year earlier due to the impact of coronavirus-related shutdowns.
That prompted the company to postpone a planned revamp of its brand in that market until next year, Lacik said.
Second-quarter sales grew 10% to 5.66 billion Danish crowns ($773.33 million), compared to an average of 5.61 billion crowns expected by analysts in a poll conducted by the company.
Pandora still expects full-year organic growth of between 4% and 6% and reaffirmed an outlook for an operating profit margin at 25.0%-25.5%.
($1 = 7.3190 Danish crowns)