It is clear that the current coronavirus pandemic is taking a toll on businesses across the world and is expected to have a negative impact on the global economy. 

Keeping this in mind, Pandora announced “mitigating actions” under what it called “extraordinary and rapidly developing circumstances”.

“Financial performance was strong in January and February with particularly good development in the Online Store and in some key markets generating positive like-for-like,” Pandora stated. “Total like-for-like excluding China was better than the full-year financial guidance but the COVID-19 escalation has led to material weakness in sales across markets.”

Pandora said that In China, like-for-like has been between lower by 70% to 80% since late January. Though currently revenue is improving slightly, “a return to normal demand will expectedly take time and be outside the control of Pandora”, the Company stressed.

The Company noted that the European markets, particularly Italy, have been “visibly impacted” since late February. “Italy generated solid positive like-for-like in January and February, while trading in March has now almost come to a complete halt,” Pandora said summing up the situation in various territories. “Australia is impacted due to a decline in tourism and most other markets are now indirectly impacted through a general dampening of consumer sentiment.”

The Company noted that those markets where there are lock-downs, revenue “is expected to be negligible” till such time as the current circumstances prevail. “The timing and pattern of the return to normalised business is obviously subject to uncertainty and outside the control of Pandora,” the Company underlined.

As a result, the Company announced: “Pandora’s financial guidance announced on 4 February 2020 excluded any impact from COVID-19. As a consequence of the global escalation of the situation, the financial guidance for 2020 is no longer meaningful and hence now withdrawn.”

Meanwhile, Pandora is actively looking at managing cost levels, including spends on media, rent and other store costs, “to ensure an appropriate balance between protecting profits while continuing to drive revenue from the Online store and build on the underlying momentum of the brand”.

However, the Company is confident that despite the COVID-19 headwinds, profitability is expected to continue to be strong in Q1 2020. “The profitable and cash generative business model means that Pandora can absorb several months of suppressed traffic and still be profitable and cash generative for the full year,” the Company underlined. “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.”

The Company has also decided not to buy back any further treasury shares under the authorisation given at the 2020 Annual General Meeting, so that it can “preserve a strong balance sheet under these extraordinary circumstances”. 

The Company said that it would continue to monitor the development of COVID-19, and that the primary focus remains the well-being of employees and ensuring safe environments for customers. “Guidelines set by local authorities will be followed, and the company will temporarily close stores and offices as advised,” the Company assured all concerned. “Pandora’s manufacturing facilities in Thailand continue to run with stable supplies and currently without notable impact from the situation.”