Pandora Jewelry's New Inventory Drives Sales

By Sam Lewis

Profits are also forecast to increase as the company continues rolling out new products

Pandora, the 950-location Denmark-based jewelry company made famous by its charm bracelets, is on a tear. Its share price has more than doubled since the beginning of the year, and the upward trend seems to be continuing. Fervent sales of new jewelry items over the last 2 months have allowed the company to raise its annual forecast in both revenue and profitability.

Change In Inventory And Production Model Proves Profitable

During the first three quarters of 2013, Pandora says its revenue has grown in every major region. This is great news for the company, as it suffered a major collapse in demand during the middle of 2012. This might have been due to the company heavily relying on a stale selection of products. Now, Pandora is keeping its inventory active and lively, releasing new items and collections, like its fall Enchanted Forest charms, seven times a year. This is a huge boost in production, as Pandora previously only released new items twice annually.

The company is now projecting revenue for 2013 to be about $8.6 billion kroner (1.6 billion USD), rising up from its previous 8 billion kroner (1.45 billion USD).  Pandora also estimates its margin on earnings, prior to taxes, interest, depreciation, and repayments, to be 30 percent. The jeweler previously estimated this guidance to be 27 percent. Pandora will report official third-quarter earnings on Nov 12.

For the quarter ending Sept 30, Pandora says revenue is up 26 percent from 2012, to 2.3 billion kroner (420 million USD). The company credits this strong performance to bolstered sales of new products, like the fall Enchanted Forest charms collection, as well as growth in new markets. In addition, the company has also raised its expectations of how many Pandora concept stores this year. Previously set at 175, the company believes a total of 195 new stores will open in 2013.