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The third quarter of 2018 was unsatisfactory and Group revenue decreased 3% in local currency due to timing of shipments, change of inventory levels in the wholesale channel and negative total like-for-like. Due to the unsatisfactory Q3 2018 performance, a lower than expected tailwind from forward integration as well as a weak start to the fourth quarter, full year revenue growth is now expected to be 2-4% in local currency (previously 4-7%), while the EBITDA margin guidance is unchanged at around 32%.

Following a health check of the business, PANDORA has launched Programme NOW. As a first step in the programme, acquisitions of franchisees will be significantly reduced. PANDORA will also open fewer stores focusing on selected key markets with white space areas. Programme NOW will focus on pursuing cost opportunities, reducing working capital, reigniting sustainable like-for-like driven revenue growth and lifting PANDORA to the next level of maturity, operating as a much more unified global company.

The Board of Directors of PANDORA continues the search for a new CEO and new non-executive board members and is encouraged by the progress of the searches.


  • In Q3 2018, group revenue decreased 3% in local currency
    • Total like-for-like sales-out growth was -3% (-1% in Q2 2018 and -3% in H1 2018)
  • Revenue from PANDORA owned retail increased 34% in local currency of which 33 percentage points is related to forward integration and new store openings
    • Retail like-for-like sales-out growth was 1% (3% in Q2 2018)
    • Revenue from the eSTORE increased 52% in local currency and was 8% of revenue, up from 5% in Q3 2017
  • Revenue from wholesale decreased 27% in local currency
    • The wholesale channel was significantly impacted by timing of shipments and change of inventory levels in the channel
  • Gross margin was 72.3% in Q3 2018 (74.2% in Q3 2017)
  • EBITDA was DKK 1,445 million in Q3 2018 (DKK 1,965 million in Q3 2017), corresponding to an EBITDA margin of 29.0% (37.8% in Q3 2017)
    • The lower EBITDA margin was driven by several one-off factors, including timing of shipments and change of inventory levels in the wholesale channel
  • Free cash flow was DKK 1,059 million in Q3 2018 (DKK 637 million in Q3 2017)
    • The increase compared with Q3 2017 was mainly driven by fluctuations in operating working capital
  • In Q3 2018, PANDORA returned DKK 0.9 billion to shareholders in share buybacks and DKK 1 billion in dividends
  • Full year revenue growth is expected to be 2-4% in local currency. The EBITDA margin guidance is unchanged
  • As a consequence of initiatives related to Programme NOW, PANDORA cancels the long-term revenue growth ambitions of 7-10%, while the long-term EBITDA margin target of around 35% is being reviewed

Commenting on the results, Anders Boyer, CFO of PANDORA, said:


he third quarter results were unsatisfactory and we adjust our full year guidance


We have reviewed our business and decided to launch a forceful programme with the aim to materially reduce costs across the company

to free up resources to invest in sustainable like-for-like growth


At the same time, we have to lift PANDORA to the next level of maturity operating as a more unified global company. We have taken the first major step in the programme today by changing our

network expansion plan. We have confidence in a strong future for PANDORA and will use 2018 and 2019 to re-set the business.


The new leadership of PANDORA has undertaken a health check of the business. PANDORA continues to have a strong and superior business model including a leading brand position, global retail footprint, excellent creative and innovation capabilities, and an unrivalled production set-up with high craftmanship, low cost and flexibility.

But the health check also shows that there is a need to change how PANDORA operates and that there are significant unexploited opportunities to improve efficiency. Looking ahead, PANDORA is moving into its next phase of maturity. 

Against this backdrop, the following priorities have been identified:

  • There is a need to redirect strategic focus towards driving like-for-like growth rather than total growth. There is also a need to pursue further initiatives to drive like-for-like growth
  • Continued success requires more disciplined execution in all parts of the value chain as well as much closer coordination across the company. This implies for example a different cost efficiency and capital allocation mindset and a significant change in retail execution excellence

In order to act swiftly on these conclusions, PANDORA has commenced Programme NOW.



As a first step in the programme, PANDORA is adjusting its network expansion plans. With negative like-for-like growth in the physical stores, acquisitions of franchise stores are becoming less attractive. Furthermore, with significant growth in the eSTORE, PANDORA will focus on developing omni-channel in well-developed markets and open fewer new stores, focusing on markets with white space. 

  • Acquisitions
    • A few selected franchisees may still be acquired. For example, if the stores are of strategic/tactical importance; and if financials and multiples meet strict criteria
    • Consequently, incremental revenue from forward integration is expected to be significantly lower than the previously communicated DKK 500-1,000 million annually
  • Store openings
    • New stores opened are very profitable
    • The majority of future store openings will take place in a few selected markets with white space. These markets include among others China, India and Latin America
    • Net store openings during 2018-2022 are expected to be lower than the current guidance of 1,000 stores in total (of which around 250 stores are still expected to be opened in 2018). The number of net store openings will also be impacted by more store closings going forward as the eSTORE grows
    • PANDORA will guide on the expected number of store openings on a year by year basis going forward
  • The revised network expansion strategy has impacted the expected FY 2018 tailwind from forward integration from DKK 1.4 billion to DKK 1.2 billion, equivalent to 1 percentage point of growth for FY 2018. In 2019, acquisitions made in 2018 and stores opened during 2018 are expected to generate additional revenue of close to DKK 1 billion.


  • Cost reductions: PANDORA has made an initial review of all cost categories and identified significant opportunities to reduce costs in several categories. It is also possible to reduce costs by acting more as one globally unified company. These cost reductions are in addition to the DKK ~350 million in annual cost savings announced in August 2018. The cost reduction potential will be quantified in connection with the full year announcement in February 2019

  • Like-for-like growth: Investigation into further initiatives to support like-for-like growth are currently conducted. The initiatives include enhanced marketing, personalisation, digital and eCommerce capabilities as well as improving the consumer experience in the physical stores. Early analysis also shows that product promotions and mark-downs have a role, but can be reduced through a structured, data-driven approach with little or no impact on long-term profitable growth

  • One global company: PANDORA needs to revisit how and where decisions are made, how the company operates and lift capabilities in a number of important areas.

Programme NOW will be further developed, and PANDORA will provide a detailed update in connection with the full year announcement in February 2019.

Programme NOW is not expected to impact PANDORA’s ability to be highly cash generative and return significant cash to the Company’s shareholders.


At the Capital Markets Day in January 2018, PANDORA presented an ambition to grow revenue annually by 7-10% in local currency and maintain an EBITDA margin of around 35% in the years 2018-2022.

As a consequence of the reduction in acquisitions and network expansion, PANDORA sees a lower but more sustainable growth going forward driven by a) low to mid-single digit like-for-like in the mid-term, b) concept store openings in selected key markets and c) potentially selected franchise store acquisitions.

In 2019 and potentially into 2020, growth is expected to be impacted by a planned reduction of promotions and mark-downs as well as a continued reduction of inventories in the wholesale channel. The planned reduction of promotions and mark-downs is expected to have a negative impact on both revenue and total like-for-like in the short term, while it is expected to be margin neutral on group level.

In connection with the Q2 2018 announcement in August, PANDORA stated that a 35% EBITDA margin is attainable assuming positive total like-for-like growth. Since August, further significant margin supporting initiatives have been identified but it has also become clear that like-for-like growth remains under pressure and further investments in driving like-for-like growth are necessary. Additional analysis of the cost reduction potential and the required investments to drive sustainable like-for-like are necessary and as part hereof PANDORA is reviewing the ambition to reach an annual EBITDA margin of 35% during 2019-2022.

Financial guidance for 2019 will be provided in connection with the full year announcement in February 2019.


PANDORA adjusts full year revenue growth expectations to 2-4% in local currency (from previously guided 4-7%). The adjustment is as a result of three factors. 1) The weaker than expected development in Q3 2018, which was mainly driven by changes in inventory levels in the wholesale channel. 2) A difficult start to the fourth quarter with total like-for-like growth in October well below 9M 2018, which delivered -3%. 3) The adjustment of the network expansion plans outlined above, will have an impact on revenue already in 2018. PANDORA now expects a full year impact on revenue of around DKK 1.2 billion in 2018 (previously around DKK 1.4 billion) from forward integration. 

The EBITDA margin is still expected to be approximately 32%, due to the already implemented cost savings as well as a very strong cost focus across markets and functions.




New guidance


Previous guidance



Revenue, local currency growth 2-4% 4-7% 15%
EBITDA marginApprox. 32%Approx. 32%37.3%
CAPEX, % of revenueApprox.  5%Approx.  5%6.1%



PANDORA still expects to add around net 250 concept stores during 2018 of which roughly 50% are expected to be opened in EMEA, 25% in Americas and 25% in Asia Pacific. PANDORA expects two-thirds of the concept store openings to be PANDORA owned stores. Furthermore, PANDORA now expects a full year impact on revenue of around DKK 1.2 billion (previously around DKK 1.4 billion) from the full year effect from forward integration.

Assuming current exchange rates versus the Danish Krone, full year growth reported in DKK is expected to be around 2 percentage points lower than in local currency.

Expectations are based on the foreign exchange rates at the time of the announcement.


A conference call for investors and financial analysts will be held today at 11.00 CET and can be joined online at www.pandoragroup.com. The presentation for the call will be available on the website one hour before the call.

The following numbers can be used by investors and analysts:

DK: +45 35 44 55 83

UK (International): +44 (0) 203 194 0544

US: +1 855 269 2604


Going forward, the Annual reports as well as interim financial announcements will only be provided in English. This will start from the Annual Report 2018.


PANDORA designs, manufactures and markets hand-finished and contemporary jewellery made from high-quality materials at affordable prices. PANDORA jewellery is sold in more than 100 countries on six continents through more than 7,700 points of sale, including more than 2,600 concept stores.

Founded in 1982 and headquartered in Copenhagen, Denmark, PANDORA employs more than 27,700 people worldwide of whom more than 14,000 are located in Thailand, where the Company manufactures its jewellery. PANDORA is publicly listed on the Nasdaq Copenhagen stock exchange in Denmark. In 2017, PANDORA’s total revenue was DKK 22.8 billion (approximately EUR 3.1 billion).


For more information, please contact:


Brian Granberg

Senior Investor Relations Officer

+45 7219 5344



Christian Møller

Investor Relations Officer

+45 7219 5361






Johan Melchior

Director External Relations

+45 4060 1415



Mads Twomey-Madsen

Vice President, Corporate Communications & Sustainability

+45 2510 0403




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