Pandora: Reaction to Price Increase Mixed

Charm manufacturer Pandora said revenues were up in the first quarter of 2011,
although it admitted in a statement there was a mixed response to its recent
price increase.

The company’s financial statement reported that first-half
revenue increased by 41 percent to DKK 1,745 million  (about $333 million) in the first half of
this year, compared to DKK 1,238 million (about $236 million) for the same
period in 2010.  

Pandora’s
outlook for 2011
remains unchanged, with the company continuing to expect
30 percent revenue growth for the year.

Mikkel Vendelin Olesen, Pandora’s chief executive officer,
said in a statement: “We experienced strong underlying growth in the first
quarter and implemented price increases in most markets to balance the impact
of rising gold and silver prices.”

The company acknowledged that reaction to the price
increases has been “varied.”

“Whilst the overall feedback from customers and consumers
has been cautiously positive, in some markets we have seen a moderate slowdown
in the immediate aftermath of price increases,” it reported. “In general, there
is some impact on volumes in the two to four months following a price increase,
after which volumes gradually recover.”

The company stated that demand in the U.S. “continues to be
in line” with its prior performance.

However, some European markets have  “seen a more moderate development,” it wrote.
The company noted it “maintains its strong market position” in Australia, while
it considers its performance in Germany 
“not satisfactory” and added it has “taken steps managerially.”

The company is also expanding into Italy, Russia, China, and
Japan.

Other highlights of Pandora’s first quarter balance sheet
for the first quarter of 2011:

  • Net profit: Increased by 90.7 percent, to DKK 515 million
    (about $98 million)
  • Gross margin: Increased 71.6 percent
  • EBITDA: Increased by 49.6 percent to DKK 709 million
    (about $135 million)

More information on Pandora’s financial report is here.

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