Pandora’s U.S. sales dropped 10 percent in the first quarter of 2017, the latest victim of the tough retail environment and a drop in mall traffic.
This follows a 6 percent drop in U.S. sales in the fourth quarter.
The results were hurt by the closing of 600 points-of-sale in the fourth quarter of the year. Excluding those closings, and a one-off shipment to Jared in last year’s first quarter, U.S. results would have come in flat.
But Pandora’s concept stores also posted weak numbers, with comps dropping 3 percent, though its U.S. “eSTORE” did well, the company said.
“The mall traffic in the U.S. continues to be weak and impact performance,” said CEO Anders Colding Friis in a conference call announcing its financial results. “We do not expect the U.S. market to miraculously improve over the next couple of quarters. I think that environment we are working in now is probably also going to be the environment for the quarters to come.”
But Friis added the company has a “healthy and profitable [store] network” in the United States and there is no current risk of store closings.
He also felt that recent promotions have not been attractive enough.
“In the U.S. market…we have people coming into our stores, asking ‘What’s on promotion?’ and if there’s nothing’s on promotion, they leave again,” Friis said. “So that is the environment we are looking at in the U.S.”
He added that it needed more novelty in its Valentine’s Day offering.
“There is a need for novelty,” Friis said. “People go into the stores and ask, ‘What’s new?'”
It also hopes to further merge its Pandora.net consumer website with its eSTORE.
The mixed U.S. results didn’t put a damper on what were generally positive first-quarter results for the company. Total revenue for the first quarter was DKK 5.159 billion, a 9 percent increase over last year.
(Image courtesy of Pandora)