Pandora lifts financial targets ahead of increased business investments

Jewellery giant Pandora has raised its financial targets for the coming years as it continues to make investments into its brand, store network, organisation and people.

The funding comes as part of its ‘Phoenix’ strategy, which it launched in 2021 and has since yielded “clearly positive results” as it now looks to initiate the next chapter of the plan.

According to a release, this will revolve around scaling up investments to accelerate revenue growth, with the company further stating that it would deliver EBIT margin expansion and continue providing strong cash returns to shareholders.

In its updated financial targets, Pandora said it was now aiming to achieve an EBIT margin of between 26 and 27 percent by 2026, up from around 25 percent in 2023.

This means its revenue is now expected to reach DKK 34 to 36 billion (3.9 to 4.2 billion pounds) in 2026, up from its previous forecast of DKK 27 billion for 2023.

Pandora to reposition towards ‘affordable luxury space’

The company is also currently targeting organic growth of between 7 to 9 percent CAGR from 2023 to 2026, comprising 4 to 6 percent like-for-like growth and a network expansion of around 3 percent.

As part of this, Pandora is seeking to position itself in the “affordable luxury space”, a move it will back through increased investments in brand desirability alongside its store network.

Meanwhile, its asset-light business model is further expected to contribute to a free cash flow generation of around DKK 16 to 17 billion from 2024 to 2026, with the company aiming to return DKK 14 to 17 billion in cash to shareholders during the same period.

In a release, Alexander Lacik, president and CEO of Pandora, stated: “Looking back at the past few years, we are proud of our achievements. We have fundamentally changed how we work, and the organisation is much stronger.

“It’s clear that Pandora is a very different company today. This solid foundation combined with a proven strategy that will build Pandora into a full jewellery brand, now allow us to lift our growth target to 7-9 percent organic revenue CAGR.

“It’s time to take Phoenix to the next level and our new financial targets reflect our confidence in the future.”