As announced on 16 March 2020, the financial guidance for 2020 was withdrawn following the escalation of COVID-19. As a result of the continued high uncertainty, it was still not deemed meaningful to provide any financial guidance at this stage.
On 8 July 2020 it was announced that Pandora continues to consider the macroeconomic environment and future COVID-19 development as highly uncertain. The financial guidance for 2020 is consequently still suspended.
The current run-rate sell-out growth - assuming that there will be no further lockdowns of key markets - will lead to a positive and double-digit H2 2020 EBIT margin (excluding restructuring costs).
Based on the continued widespread lock-down of markets across the world, Pandora is likely to generate significant negative EBIT in Q2 2020.
Based on the assumption that the second quarter will be materially impacted by COVID-19 and that there will be a slow gradual improvement during the second half of 2020, Pandora can provide the following guidance:
- The restructuring costs related to Programme NOW are expected to amount to around DKK 1.0 billion compared to previous expectations of around DKK 1.3 billion. The restructuring costs relate to the strategic re-organisation, consultancy costs and costs of implementing cost reduction initiatives such as the IT transformation and manufacturing efficiencies
- CAPEX for the year is expected to be around DKK 0.7 billion compared to the initially expected amount of DKK 1.0-1.2 billion. The reduction is a result of deliberate actions to protect cash including a reduction of the number of expected store refurbishments
- The number of concept stores is expected to be reduced by 25-50 in 2020 compared to previous expectations of a flat development in the number of stores. The change is due to fewer planned store openings in China and Latin America due to COVID-19
The effective tax rate in 2020 is still expected to be 22-23%. Assuming current exchange rates versus Danish kroner, growth reported in DKK is expected to be 0-1pp higher than in local currency.
Mid-term financial aspirations
Pandora’s aspiration for the mid-term horizon is to deliver sustainable positive organic growth and industry-leading profitability. Organic growth will be driven by positive total like-for-like growth.