Jewellery group Pandora has announced the withdrawal of its financial guidance as it is “no longer meaningful” in light of the coronavirus escalation.
The group said that such mitigating actions came under “extraordinary and rapidly developing” circumstances, and that its financial guidance announced on 4 February excluded “any impact” from Covid-19.
The recent escalation of the virus has already had a “material negative impact” on the global economy, it warned.
Its like-for-like sales in China were down between 70% and 80% since January due to the outbreak, and while revenue is “slightly improving”, a return to normal demand will “expectedly take time”, said the group.
While Italy generated “solid positive” like-for-like sales in January and February, trading in March has “now almost come to a complete halt” in the country. In other markets affected by lock-downs and other governmental measures, the group expects revenue to be “negligible while these circumstances prevail”.
It added that the “timing and pattern of the return to normalised business is obviously subject to uncertainty and outside the control of Pandora”.
Nonetheless, total like-for-like sales excluding China were better than the full-year financial guidance but the COVID-19 escalation has led to “material weakness” in sales across all markets.
The group is now “actively” managing cost levels, including media and rent, to ensure an “appropriate balance between protecting profits while continuing to drive revenue from the online store”.
In light of these “extraordinary circumstances”, Pandora announced it will also not buy back any further treasury shares under the authorisation given at the 2020 Annual General Meeting.
Despite the outbreak, profitability is expected to be “strong” in Q1 2020. The group assured that its cash generative business model will mean it can “absorb several months of suppressed traffic” and still be profitable for the full year.
It will continue to monitor the development of Covid-19, and will temporarily close stores and offices as advised. Its manufacturing facilities in Thailand continue to run with ”stable supplies” and “currently without notable impact from the situation”.