Jeweller Pandora shines with 2019 sales set to meet forecast

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COPENHAGEN (Reuters) - Pandora PNDORA.CO said preliminary results showed it would meet its 2019 sales and profit margin forecast, lifting its shares by 11% as investors welcomed signs that attempts to turn around the struggling jeweller could be starting to pay off.

In November, Pandora warned of a steeper-than-expected fall in 2019 sales, leaving investors fearing yet another profit warning after IT problems during the crucial Black Friday sales period in the United States.

On Monday it said it expected like-for-like sales to fall 4% in the fourth quarter and 8% in full-year 2019 when adjusted for exceptional circumstances in Hong Kong, where political unrest has led to store closures and hit sales.

Pandora also said it expects organic sales growth to be down 1% in the fourth quarter and 8% lower for the full year, compared to the 7-9% drop it had forecast for 2019.

The full-year EBIT (earnings before interest and tax) margin excluding restructuring costs is expected to be in the upper end of the 26-27% range previously indicated.

Shares in Pandora were trading 11.4% higher at 1450 GMT, with analysts from Sydbank and Jyske Bank citing improved like-for-like sales in the fourth quarter and the 2019 EBIT margin.

“The most important thing is that they now see the EBIT margin in the upper end of the guided range which is a surprise to the analysts, me included,” Sydbank analyst Per Fogh told Reuters, adding that he had expected a margin of around 25.5%.

Like-for-like sales are expected to remain negative next year, while the EBIT margin is expected to be lower than in 2019.

Pandora will release its full annual report on Feb 4.

Reporting by Stine Jacobsen; Additional reporting by Tommy Lund in Gdansk; Editing by Alexander Smith, Kirsten Donovan