By Jacob Gronholt-Pedersen
COPENHAGEN (Reuters) - Jewellery maker Pandora on Tuesday announced a push for growth in the United States and China, and potential expansion into new areas such as watches and bags, after posting forecast-beating first-quarter operating profit.
Strong online sales and the impact of stimulus packages in the United States helped lift operating profit more than four-fold to 903 million crowns ($146.2 million) between January and March, versus 833 million crowns forecast in a company-compiled poll.
Pandora's new strategy aims to strengthen its brand in key markets, particularly the world's two biggest economies, and over time to potentially extend into other product categories, Chief Executive Alexander Lacik told Reuters in an interview.
"We see untapped opportunities in the United States and China, where our brand penetration is still very low," Lacik said. "We see good opportunities to grow (there), rather than expanding into new geographies."
"For now we will stay firmly within the jewellery segment," he added, saying he sees potential for further growth in charms and bracelets, which account for some 70% of its business. "But in the longer term, we are looking at other avenues of growth."
That could include expanding its accessories offering under the Pandora brand, or bringing in other brands, he said.
The company, best known for its silver charm bracelets, said 30% of its 2,700 stores worldwide were closed during the first three months of the year due to coronavirus-led lockdown measures.
"We have had a good start to 2021, not least considering that many of our stores have been closed," Lacik said.
Around one in five stores are currently shut, but the company lifted its full-year sales and profit outlook on Monday on expectations of a faster reopening.
Pandora shares, which have risen three-fold over the past year, traded 5% higher at opening.
The group's sales increased more than 10-fold in the decade to 2017 after it found a niche between the cheaper accessories available in stores such as H&M and the more expensive jewellery on offer from the likes of Tiffany & Co (NYSE:TIF).
But it suffered a major setback as a lack of innovation and overstretching itself at the top and bottom of the market kept both shoppers and investors at bay.
Since joining Pandora in early 2019, Lacik has cut costs and pushed e-commerce.
Pandora, which sells three pieces of jewellery every second, also said on Tuesday it will stop selling mined diamonds and focus on more affordable, sustainable, lab-grown gems.
($1 = 6.1775 Danish crowns)