U.S. jewelry sales continue to be strong! Pandora benefits from stimulating consumption Quarterly sales will still rise, shares will rise more than 4%

FX168 Financial Newspaper (North America) - The CEO of Pandora, the world's largest jewelry manufacturer, said on Wednesday (November 3) that jewelry sales in the United States have maintained a strong pace, thanks to the stimulus checks policy announced by former US President Trump. Pandora's shares rose on Wednesday, up 4.22 percent at 864.00 at 11:52 a.m.

President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act on March 27, the $2 trillion stimulus package, the largest emergency relief bill in U.S. history, directly to many Americans with a one-time check for up to $1,200 in a single payment.

Pandora stock fell sharply on Monday as the company said third-quarter physical store sales were lower than expected. The world's largest jewelry maker, which has about 570 stores in the U.S., raised its full-year outlook on strong U.S. sales, but its shares fell 4.8 percent in early trading on Monday morning as sales at Pandora stores rose just 5 percent in the third quarter, compared with analysts expecting a 14 percent increase.

Per Fogh, an analyst at Sydbank, said: "Pandora's sales growth in the third quarter was a bit disappointing. ”

Pandora's stock price has surged 40 percent this year because the company's sales have surpassed pre-pandemic levels since the U.S. lockdown was unlocked. Pandora continued to see strong sales performance in the U.S. market in the third quarter as massive stimulus measures from the U.S. government and covid-19 vaccination stimulated consumption of goods and services.

For 2021, Pandora now expects sales growth of 18-20%, up from the previous forecast of 16-18%; the pre-tax margin is 24-24.5%, up from the previous forecast of 23-24%, but this is lower than the analyst average forecast compiled last month at 24.6%. Pandora will report full earnings for the third quarter on Wednesday.

Pandora CEO Alexander Lacik said jewelry sales in the U.S. remained at a strong pace even after the stimulus was halted. "It's no secret that this is largely driven by stimulant checks," he said.

Lacik said: "We had expected sales to cool down when stimulus checks stopped in September. So far, we haven't seen this cooling. He also added that credit card data shows Pandora is grabbing market share in the U.S. When growth will start to wane remains to be seen, but so far, sales remain strong.