jwesth @jwesth: "𝙋𝙖𝙣𝙙𝙤𝙧𝙖'𝙨 𝙜𝙧𝙤𝙬𝙩𝙝 𝙟𝙤𝙪𝙧𝙣𝙚𝙮 𝙗𝙤𝙡𝙨𝙩𝙚𝙧𝙚𝙙 𝙗𝙮..."

United Kingdom

Edited

𝙋𝙖𝙣𝙙𝙤𝙧𝙖'𝙨 𝙜𝙧𝙤𝙬𝙩𝙝 𝙟𝙤𝙪𝙧𝙣𝙚𝙮 𝙗𝙤𝙡𝙨𝙩𝙚𝙧𝙚𝙙 𝙗𝙮 𝙨𝙚𝙘𝙤𝙣𝙙-𝙦𝙪𝙖𝙧𝙩𝙚𝙧 𝙧𝙚𝙨𝙪𝙡𝙩𝙨 💍 Jewellery giant $PNDORA.CO (Pandora A/S) has delivered second-quarter results, once again exceeding expectations with revenue of 13.6bn kr. and an operating profit of 2.8bn kr. in the first half of the year. 🤔 I was surprised to see the initial market reaction with the stock a few per cent down. However, some investors took that as an opportunity to buy the stock, and the price has now recovered. 📈 Pandora is a bit like the gift that keeps on giving. It's no surprise that they are once again raising their 2024 guidance. This follows the first upward revision just three months ago in connection with the first quarterly results and last year, which saw three upward revisions. 🎁 Pandora now expects 9-12% organic revenue growth, up from the previous 8-10% and somewhat stronger than this year's original 6-9%. Management now expects full-year revenue to reach approximately 30.4 to 31.3bn kr. and operating income to hit 7.6 to 7.8bn kr. 🛍️ With a strong 16% revenue growth in the first half of the year, they are already well on their way. However, the second half of the year has a more challenging comparison base, and the all-important fourth quarter with the crucial Christmas sales, which account for around 38% of the year's sales, is still ahead of them. 💪 While today's result supports the share price, which is already up 11% this year, we shouldn't expect a repeat of the insane share price increases of 2023, when the share price rose by over 90% during the year. 2️⃣ Two ingredients were available in 2023, while only one is present this year. Last year, the share price got a tailwind from i) a series of strong results and upward guidance revisions through 2023. ii) Not least a 'recalibration' of the valuation. 📊 Pandora entered 2023 with an unusually modest valuation with a Price/Earnings multiple of around 9x. With the wild share price increases in 2023 running much faster than the underlying earnings growth, the jewellery maker's valuation is now 'normalised' but still not stretched with a Price/Earnings multiple of 15x. This still compares favourably with other jewellery brands such as $CFR.ZU (Compagnie Financiere Richemont SA) (19x), $UHR.ZU (The Swatch Group SA - B Shares) Group (16x) and luxury conglomerate $MC.PA (LVMH Moet Hennessy Louis Vuitton SA) (20x). 👩‍💼 This means that earnings growth should be the driving force for the share price from here. At Pandora's Capital Markets Day, management presented the strategic long-term sales and earnings targets. They are aiming for average annual revenue growth of 7-9%until 2026 and an improvement of the operating margin from the current 25% to 26-27%. 💡 With today's results, they are more than on track to deliver revenue growth, and the question is whether they will be able to strengthen their already solid operating margin. $MC (Moelis & Company) $CDI.PA (Christian Dior) $KER.PA (Kering SA) $RMS.PA (Hermes International) $MONC.MI (Moncler)

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