COPENHAGEN, Denmark — The Danish charm bracelet seller’s shares fell as much as 12 percent after it cut its outlook, abandoned a long-term sales goal and said it’s still looking for a chief executive officer. Since hitting a peak two years ago on the back of a global expansion, the company has fallen to earth amid the rise of online shopping and cheap Chinese imitations, wiping almost $12 billion off its market value.
As Pandora seeks a new leader, successive profit warnings have undermined investor confidence, prompted hedge-funds to take aim at the stock and fueled takeover speculation. The company said it will try to “reset” its business by cutting costs, insisting that the absence of a CEO won’t hold it back.
Chief financial officer Anders Boyer said the latest results were “unsatisfactory.” Per Hansen, an investment economist at Nordnet in Copenhagen, was more blunt, describing them as “terrible.”
After at least two years of false starts in which the jeweller has been struggling with an increasingly challenging US retail environment, investors are losing faith. Pandora’s move to reposition itself in the so-called affordable luxury segment, during which it expanded to more than 2,500 stores in shopping malls around the world, has fallen flat. The market value, which rose to just shy of 120 billion kroner ($18 billion) after a more than 20-fold runup in the shares from 2011 through mid-2016, has plunged to about $6.1 billion.
Pandora “is facing an increasing number of issues which we now determine to be more structural than cyclical,” RBC analysts said in a note. “We do not see any immediate fixes to improve investor sentiment.”
The company last cut its outlook in August, which led to the dismissal of chief executive Anders Colding Friis. Chief financial Boyer and chief operating officer Jeremy Schwartz have jointly taken on the role of chief executive until a permanent replacement for Friis is found.
Boyer, who in an interview with Bloomberg Television ruled out becoming chief executive, said the absence of a permanent top executive isn’t hampering Pandora’s efforts to adjust its strategy. When asked to address speculation that Pandora might be taken over by a private equity firm, Boyer said he can’t comment on what he characterised as “rumours.”
Aside from cutting its outlook, Pandora also delivered a third quarter profit that fell short of analyst estimates. For investors and analysts, “it’s hard to know which numbers to put in their models,” Hansen said.
By Christian Wienberg with assistance from Hanna Hoikkala; editors: Tasneem Hanfi Brögger and Eric Pfanner.