Danish jeweler Pandora A/S said Tuesday that its turnaround program was starting to yield results as it reported better-than-expected fourth-quarter net profit and pledged to return 3 billion Danish kroner ($444 million) to shareholders this year.
Net profit in the quarter fell 7.9% to DKK1.74 billion from DKK1.89 billion in the same period a year earlier, beating a FactSet analyst poll that had seen net profit of DKK1.56 billion.
Revenue rose 0.8% to DKK7.96 billion, against expectations for DKK7.81 billion.
The company PNDORA, -3.66% , which sells charm bracelets, rings and earrings at around 7,400 locations worldwide, upgraded its cost reduction target to DKK1.4 billion from DKK1.3 billion by the end of 2020.
“Consumers are responding positively to our commercial initiatives,” said Chief Executive Alexander Lacik.
“In 2020, we will continue to invest significantly to drive the topline, strengthen our organisational capabilities and pursue further cost reductions to fund our growth initiatives. Our priority remains to do what is right for the company in the long-term.”
Pandora expects negative like-for-like revenue growth in 2020 at a mid-single-digit rate as a result of further reduction of promotional discounting activity, expected weak underlying performance in China and an underlying performance improvement in the majority of the other markets.
Net store openings/closings and inventory changes are expected to have a negligible impact on revenue, it said.
Organic revenue growth is seen at negative 3% to negative 6%. The Ebit margin excluding restructuring costs is expected to be above 23%.
However, Pandora said the financial guidance does not include any impact from the coronavirus.
The board proposed a maintained full-year ordinary dividend of DKK9 a share and a share buyback program of up to DKK2.1 billion.