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Investing.com -- Pandora (OTC:PANDY)’s (CSE:PNDORA) stock fell more than 3% on Wednesday following its FY25E guidance, which came in slightly softer than expected.
Analysts at RBC Capital Markets noted that while the Danish jewelry retailer’s fourth-quarter results were largely in line with consensus, the guidance for the upcoming year showed some signs of caution.
In its fourth-quarter earnings, Pandora reported revenues of DKK 11.97 billion, marking an 11% organic growth, slightly above the 10% consensus estimate.
Like-for-like sales were also in line with expectations, growing by 6%. However, the company’s gross margin of 79.8% fell just short of the consensus forecast of 80.1%.
Despite the margin pressure, Pandora managed to offset a 90 basis point headwind from currency fluctuations, with EBIT coming in at DKK 4.15 billion, representing a 34.6% margin, which was 1% ahead of consensus.
Nevertheless, earnings per share of DKK 35.5 were slightly below expectations, reflecting higher interest expenses.
Pandora is targeting organic revenue growth of 7-8% for FY25E, with a retail LFL growth of 4-5%. This guidance was softer than the consensus expectation of 9% organic growth and a 24.7% EBIT margin.
The company also provided a more conservative EBIT margin target for FY26E, now expecting to land at the lower end of the 26-27% range.
This revised forecast reflects an anticipated 270 basis points of headwinds from commodities and foreign exchange, though Pandora is planning to mitigate the impact with cost-saving actions, which should help offset roughly 140 basis points of this pressure.
Despite the softer guidance, there was a brighter note in Pandora’s current trading performance. The company reported that its LFL sales for the first quarter of 2025 are running at high-single-digit levels, above the consensus estimate of 5%.
Pandora also announced a new share buyback program of DKK 4.0 billion, to be completed by the end of January 2026, in line with the company’s ongoing capital returns policy.
Additionally, a dividend of DKK 20 per share was declared, which was in line with consensus expectations.