U.S. sales of Pandora’s charms and jewelry grew about 2 percent last fiscal year in dollar terms, with sales rising online but falling at physical stores, according to the charm maker’s annual report.

The sales growth “was driven by network expansion and a strong performance in the [online channel],” said chief financial officer Peter Vekslund in an investor presentation following the result of its financial results.

Added CEO Anders Colding Friis in the investor presentation, “The retail market in the U.S. is difficult. We expect that to continue.”

Its U.S. physical store network, including its franchise stores, “continued to experience negative like-for-like performance,” the company said.

But Friis added he sees opportunities for growth if Pandora continues to introduce new product in the market. He also sees online as a possible avenue for growth. He noted that the company’s eStore now comprises 10 percent of the company’s revenue in the United States.

The charm company also expects to increase its store network by about 200 concept stores— one-quarter of those will be located in the Americas. Pandora expects about two-thirds of the new stores will be company-owned concept stores, part of its plan to increase its owned-and-operated retail footprint. It also plans to continue to acquire franchise stores in 2018.

Overall, Pandora’s total revenue for fiscal year 2017 equaled 22.8 billion Danish kroner (which converts to approximately $3.78 billion), a 15 percent increase in local currency. EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 7 percent to 8.5 billion Danish kroner.

Over the next year, Pandora will initiate a share buyback program to a maximum consideration of 4 billion Danish kroner. Its board proposes to return 2 billion Danish kroner in dividend in 2018.

Read additional JCK coverage of Pandora here and here.

Rob Bates

JCK News Director