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Pandora shares drop after weak guidance

FILE PHOTO: A general view of the Pandora shop in Riga, Latvia Febuary 4, 2020. REUTERS/Ints Kalnins/File Photo

COPENHAGEN (Reuters) - Shares in Pandora fell 7% on Tuesday after the jewellery maker said it expected sales to decline this year by up to one-fifth, despite having reopened nearly all its stores.

Pandora said late on Monday it expected stronger sales in the second half of the year compared with the first six months, despite having to close some shops in August due to new coronavirus lockdown measures.

The world’s biggest jewellery maker also reinstated its full-year guidance, saying it expects organic growth this year at minus 14%-20% and earnings before interest and taxes (EBIT) margin excluding restructuring costs at 16%-19% this year.

Shares in Pandora were trading 6.8% lower at 0726 GMT, after hitting a fell hit a two-year high on Friday.

“We think this release might come below the growingly bullish expectations that were anticipating a faster pace of recovery,” analysts at JPMorgan said in a note.

Some analysts warned in March the coronavirus crisis could be a threat to the company’s efforts to revive its fortunes.

But with consumers returning to shops faster than expected, Pandora’s shares have more than doubled in value since mid-March. However, they still remain at half their value of 2016.

Reporting by Jacob Gronholt-Pedersen; editing by David Evans