Jewellery maker Pandora gets boost from lab-grown diamonds

Full-year sales should rise by as much as 5%, the company said, reporting second-quarter earnings that beat analysts’ estimates

Tue, 15 Aug, 2023 - 15:25

Christian Wienberg

Pandora raised its revenue forecast on strong demand as the Danish jewellery chain expands sales of lab-grown diamonds, aiming to popularise the cheaper alternatives to mined gems.

Full-year sales should increase by as much as 5%, the company said, reporting second-quarter earnings that beat analysts’ estimates.

The stock rose as much as 3.8% and later traded little changed.

Pandora will start selling synthetic diamonds in Mexico, Brazil, and Australia later this year, the company said.

Pandora already sells them in the US, the UK and Canada, with price tags going as high as $4,450 for a 2-carat synthetic diamond ring.

The jeweller dropped natural diamonds in 2021 after reports of human rights abuses at mines and factories and due to their high carbon footprint.

With a starting price of $290 (€265), the lab-made stones are significantly cheaper, matching the company’s focus on affordable jewellery.

Growth prospects are also better.

The $6.6bn global market for lab-made diamond jewellery is set to grow 8.4% a year, faster than the 5.6% annual growth in the mined-diamond market, according to a 2021 report by Stats & Research.

Still, the size of the synthetic diamond market is only a fraction as big.

Demand for synthetic diamond jewellery has been high, according to Pandora, which sells more pieces of jewellery than any other company in the world.

The current collection can only be bought in Britain, the US, and Canada.

First-half sales of the products reached 66m kroner (€8.85m).

CEO Alexander Lacik said the company has big ambitions with lab-grown diamonds, planning to expand them into its 20 largest markets.

Normally it takes a few years for a new product to reach 5% of total revenue, Mr Lacik said, declining to give a specific forecast for synthetic gems.