Shares of Pandora, the world’s largest mass-market jewelry brand with more than 6,400 stores worldwide, fell more than 7% after organic growth in its biggest market, the United States, fell 12% in the quarter. Year.

The brand said it was shrinking in the US market due to the fading effect of coronavirus-related stimulus packages that boosted sales a year ago.

“The U.S. has low unemployment, wages are rising a little bit, and people have a lot of savings, so there’s still a lot of disposable income,” Chief Executive Alexander Lasik said in an interview.

Shares of Pandora were down 7.3% at 0810 GMT. The stock has lost nearly 40% of its value since the start of the year.

Lasik said jewelry sales were not affected by rising inflation. “If we look at our key metrics like store traffic, basket size and average selling price globally and across each sales channel, we don’t see an obvious impact from higher inflation,” he said.

Consumers are willing to accept higher prices for more expensive and refined jewelry, but Pandora has largely kept prices unchanged for cheaper pieces, he said.

The world’s largest jewelry maker by manufacturing capacity said traffic at its 219 Chinese stores fell 60% from a year earlier in the second quarter due to the impact of coronavirus-related closures.

That prompted the company to postpone a planned refresh of its brand in that market until next year, Lasik said.

Second-quarter revenue grew 10% to 5.66 billion Danish kroner ($773.33 million), compared with an average of 5.61 billion kroner, analysts polled by the company had expected.

Pandora still expects organic growth of between 4% and 6% for the full year and reaffirmed an operating profit margin expectation of 25.0%-25.5%.

($1 = 7,3190 Danish Kroner)