Pandora profits plunged in its second quarter as it bore the cost of its turnaround plan of replacing stockists’ poor selling products with newer items.

EBIT dropped to 173 million krone (£18.5m) between April to June from 440 million krone (£46.9m) in the second quarter last year, however this beat analysts’ estimates of 133 million krone (£14.2m).

In the first half of 2012, Pandora, which is chaired by former Asda boss Allen Leighton, received returns of discontinued products worth 523 million krone (£55.8m) and replaced 472 million crowns (£50.3m) worth of stock.

The retailer launched the plan, which it hopes will boost sales, in February, however it said it could cost up to 800 million krone (£85.3m).

Pandora’s jewellery is sold through 500 UK stockists.

The jeweller ran into difficulty last year after customers shunned the brand which had outpriced its core market.

Pandora chief executive Björn Gulden, who was hired in December to lead the jeweller’s turnaround plan, said that the exchange programme has been welcomed by its stockists and its new collections have been positively received by customers.