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Signet’s 5% Jump in Holiday Sales Underpins Higher 4Q Revenue Guidance

Retailer Reports Strong Performance Across its Brands

Jan 7, 2016 11:59 AM   By Rapaport News
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RAPAPORT... Signet Jewelers reported holiday-season group sales rose 5 percent year-on-year to $1.95 billion in 2015, driven by success across strategic store brands, merchandise categories and selling channels. A stronger result helped the company to improve its revenue guidance for the fourth quarter.

Same-store sales climbed 4.9 percent during eight weeks that ended December 26, compared with a 3.6 percent advance a year earlier. Growth was mostly driven by mall-based and outlet concept stores in the U.S. and Ernest Jones stores in in the U.K., according to a statement by the New York and London-listed retailer January 7. At a constant exchange rate, total sales increased 6.3 percent.

E-commerce sales jumped 11 percent to $139.7 million.

Total sales in the Sterling Jewelers division, the largest by revenue, grew 7.2 percent to $1.2 billion, driven by a 9 percent revenue increase in the Kay-brand products to $778 million and a 7 percent jump at Jared to $359.1 million. Categories including the recently-introduced Ever Us two-stone rings as well as diamond earrings and bracelets sold well. The growth at Jared was driven by the impact of new consumer-research-driven initiatives around store operations, marketing, and merchandising, according to the statement.

Total sales at the Zale division rose 2.3 percent to $532.9 million off the back of “materials increases” at the flagship Zales stores and the Piercing Pagoda kiosks. Zales results were helped by the performance of Ever Us and certain other fashion and bridal brands, as well as gold-jewelry sales at kiosks.

U.K. total sales, which grew 0.9 percent to $217 million amid unfavorable currency exchange rates, were driven by a 3.9-percent advance in same-store revenues. This was mainly because of strong branded bridal, diamond fashion jewelry and beads - most notably at Ernest Jones. Total Ernest Jones sales increased 4.9 percent to 98 million and H.Samuel sales fell 2.2 percent to $119 million.

Following the stronger holiday-season results, Signet narrowed the range of its same-store sales guidance for the fourth quarter that ends January 30 to 4.6- percent to 5 percent, compared with an earlier estimate of 3.5 percent to 5 percent. The earnings-per-share forecast range was improved to $3.44 to $3.50, compared with $3.30 to $3.50. The company said in the statement adjusted earnings per share would probably be $3.54 to $3.60, compared with $3.40 to $3.60 it previously estimated.

“Signet delivered excellent holiday sales as a result of the successful execution of our product, marketing, and omni-channel selling strategies, as well as our superior customer experience,” Signet chief executive officer Mark Light said.

“The implementation of store operations initiatives in the third quarter combined with investment in our recently launched innovative merchandising and marketing programs positioned Signet well for a strong fourth quarter and beyond.”
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Tags: Jared, kay, Rapaport News, retail, Signet, Signet Jewelers, Sterling Jewelers, Zale
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