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Signet Loss Prompts Share Sell-Off
Dec 6, 2018 10:27 AM
By Rapaport News
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RAPAPORT... Signet Jewelers’ shares slumped 14% in early trading Thursday after the retailer reported a deeper loss, even as sales grew.
The retailer’s net loss intensified to $38.1 million from $12.1 million a year ago due to higher expenses and the absence of interest income from its prime credit program, which it sold for $960 million in October 2017.
Same-store sales rose 1.6% in the third fiscal quarter ending
November 3, partly due to initiatives to refresh and refocus jewelry
assortments, as well as clearance sales to make way for new merchandise, Signet
reported Thursday. Its strategic efforts are part of the “Path to Brilliance”
program it launched in March to realign the company with consumer demand
following weak sales.
“We’re still…only three quarters into our three-year transformation,
but we’ve introduced a number of new initiatives this quarter that will support
the Path to Brilliance and help us become a share-gaining category leader,”
said David Bouffard, Signet’s vice president for corporate affairs.
Total revenue increased 3% to $1.19 billion, gaining from
the addition of James Allen, the e-commerce unit it acquired in September 2017,
and beneficial changes to how the group recognizes sales for accounting
purposes.
Signet saw improvements across most of its divisions,
with same-store sales at Kay Jewelers up 0.7%, and Zales enjoying a 2.8%
increase. Jared’s performance was flat by the same measure, which excludes new
stores. Same-store sales rose 16% at Piercing Pagoda and 14% at James Allen.
Revenue rose 3.3% to $4.09 billion for the nine months
ending November 3, while same-store sales increased 1%.
The jeweler raised its forecast for the current fiscal
year ending January 2019 following the results. It now estimates same-store
sales growth ranging from flat to a 1% increase, whereas it had previously
expected a 1.5% decline to flat. For the fourth fiscal quarter,
which includes the holiday season, same-store sales will range from a 1.5% drop
to a 1% increase, it predicted.
“As we enter the holiday season, amid a highly
competitive market and with key selling weeks ahead, we are keenly focused on
delivering on our holiday plans and implementing the beginning stages of our
transformation initiatives in our stores and on our websites,” said Signet CEO Virginia
Drosos.
Image: James Allen diamond engagement ring. (James Allen/Instagram)
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Tags:
david bouffard, James Allen, Jared, Path to Brilliance, Piercing Pagoda, Rapaport News, Signet, Signet Jewelers, Virginia Drosos, zales
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