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Signet Raises Full-Year Outlook
Dec 5, 2019 9:59 AM
By Rapaport News
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RAPAPORT... Signet Jewelers’ shares jumped 6% in early trading Thursday
after the retailer increased its sales forecast for the current fiscal year.
The jeweler adjusted its guidance following a rise in
same-store sales in the third fiscal quarter, it said Thursday. While group
sales slipped 0.3% to $1.19 billion in the three months ending November 2,
same-store sales — at branches open for at least a year — grew 2.1% for the period. E-commerce sales rose 11% year on
year to $139.3 million, accounting for 12% of total sales.
The company saw positive same-store sales growth at Kay,
Zales and Piercing Pagoda, as well as an increase of 16% at its online banner,
James Allen, more than offsetting small declines at Jared and Peoples. Bridal
proved strong, led by the Enchanted Disney, Vera Wang Love and Neil Lane
collections, while fashion jewelry saw a rise from gold pieces and Disney
collections. Those sales outweighed watches and other jewelry categories, which
slid on a same-store basis, primarily due to a drop in sales of Pandora
products, Signet noted.
The jeweler reported a net loss of $35.5 million, compared
with a loss of $29.9 million during the same period a year ago.
Signet now estimates total sales of $6.01
billion to $6.05 billion for the fiscal year ending January 2020, compared with its previous forecast of $6 billion to
$6.03 billion. Same-store sales are expected to be down 1% to 1.7%, rather than
the 1.5% to 2.5% the jeweler had previously predicted. For the fourth fiscal
quarter, which includes the holiday season, same-store sales will decrease 2%
to 4%, Signet predicted.
In 2018, the jeweler launched its Path to Brilliance
initiative, a three-year program to restore profitability by saving $200 million to
$225 million. The company has already closed 86 of the 150 stores it plans to
shutter during the current fiscal year, reducing its presence in lower-end
malls and closing most of its regional banners. The company will cut costs by
$70 million to $80 million this year, it said.
In light of those savings, the company raised its earnings
outlook for the year to $3.11 to $3.29 per share, from $2.91 to $3.23 per
share.
“We delivered positive same-store sales and improved
profitability year over year and ahead of our guidance as we continued to drive
our Path to Brilliance transformation,” said Signet CEO Virginia Drosos. “Our financial guidance embeds the progress we have seen year to date, balanced with our expectation for a competitive retail holiday environment."
Signet will report its holiday sales results on January 16.
Image: James Allen diamond engagement ring. (James Allen/Instagram)
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Tags:
Enchanted Disney, Jared, kay, Neil Lane, Pandora, peoples, Piercing Pagoda, Rapaport News, Signet, Signet Jewelers, Vera Wang Love, Virginia Drosos, zales
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