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Signet Raises Outlook After Strong Start to 2021

Apr 12, 2021 9:30 AM   By Rapaport News
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Signet Jewelers has predicted sales growth of up to 88% for the first fiscal quarter amid positive market conditions at the start of the year.

“Signet has seen stronger-than-expected conversion and average ticket values in the first quarter,” the jeweler explained Monday. “The company believes this top-line strength is likely due to a combination of traction from strategic initiatives, as well as tailwinds from stimulus, tax refunds and consumer enthusiasm on the heels of vaccine rollouts.”

The announcement comes during a buoyant period in the diamond and jewelry industry, with consumers shopping again following the store closures of 2020. US jewelry sales more than doubled year on year in March, and were 30% higher than in the same month of 2019, Mastercard SpendingPulse reported last week.

Signet has increased its revenue forecast to between $1.57 billion and $1.6 billion for the three months through the end of April. That compares with sales of $852.1 million for same period of 2020, and reflects an improvement in the company’s outlook versus last month, when it estimated an increase of up to 67%.

Same-store sales will improve 97% to 99%, compared with earlier guidance of 80% to 84%, the company predicted. Operating income will range from $85 million to $100 million on a non-GAAP (Generally Accepted Accounting Principles) basis, up from its previous forecast of $40 million to $60 million, and compared with a loss of $142.5 million a year earlier.

Signet also raised its full-year outlook, predicting a revenue increase of up to 17% to $6.14 billion, and same-store sales growth of 17% to 20%.

Nonetheless, recent Covid-19 surges in India and elsewhere could lead to inventory delays, the company cautioned. More than 90% of the world’s polished diamonds come from manufacturing units in the Indian city of Surat.

“At this time, Signet believes it has mitigated these short-term impacts,” it noted. “However, if the duration and magnitude of these inventory slowdowns intensify, there could be future negative impacts on the company’s full-year guidance.”

The company’s share price rose 6% in pre-market trading Monday.

Image: A Jared store. (Signet Jewelers)
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Tags: COVID-19, India, Jewelry, MasterCard SpendingPulse, Rapaport News, retail, Signet, Signet Jewelers, US
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