Signet Jeweler’s sales fell in the second fiscal quarter as it restructured its online business.
Revenue at the company, which owns Kay Jewelers, Zales and Jared, slipped 0.5% year on year to $1.53 billion for the three months that ended August 1, it reported Wednesday. The decline came amid the decommissioning of the James Allen website and the transition of some of its products to Blue Nile in May, the jeweler explained.
Same-store sales – at branches open for a year or more – rose 2.2%. The average selling price climbed 6%, with growth in bridal and fashion. Net profit increased to $52.1 million from a $9.1 million loss a year earlier. The lower expenses were due to a decrease in asset impairment to $19.5 million from $80.2 million the previous year, as well as lower operational costs and expenses.
“We delivered another quarter of comparable-sales growth with a positive comparable performance in all fine-jewelry brands. This includes high single-digit unit growth at higher price points,” said CEO J.K Symancyk.
For the first six months of the fiscal year, sales were up 0.2% at $3.08 billion, as profit climbed to $83.8 million compared to $24.2 million a year earlier.
Meanwhile, the company expects total sales for the third fiscal quarter to reach between $1.37 billion and $1.41 billion, with same-store sales coming in at a decline of 1% to a rise of 2%. It predicted operating income for the period of between $31 million and $48 million.
Signet updated its full-year guidance, anticipating it will see between $535 million and $605 million in operating income compared to the $480 million to $560 million it forecast previously. It believes total sales will remain at the earlier outlook of $6.7 billion to $6.9 billion, while same-store sales will stay flat or rise as much as 2.5%, with the earlier range stating a 0.75% drop to a 2.5% increase.
Signet’s share price rose 19% on Wednesday after it announced its results.
Image: A Kay Jewelers store. (Shutterstock)
