Signet Holiday Revenues Disappoint

RAPAPORT… Signet Jewelers’ sales fell during the holiday season, prompting the retailer to lower its full-year outlook.

Total revenue dropped 2.5% to $1.84 billion for the nine weeks ending January 5, while same-store sales — at branches open for at least a year — declined 1.3%, the company said Thursday. E-commerce revenue grew 5.6% to $222.3 million.

“Our holiday-season performance fell short of our expectations,” Signet CEO Gina Drosos said. “These holiday results reinforce the need to take even faster action to improve our financial and operational performance. We will move decisively to improve profitability through aggressively optimizing our cost structure and continuing to right-size our store base, as well as more effectively managing our inventory.”

Newer merchandise performed well, as the company noted good demand for its Enchanted Disney Fine Jewelry, Vera Wang Love, and Neil Lane collections, while solitaires also did well. However, demand weakened for longstanding collections such as Ever Us and Le Vian, it explained. Overall sales of fashion jewelry declined, Signet reported.

Jared was the weakest of Signet’s major US brands, with same-store sales down 8%, while Kay Jewelers saw a 0.8% decline. Those results outweighed a 17% increase in same-store sales at Piercing Pagoda, with Zales improving 2.9% by the same measure. Same-store sales outside the US fell 7.3%.

Signet expects same-store sales to decline by 1.6% to 2.5% in the fourth quarter ending January, from an earlier growth forecast of negative 1.5% to positive 1%. Total revenue will range from $2.14 billion to $2.16 billion, versus an earlier outlook of $2.17 billion to $2.22 billion.

In March, the retailer said it would close more than 200 stores by February 2019 as part of its plan to reinvigorate the company.

The results come after the company agreed Wednesday to pay a civil penalty of $11 million to the Consumer Financial Protection Bureau and the New York Attorney General’s office to settle claims it registered customers for credit cards without their knowledge or consent.


Image: A Jared store. (Newscast)