Signet Sales Decline Amid Slower Engagement Recovery 

Signet Jewelers recorded a loss in the second fiscal quarter as sales fell. The US retailer struck a more cautious tone on the recovery in engagements.  

Revenue declined 8% year on year to $1.49 billion for the three months that ended August 3, the company reported Thursday. It incurred a net loss of $98.5 million, compared with a profit of $75.1 million a year earlier. 

The sales drops reflected “competitive pricing pressure, a slower than expected engagement recovery…the impacts of store closures, and the continued macroeconomic impacts on consumer spending,” the company explained. Calendar changes also shifted some Mother’s Day sales into the first quarter, it noted. 

Profit suffered from a noncash impairment of $166.2 million related to Signet’s digital banners. This resulted from “ongoing challenges from the Blue Nile integration, the lag in engagement recovery, and to a much lesser degree, impacts from market declines in lab-created diamond pricing.” 

Management maintained its sales outlook for the current fiscal year, which ends in late January 2025, and predicted a 5% increase in engagements for the 12 months. However, its guidance now “accommodates” a possible range from a 5% decline to a 5% increase — a more negative assessment than in past statements. One quarter ago, it predicted growth in engagements of 5% to 10% for the fiscal year.  

The company’s unit sales of engagement products were “positive year on year” for the third fiscal quarter so far, Signet added. 

Sales for the first half of the fiscal year dropped 8.5% year on year to $3 billion. The company’s net loss came to $46.4 million, compared with a net profit of $172.5 million a year ago. 

Fashion sales for the rest of the fiscal year will be “more robust based on recent trends,” offsetting a “slower than expected” recovery in the engagement segment, the company predicted.

Image: A Kay Jewelers store in Bethesda, Maryland. (Shutterstock)