Aug 28, 2017

Signet Reports Increases in Revenue and Same Store Sales in Second Quarter Fiscal 2018

Announcing its financial results for the 13 weeks ended July 29, 2017 (second quarter Fiscal 2018), Signet Jewelers Limited declared total sales amounting to US$ 1,399.6 million; an increase of   US$ 26.2 million or 1.9%, compared to a decrease of 2.6% in the same period of the previous fiscal.  

Same Store Sales (SSS)  were up 1.4% compared to a decrease of 2.3% in the second quarter Fiscal 2017. “The financial impact of Mother's Day is typically split between first quarter and second quarter, however, in Fiscal 2018, it was entirely a second quarter impact,” Signet explained.   

The increase in sales, the  retailer noted, was mainly  driven  by fashion jewellery including bracelets, rings, and necklaces; and  branded bridal also contributed to the growth. “eCommerce sales in the second quarter were US$ 82.2 million, up US$ 12.6 million or 18.1%, compared to US$ 69.6 million in the second quarter Fiscal 2017,” Signet added. The Company said that both mall and off-mall stores delivered sales growth.  

While Sterling Jewelers' and Zale Jewelry’s SSS increased moderately by 1.8% and 1.6% respectively,  Piercing Pagoda's SSS increased 7.0%; and UK Jewelry's SSS decreased 3.4%.  

Signet’s gross margin for the period was down 120 basis points compared to  second quarter Fiscal 2017 to US$ 457.9 million or 32.7% of sales. “The decline, across divisions, was driven by a strategic shift in promotional activity, which led to lower merchandise margins,” Signet said.

The Company declared diluted earnings per share (EPS) of US$ 1.33, up 25.5% over prior year EPS of US$ 1.06. Signet said this   reflected    “disciplined cost management and early benefits from strategic decision to outsource the credit portfolio”.

Virginia C. Drosos, Chief Executive Officer of Signet Jewelers, commented: "Our encouraging second quarter performance reflects Signet's fundamental competitive strengths and the progress we are making on our strategic priorities. We delivered positive same store sales performance and managed our cost base to deliver operating margin expansion in a highly promotional environment. Further, today we announced the acquisition of to add a leading, fast-growing online jeweler to our portfolio. The acquisition will enhance our innovation and digital capabilities with R2Net’s technology to create a best-in-class OmniChannel shopping experience across our banners. Based on this positive momentum, we are increasingly confident that Signet is well-positioned for the upcoming holiday selling season and on track to achieve our financial targets for the year.”

Ms. Drosos added: “I am stepping into the CEO role at an exciting time for Signet. Together with my leadership team, I am acutely focused on deepening our understanding of consumers, reinventing our OmniChannel shopping experience, and elevating our brand messaging and product assortment.”

Signet's operating income in  the second quarter Fiscal 2018 stood at US$ 135.6 million or 9.7% of sales compared to US$ 119.9 million or 8.7% of sales in prior year second quarter.

The Company’s cash and cash equivalents stood at US$ 119.1 million compared to US$ 118.7 million at the prior year quarter-end.  

 Net inventories were down 5.6%  to US$ 2,282.1 million,  as compared to inventory worth US$ 2,418.3 million at the end of the same period of the prior fiscal.  

The Company reported that as on July 29, 2017 it  had 3,637 stores totaling 5.1 million square feet of selling space. “Since prior year-end, store count decreased by 45 and square feet of selling space decreased 0.4%,” the Company explained. “The majority of new store openings were in off-mall locations, while store closures focused on regional brands.”

Signet’s board declared a quarterly cash dividend of US$ 0.31 per share for the third quarter of Fiscal 2018, payable on November 30, 2017 to shareholders of record on October 27, 2017, with an ex-dividend date of October 26, 2017.