Dec 06, 2019

Signet’s Same Store Sales Up 2.1% in Q3 FY2020

Signet Jewelers Limited announcing its results for the 13 weeks ended November 2, 2019 (Q3 FY2020) said yesterday that total global same store sales (including online transactions) were up 2.1%, driven by an improved performance across North America and further growth in its eCommerce business.

While overall revenue for the quarter stood at $1.19 billion, down 0.3% in the quarter on a reported basis and up 0.2% on a constant currency basis, eCommerce sales were $139.3 million, up 11.4% year over year, as compared to a 0.9% growth in brick and mortar same store sales. The eCommerce segment now accounts for 11.7% of sales, up from 10.5% in the prior year quarter, Signet reported.

In North America same store sales grew 2.9%, average transaction value (ATV) increased 0.5% and the number of transactions increased 2.8%. Growth in Kay, Zales, Piercing Pagoda and James Allen made up for declines at Jared, Peoples and the regional banners. Kay and Jared same store sales included a strategic decision to offer higher levels of clearance to accelerate inventory reduction ahead of receipt of new holiday merchandise, Signet said.

eCommerce sales grew 13.0%, and brick and mortar same store sales grew 1.6%. James Allen sales grew 15.8% and North America eCommerce sales excluding James Allen grew 10.6%, the Company reported.

Signet also said that bridal and fashion category sales grew on a same store sales basis in North America. Bridal performance was led by growth in the Enchanted Disney Fine Jewelry®, Vera Wang Love®, Neil Lane® and Leo® collections, partially offset by declines in the Ever Us® and Tolkowsky collections. Fashion growth was driven by on trend collections including gold fashion jewellery, the Love+Be Loved collection™, diamond fashion initiatives and Disney. The watches and other categories declined on a same store sales basis with the other category performance primarily driven by declines in Pandora®.

Meanwhile, international same store sales decreased 5.2%. ATV and the number of transactions decreased 1.4% and 4.3%, respectively. Sales declined across categories and continued to reflect a difficult operating environment in the UK.

Signet also updated its guidance saying that same store sales in FY2020 would drop 1.7% to 1.0% with total sales being between $6.01 billion - $6.05 billion.

Fiscal 2020 GAAP operating income was expected to be between $147 - $167 million and non-GAAP operating income between $270 - $280 million, the company added.

"We delivered positive same store sales and improved profitability year over year and ahead of our guidance as we continued to drive our Path to Brilliance transformation,” said Virginia C. Drosos, Chief Executive Officer. “As we approach the key selling weeks ahead, we are focused on successfully executing our customer inspired holiday plans featuring new on-trend merchandise, enhanced eCommerce capabilities, and more relevant and targeted marketing campaigns. Our financial guidance embeds the progress we have seen year to date balanced with our expectation for a competitive retail holiday environment."

In Fiscal 2020, the company expects net cost savings of $70 million - $80 million. The company expects its transformation plan to deliver $200 million - $225 million of net cost savings in Fiscal Years 2019-2021, inclusive of the $85 million achieved in Fiscal 2019.

In Fiscal 2020, the company expects to close approximately 150 stores, with 86 closures in the fiscal year to date and limited new store openings for the full year. The company expects it will have reduced its store base by approximately 12% over the three-year period from Fiscal Years 2018 - 2020, materially reducing its exposure to lower grade malls and simplifying the portfolio by exiting most of its regional banners.