Announcing its sales for the nine weeks ended January 5, 2019 (Holiday Season) Signet Jewelers Limited reported that Same Store Sales (SSS) had dipped.

“Total same store sales performance decreased 1.3% year over year, inclusive of a positive impact of approximately 90 bps related to incremental clearance and a positive impact of 40 bps due to planned shifts in timing of promotions at Zales and Peoples,” the Company stated. “Payment plan participation rate, including both credit and leasing sales, improved year over year, reflecting continued operational improvements.”

While e-commerce sales in the Holiday Season at US$ 222.3 million, were up by 5.6% y-o-y; brick and mortar same store sales declined 2.2%.

The Company has revised its fourth quarter guidance for same store sales to down by 1.6%-2.5%.

As part of its guidance Signet has announced a GAAP EPS of US$ 2.32 - US$ 2.53 and non-GAAP EPS of US$ 3.77 - US$ 3.92. “GAAP EPS guidance now includes a US$ 0.19 charge related to resolution of a previously disclosed regulatory matter which is excluded from non-GAAP EPS guidance,” the Company added.

Signet has also revised Fiscal 2019 guidance to same store sales being approximately flat. It announced also a guidance for GAAP EPS as (US$ 8.16) to (US$ 7.93) and non-GAAP EPS of US$ 3.53 to US$ 3.69.

“GAAP EPS guidance now includes a US$ 0.20 charge related to resolution of a previously disclosed regulatory matter which is excluded from non-GAAP EPS guidance,” the Company stated.

Signet said that in North America SSS decreased 0.7%. This included a favorable impact of approximately 100 bps of incremental clearance and a favorable impact of 45 bps due to a planned shift in timing of promotions at Zales and Peoples. Here e-commerce sales increased 6.7% and brick and mortar sales declined 1.6% on a same store sales basis.

On the international front, SSS decreased 7.3%; e-commerce sales declined 3.8% and brick and mortar sales declined 7.9% on a same store sales basis.

“The same store sales decline was driven by lower sales in bridal jewelry, fashion jewelry and fashion watches, partially offset by higher sales in prestige watches,” the Company explained.

Providing a summary of various brands under its umbrella, Signet reported that Piercing Pagoda’s SSS increased by 16.9%; Zales grew by 2.9% (including a positive impact of 160 bps due to a planned shift in the timing of promotions); Kay’s SSS decreased 0.8%; Jared’s SSS decreased 8.0%; and James Allen sales declined 0.2%.

Interestingly, Signet noted that during Holiday Season, the percentage of sales from new merchandise increased, “but this performance was more than offset by declines in legacy collections”.

And while bridal sales were slightly higher this Holiday Season on a same store sales basis, within the bridal segment, the jeweller saw sales of engagement products increase while anniversary sales declined.  

Virginia C. Drosos, Chief Executive Officer, commented, "Our holiday season performance fell short of our expectations. Early improvements in refreshed merchandise assortment, digital marketing and OmniChannel were more than offset by larger than expected declines in legacy product lines. In addition, the competitive promotional environment we saw early in the season intensified in December and, despite our increased promotional investments, we experienced reduced traffic during key December gifting weeks. Combined with higher than expected credit costs, these factors negatively impacted our profitability."

Drosos went on to say, “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. As we enter the second year of our Path to Brilliance transformation, we expect to accelerate initiatives to enhance our product assortment, marketing personalization and analytics, promotional effectiveness, service offerings, and ecommerce to deliver a more seamless and engaging OmniChannel customer experience. We will provide an update on our plans for FY2020 when we report our fourth quarter earnings in March.”

Signet's Board of Directors declared a quarterly cash dividend of US$0.37 per share for the fourth quarter of Fiscal 2019, payable on March 1, 2019 to shareholders of record on February 1, 2019, with an ex-dividend date of January 31, 2019.