Signet Jewelers said that while it experienced a slight decline in overall sales for the Q2 of FY25 that ended 3rd August 2024, it recorded positive trends in merchandise margin and average transaction value.
Signet’s sales for the quarter totalled $1.5 billion, a decrease of 7.6% compared to the same period last year. However, the company’s same-store sales, a key indicator of retail performance, declined by only 3.4%. This improvement was attributed to the company’s successful strategy of introducing new merchandise at attractive price points, which resonated with customers.
“Our strategy to accelerate new merchandise at the right price points is capturing customer demand and driving merchandise margin expansion,” said Signet CEO Virginia C. Drosos. “Both the internal and external metrics we track indicate increasing engagements as we head into the back-half of the year.”
A notable achievement for Signet was the expansion of its merchandise margin by 120 basis points. The company achieved this by effectively balancing new product offerings, competitive pricing, and sourcing savings.
Despite these positive developments, Signet’s Q2 results were impacted by non-cash impairment charges related to Digital Banners goodwill and the Blue Nile trade name. As a result, the company reported a Q2 FY25 net operating loss of $100.9 million, down from operating income of $90.2 million in Q2 of FY24.
Looking ahead, Signet is forecasting total sales in the third quarter to range from $1.345 billion to $1.380 billion, with same-store sales growth expected to be between (1.0%) and +1.5%. The company’s strategy of focusing on high-margin fashion merchandise and services, combined with its ongoing cost-saving initiatives, is expected to drive growth and improve profitability.