IDEX Online Research: Third Quarter U.S. Jewelry Sales Trends Positive
December 19, 10
(IDEX Online Research) - U.S. jewelry sales trends for the third quarter of 2010 were encouraging. Total jewelry sales rose, and specialty jewelers, whose sales represent just under half of all U.S. jewelry sales, posted revenue and profit gains.
The table below summarizes quarterly jewelry sales trends in the U.S. market for both the calendar third quarter and the fiscal third quarter, since some companies are on a fiscal third quarter ending on the last day of October.
 Source: US Dept. of Commerce |
The following trends were reported by a majority of jewelers in the third quarter:
· Jewelry sales trends by month were mixed. Sales were relatively strong in July, but weakened in August and September. In October, sales strengthened significantly, as the table below illustrates.
 Source: US Dept. of Commerce |
· The average jewelry ticket was up, generally in the mid-to-high single digit range.
· Most specialty jewelers reported an increase in customer traffic.
· The number of transactions rose, though it was inconsistent. This is good news, since it means that jewelers’ conversion ratio – browsers to buyers – is increasing.
· Unit sales were up for most specialty jewelers.
· Sales growth was the greatest for big-ticket statement jewelry.
· Demand for designer name jewelry was strong. Demand for one-of-a-kind jewelry was solid.
· Bridal demand was particularly strong.
· Proprietary branded jewelry sold well.
· Pandora demand continues to be exceptionally strong.
· Jewelers’ credit sales mix rose marginally. This is a hopeful sign, since lack of consumer credit has hurt jewelers’ sales.
· Sales per store continue to rise. This helps to absorb relatively fixed overhead costs more efficiently.
· Jewelers who sell warranty and insurance plans for jewelry say that this business has been strong.
· Most jewelers reported an increase in their gross margins, though greater sales of higher ticket goods – with an inherently lower margin – had a negative impact on their margins.
· New product introductions seem to be well received.
· Sales of colored diamonds and leather accessories were solid.
· Watch sales seem to have improved notably. The LGI Network Watch Tracker service reported that lower-priced (under $500) fine watch sales and very high-end fine watch sales (over $1,500) were stronger than watches priced in the mid-range of $500 to $1,500.
Outlook Improves
Most of the publicly held companies reported a brightened outlook.
· Management of publicly held companies guided Wall Street analysts toward higher sales and profits than previous forecasts, especially for the fourth quarter of 2010.
· Many jewelers are stepping up their new store openings in 2011 and beyond. Real estate is cheap and available.
· Several jewelers mentioned that they will increase new proprietary product introductions 2011.
Preliminary results for the all-important holiday selling season of November-December suggest that jewelry sales will be stronger than expected.
The following table summarizes sales performance for the major publicly held specialty jewelers for their U.S. stores.
Source: Company reports
All specialty jewelers on the table above gained market share in the third quarter except Zale (stores), Movado, Sterling’s regional brands and Tiffany’s New York Flagship store.