Signet Jewelers Posts Drop in Fiscal Q2 Earnings, Profit

(IDEX Online) – Signet Jewelers Ltd reported that fiscal second-quarter earnings slipped 4.7 percent as the retailer continued to see weak sales in the U.K., while higher costs pressured margins.

For the current quarter, Signet expects same-store sales to rise in the low-single-digit range on a percentage basis.

The owner of mall-based Kay Jewelers and the higher-end Jared the Galleria of Jewelry has seen its revenue improve in recent quarters as strong domestic sales largely helped to offset weaker demand from Europe. It acquired Ultra Stores Inc. for $57 million in November in a bid to broaden its customer base with the help of the outlet-center chain.

For the quarter ended August 3, Signet reported a profit of $67.4 million versus a year-ago profit of 70.7 million.

Revenue increased 3.1 percent to $880.2 million. Analysts had recently forecast revenue of $910 million.

Same-store sales rose 3.6 percent, while Signet had expected a rise in the low-to-mid single-digit range.

The U.S. division generated a same-store sales increase of 4.9 percent, led by a 5.8 percent rise at Kay and an increase of 5.5 percent at Jared. Overall revenue from the division, which makes up the majority of Signet's sales, rose 5.6 percent to $741.1 million driven by particular strength in bridal, colored diamonds and watches.

E-Commerce sales rose 29 percent to $31.2 million.

Meanwhile, in the U.K. division sales fell 8.5 percent to $139.1 million, while same-store sales slipped 2.4 percent.