Sales exceed estimates
Signet Jewelers’ (SIG) reported net sales of $1.19 billion came in ahead of analysts’ estimate of $1.16 billion and increased 3.0% on a YoY (year-over-year) basis. Signet’s net sales benefited from improved comps (1.6%) driven by clearance sales. Its double-digit e-commerce sales growth rate led by its James Allen acquisition further supported its net sales. However, store closures, unfavorable currency rates, and a shift in the timing of its promotions remained a drag.
In comparison, Tiffany & Co.’s (TIF) third-quarter sales improved 3.75% on a YoY basis but fell short of analysts’ estimate.
By segment, Signet’s same-store sales (or comps) increased 2.1% in North America, reflecting clearance sales, a focus on product assortments, and the contribution of James Allen sales. The average transaction value increased 4.5%, but the number of transactions fell 1.1%. Meanwhile, a shift in the timing of promotions for Zales and Peoples adversely affected comps by 85 basis points.
Within North America, comps grew 16.2% at Piercing Pagoda, 2.8% at Zales, and 0.7% at Kay. Comps remained flat for the Jared banner.
The International segment’s comps dropped 3.1% YoY, reflecting a lower number of transactions and weakness in the United Kingdom.
Signet reported a loss
Signet reported adjusted EPS of -$1.06, which came in better than analysts’ consensus estimate of -$1.10 for the quarter. An unfavorable mix, higher advertising expenses, and operational issues adversely impacted the company’s bottom line.