Signet Jewelers Fails To Shine This Holiday Season, Shares Tumble

Jewelry
17/01/2019 17:34

Signet Jewelers, the United States' largest retailer of diamond jewelry, announced its same-store sales fell 1.3% to $1.84 billion during the "Holiday Season" (the 9 weeks ended January 5, 2019) as the company failed to get enough demand from its legacy product lines and enough traffic in their stores during key weeks in December. For the current quarter ending Feb. 2, it now expects same-store sales to be down 1.6% to $2.5%. The retailer's shares tanked more than 21 percent Thursday morning after the diamond retailer slashed its sales and profit outlook for Q4 and FY19, but has started to recover as the day wears on.

"Our holiday season performance fell short of our expectations," said Virginia C. Drosos, Chief Executive Officer. "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."

Same-store sales in North America decreased by 0.7% as eCommerce sales increased 6.7% and brick and mortar sales declined 1.6% on a same-store sales basis. Total sales in North America fell by 2.1% to $1.67 billion. The percentage of sales from new merchandise increased, but this performance was more than offset by declines in legacy collections. Bridal sales were up slightly during the Holiday Season on a same-store sales basis. Within bridal, engagement sales increased while anniversary sales declined. International same-store sales decreased by 7.3% to $156.4 million. eCommerce sales declined by 3.8% and brick and mortar sales declined 7.9% on a same-store sales basis. The same-store sales international decline was driven by lower sales in bridal jewelry, fashion jewelry and fashion watches, partially offset by higher sales in prestige watches.