Growth in Online Sales Mitigate Signet's Losses in Q1

Retail and Consumer Confidence
07/06/2018 11:56

Signet Jewelers recorded a $77.2 million (5.5%) increase in overall sales during the 13 weeks ended May 5, 2018 (Q1 fiscal 2019), yet profits tumbled as the retail group reported a net loss of $496.6 million in the quarter, compared with a profit of $78.5 million in the year-earlier period due to a non-cash impairment related to the credit-outsourcing transition and restructuring charges. 

With overall same store sales performance down 0.1% comparted to the same quarter a year ago, e-commerce was the main driver of Signet's strong sales growth, increasing by 81% to $146.5 million for the quarter, accounting for 10% of total sales, up from 6% in Q1 2017. Among online sales, the e-commerce site James Allen, which Signet took over in September 2017, saw the largest increase, with sales climbing 29% to $53.3 million. The best performers of the brick-and-mortar variety were Zales, which saw sales increase 8.9 % to $298.1 million, and Piercing Pagoda, which gained 7.2 % to $74.4. These gains compensated for losses elsewhere, as Kay same store sales declined by 1.9%, Jared same store sales decreased by 7.8% and international sales fell by 6.7%, driven by lower sales in diamond jewelry and fashion watches, partially offset by higher sales in prestige watches and eCommerce.

“In the first quarter, we saw signs of stabilization in our overall sales and once again achieved double-digit growth in e-commerce,” said CEO Virginia Drosos. The group reiterated its Fiscal 2019 guidance of same store sales of down low-to-mid single digits, and total sales of $5.9 billion-$6.1 billion. Signet still expects to meet its full-year goals. “Looking ahead, we expect second-quarter revenues to be impacted by a tougher prior-year same-store-sales comparison and calendar shifts,” Drosos added. “We are maintaining our full-year 2019 guidance and are intensely focused on laying the foundation to support improved performance in the holiday season.”