Signet Jewelers’ shares jumped 6% in early trading Thursday after the retailer increased its sales forecast for the current fiscal year.
The jeweler adjusted its guidance following a rise in same-store sales in the third fiscal quarter, it said Thursday. While group sales slipped 0.3% to $1.19 billion in the three months ending November 2, same-store sales — at branches open for at least a year — grew 2.1% for the period. E-commerce sales rose 11% year on year to $139.3 million, accounting for 12% of total sales.
The company saw positive same-store sales growth at Kay, Zales and Piercing Pagoda, as well as an increase of 16% at its online banner, James Allen, more than offsetting small declines at Jared and Peoples. Bridal proved strong, led by the Enchanted Disney, Vera Wang Love and Neil Lane collections, while fashion jewelry saw a rise from gold pieces and Disney collections. Those sales outweighed watches and other jewelry categories, which slid on a same-store basis, primarily due to a drop in sales of Pandora products, Signet noted.
The jeweler reported a net loss of $35.5 million, compared with a loss of $29.9 million during the same period a year ago.
Signet now estimates total sales of $6.01 billion to $6.05 billion for the fiscal year ending January 2020, compared with its previous forecast of $6 billion to $6.03 billion. Same-store sales are expected to be down 1% to 1.7%, rather than the 1.5% to 2.5% the jeweler had previously predicted. For the fourth fiscal quarter, which includes the holiday season, same-store sales will decrease 2% to 4%, Signet predicted.
In 2018, the jeweler launched its Path to Brilliance initiative, a three-year program to restore profitability by saving $200 million to $225 million. The company has already closed 86 of the 150 stores it plans to shutter during the current fiscal year, reducing its presence in lower-end malls and closing most of its regional banners. The company will cut costs by $70 million to $80 million this year, it said.
In light of those savings, the company raised its earnings outlook for the year to $3.11 to $3.29 per share, from $2.91 to $3.23 per share.
“We delivered positive same-store sales and improved profitability year over year and ahead of our guidance as we continued to drive our Path to Brilliance transformation,” said Signet CEO Virginia Drosos. “Our financial guidance embeds the progress we have seen year to date, balanced with our expectation for a competitive retail holiday environment."
Signet will report its holiday sales results on January 16.
Image:James Allen diamond engagement ring
Signet, Holiday sales, Sales Forecast, Signet Jewelers, Kay, Zales, Piercing Pagoda, Enchanted Disney, Vera Wang Love, Neil Lane, Rapaport News