Signet Jewelers saw strong results for the first quarter of fiscal 2022 (ended May 1), with comps rising 27.2% from the same quarter two years ago, and a 106.5% jump from last year’s pandemic-afflicted first quarter.
The company posted $1.7 billion in sales for the three-month period, an increase of over $250 million from the same period two years ago, and an $835 million leap from the year before, when most stores were closed. The increases are particularly impressive, CEO Gina Drosos noted on the company’s conference call, as the company has 400 less stores than it did two years ago.
She said that all its U.S. banners delivered double-digit revenue growth compared to two years ago, and that roughly 60% of Kay’s and Zales’ business this quarter came from new customers.
“I think we’re doing a better job getting the right customers to the right banner, based on all of our targeted marketing and our now more distinctive value propositions,” she said. “And then, we’re better targeting the assortments we have at those banners.… We have also broadened our assortments to reach more price points.”
Piercing Pagoda had a particularly strong quarter, she said, delivering its best quarter ever, “including fourth quarters,” Drosos pointed out.
Signet has refreshed Piercing Pagoda’s marketing and is possibly considering changing its name. “Our customer research says that the Piercing Pagoda name doesn’t have the same modernity that our merchandise and banner experience bring,” she said. “So we’re testing the opportunity to freshen and broaden Pagoda’s brand equity.”
Jared has had good success with big diamonds and with its Chosen Platinum, Pnina Tornai, and Royal Asscher brands.
The company is continuing to slim down its overall store footprint; it expects to close 100 stores this year, and will open up to 100 locations, primarily kiosks.
Sales at Signet’s United Kingdom division were relatively weak, with comps falling 12.2% from the year before.
The company still has a “conservative” outlook for the second half of the year, noting that the increased availability of vaccines may shift customer spending toward discretionary items like travel and other experience-oriented categories, said chief financial officer Joan Hilson on the call. It’s boosting marketing to combat that, though she noted how much that will affect business is hard to predict. For the time being, it’s still predicting comps will fall in the second half of the year.
“The pent-up demand for experience-based sectors like vacations and restaurants and movies, that’s the unknown,” she said. “We’re doing what we can do to control that.… We believe we need to conservatively plan, be realistic, but do the things we can do, within our strategies, to drive our business.”
The company has also reinstated its dividend program, giving $0.18 per share for the second quarter of fiscal 2022.
Drosos also took some time out to outline the company’s sustainability and charitable initiatives. Its newly formed Signet Love Inspires Foundation donated to the Equal Justice Initiative, which advocates for criminal justice reform. The company is also celebrating Pride Month by endorsing the Human Rights Campaign’s Business Statement Opposing Anti-LGBTQ State Legislation. Finally, it donated to the Gajera Trust to help with COVID-19 relief in India.
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