Signet Jewelers released what its CEO called “outstanding” financial results for the first quarter of fiscal 2014, with same-store sales rising an impressive 6.4 percent.
The results were led by huge comp increases in the United States, with same-store sales jumping 10.2 percent at Kay and 6 percent at Jared. Total sales increased 10 percent. For the quarter ahead, the company expects comps to continue to increase in the low to mid single-digit range.
“It feels like a more stable [macroeconomic] environment [in the U.S.] than I would have said so 12 months ago at this time,” said CEO Michael Barnes in a conference call following the release of the financial results.
The company is also seeing continued strength in its proprietary brands, Barnes said, including Tolkowsky diamonds and Neil Lane Bridal.
The company also announced plans to open 70 to 80 Kay and Jared stores over the next fiscal year, up from the previously announced 65 to 75. Most of those new stores will be Kays, primarily in the off-mall area, said Chief Financial Officer Ronald Ristau on the conference call.
Comps in Signet’s U.K. division, however, fell 2.3 percent, a sign of the weakness of the European market.
“The U.K. continues to be a very challenging market for us,” said Barnes, noting that the company wants to add “new brands” to the market. He added that some of the company’s recent price increases at its H. Samuel chain “didn’t stick as well as we thought they would.”
The company’s e-commerce sales were particularly strong, rising more than 40 percent. Barnes estimated that Signet was now the No. 3 e-commerce player in the jewelry space; in 2009, it was 11th.
Highlights of Signet’s financial results for the first quarter of fiscal 2014 (ended May 4)
- Signet total sales: $993.6 million, up 10.4 percent
- Operating income: $142.8 million, up 10.4 percent.
- Diluted earnings per share Up 17.7 percent
- Operating margin: 14.4 percent
- Kay same-store sales: Up 10.2 percent
- Jared same-store sales: Up 6 percent
- Regional brand same-store sales: Up 0.5 percent
- Total U.S. same store sales: Up 8.1 percent
- U.S. total sales: $858.6 million, up 14.3 percent
- H. Samuel same-store sales: Down 4 percent
- Ernest Jones same-store sales: Down 0.2 percent
- Total U.K. same-store sales: Down 2.3 percent
- U.K. total sales: $135.0 million, down 9.1 percent
- E-commerce sales: $31.1 million, up 40.7 percent