Signet Sees Comps Rise, Will Increase Holiday Ads

Every holiday, Kay and Jared blanket the airwaves with TV ads. Expect even more this year.

Signet’s holiday advertising will reach a greater number of TV impressions in 2013, CEO Michael Barnes said in a conference call following the announcement of its second quarter financial results. The company is also upping online advertising and advertising in the third quarter.

Overall, Signet posted another set of solid financial results for the second quarter of fiscal 2014 (ended Aug. 3), with overall comps rising 3.6 percent. The results were hurt by the performance of its stores in the United Kingdom: While U.S. same-store sales rose 4.9 percent, U.K. comps fell 2.4 percent.

Comps at both Kay and Jared rose, 5.8 percent and 5.5 percent respectively. But same-store sales at the company’s regional stores fell 4.6 percent. 

Perhaps Signet’s most impressive number was the growth in online sales—up 36 percent to $25.3 million. Barnes commented that 40 percent of online traffic came from mobile devices.

However, operating income was $105.5 million, down 4.9 percent.

Barnes singled out watches, colored diamonds, and bridal jewelry as particularly strong sellers for the company. 

Signet executives also hailed the growth in its outlet division since its purchase of Ultra. It now has 120 Kay Outlet stores and 39 Ultra stores.

“There is a lot of specialized marketing that we have learned from [Ultra],” Barnes said. “Doing made-for product has enabled us to gear it for the bargain-hunting consumers that like to shop the outlet malls.”

“We want to be a leader in the outlet industry,” he said. “We think it’s a big win for us.”

Barnes admitted that Sterling’s biggest competitor, Zale, had made some strides, but promised that his company would stay competitive. 

“We intend to stay the number one jeweler,” he said. “Their job is to try and catch us. Our job is to keep them in the rearview mirror.”

JCK News Director