Industry / Retail

Signet Sees Strong 3rd Quarter As It Moves Toward “Accessible Luxury”


Signet Jewelers released another strong set of results for the third quarter of fiscal 2022 (ended Oct. 30), with its average transaction price moving upward as the company targets the “accessible luxury” segment.

The jewelry giant—which owns Kay, Jared, Zales, Piercing Pagoda, James Allen, and recently purchased Diamonds Direct—saw comps rise 18.9% over the same period in 2020 and jump 37.2% over the same period in pre-pandemic 2019.

Comps rose 19.8% at its U.S. and Canadian stores during the quarter and 8.8% in its United Kingdom division. Total sales for the quarter equaled $1.5 billion, with e-commerce sales comprising 14.4% of that, or $273.1 million. Despite overall store traffic remaining below pre-pandemic levels, third-quarter comps grew faster at its brick-and-mortar stores (21.5%, compared to the prior year) than at its e-commerce outlets (14.9%).

The company also increased its financial guidance—for the fifth time this calendar year. It now predicts a total comp increase of 41%–43% for fiscal 2022 (which ends in January). It previously forecast a 35%–38% jump.

Its sales forecast for the upcoming holiday is more measured: It believes comps will rise 6%–8% in the fourth quarter because of an expected consumer shift away from the jewelry category toward more experience-oriented purchases.

Said chief financial and strategy officer Joan Hilson in a statement: “[W]e remain cautious in our outlook for the balance of the year, given uncertainties with COVID and the new Omicron variant, as well as potential shifts in consumer spending patterns.”

Signet said it expects to close 75 stores during fiscal 2022, and open 85, mostly Banter by Piercing Pagoda kiosks. That’s a slight decrease from its original plan to close 100 stores during the fiscal year and open 100.

In a conference call following the release of its financial results, CEO Gina Drosos noted that the expected “wedding boom” will likely continue to fuel business at Signet and in the jewelry category in general.

“That is always good news for our business,” she said. “The most likely people to get engaged [are those] in someone else’s wedding.”

She added that “while the data in the jewelry industry is far from perfect,” it is expected that the jewelry category will show 30% growth in 2021.

She noted that a lot of the category’s growth is at the high end, which is why Signet is targeting the “accessible luxury” segment. Signet’s average transaction value increased 15.2% during the quarter, she said, with particularly strong average price growth at Jared.

Drosos added that Signet’s recent purchase of Diamonds Direct has given it more access to that segment of the market.

“We are confident we can learn from their model,” she said. “They have so much selection and opportunity to experience bridal in a different way. It’s almost like a mega store.”

Signet’s research showed that 25% of customers finished their holiday shopping before Black Friday, in part to avoid anticipated supply shortages. Regardless, Drosos said Signet expects its shelves to be “fully stocked” this holiday.

For the first time on a conference call, Drosos said Signet was increasing its selection of lab-created diamonds, which she called “LCDs.” (Others use “LGDs,” for lab-grown diamonds.)

She said that Signet wants to sell lab-created gems in a way that “doesn’t compete with natural stones” and attracts a new, value-oriented consumer into its stores.

She added that its two mall jewelers, Kay and Zales, are appealing to differentiated customer segments. Kay has been drawing more customers on a “milestone gifting journey,” while Zales has increased its percentage of self-purchasers.

“The clearer our banner propositions become, the faster we grow,” she said.

Drosos said that Signet has started a “climate action and sustainability committee” to eventually decrease its carbon footprint to net-zero.

Finally, she noted that Signet has been certified a Great Place to Work, based on employee surveys. The company fully implemented the planned increase to a $15-an-hour minimum wage during the third quarter.

(Photo courtesy of Signet)

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By: Rob Bates

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