As sales at most U.S. nameplates decline, its CEO is “glad the election is behind us”
Signet reported falling comps for the second quarter in a row, though sales did beat expectations.
Overall comps for the third quarter (ended Oct. 29) fell 2 percent. Sales fell 2.5 percent, to $1.5 billion.
Once again, Piercing Pagoda—purchased as part of the Zale acquisition—was the corporate star, posting a 9.5 percent gain in comps.
But all its other U.S. nameplates saw declines. Comps declined 2.9 percent at Kay; 4.6 percent at Jared; 10.5 percent at Sterling regionals; 1 percent at Zales; and 11.6 percent at Gordon’s.
Comps rose 3.6 percent at Signet’s U.K. jewelry division, while same-store sales at Zale Canada (Peoples and Mappins) fell 0.9 percent.
Despite the declines, the number beat the market’s expectations, and at press time Signet’s stock had risen nearly 5 percent.
In a conference call following the release of the financial results, CEO Mark Light singled out “wins” during the quarter, pointing to good sales of “stacked” bracelets, earrings, and diamond fashion, including the Vera Wang and Neil Lane collections. E-commerce and outlets also did well, he said.
He had high hopes for the second year of Ever Us, noting that “beacons” typically do better in their second year.
Still, he admitted the consumer environment is “challenging” and added, “We are glad the election is behind us.”
The company still expects comps to fall 2 to 4 percent in the all-important fourth quarter, though it has raised its earnings guidance. And Light believes fundamentals still favor the company.
“The jewelry industry has consistently grown for the past 25 years,” he said. “It has increased about 3 to 4 percent on a compound annual rate. There are some up quarters and some down quarters, but it’s been a consistent performer, and Signet has outperformed the industry consistently over those past 25 years and most recently.
“We believe once the jewelry industry comes back to normalcy we will continue to gain market share as we have in the past,” he added. “Most importantly, from all of our research, consumers still find jewelry a wonderful way of expressing emotion and love.”