Signet Jewelers Continues to Sparkle
Signet Jewelers is shining bright.
The specialty jewelry retailer — parent to the Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, Peoples Jewellers, Piercing Pagoda and jamesallen.com brands — revealed quarterly earnings Thursday morning before the market opened, improving on top and bottom lines and showing strength across nearly all categories. Company shares closed up 13.99 percent Thursday to $69.58 a piece as a result.
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“Our strong first-quarter results demonstrate the momentum we are building as we continue Signet’s transformation,” Virginia C. Drosos, chief executive officer, said in a statement. “Thank you to all our team members for their relentless dedication to our customers and each other and for embracing new capabilities with excellence as we drive innovation and sustainable long-term growth.
“While the jewelry category is experiencing meaningful growth, we are outpacing market growth and gaining share consistent with our Inspiring Brilliance strategy,” Drosos continued. “Specifically, we are winning in our biggest banners through consumer-inspired differentiation, as evidenced by double-digit revenue growth in both Kay and Zales, versus this time two years ago. We are successfully beginning to stretch the top and bottom boundaries of the mid-market as Jared continues to grow at higher price points and in custom design and Piercing Pagoda delivered its best quarter ever accessing more value inspired self-purchasing shoppers. Further, our Connected Commerce strategy is resonating, delivering higher conversion rates and growth both online and in stores. And finally, we are building a more innovative and agile culture with investments in talent, digital capabilities, newness in product assortment and modern content and marketing channels that give us distinct competitive advantages. As I look ahead, I’m confident in our people and our strategy and believe 2021 will be another transformative year for Signet.”
Total revenues for the three-month period ending May 1 were $1.68 billion, up from $852 million the same time last year. But the gains were even up from pre-pandemic levels of $1.4 billion. The retailer made more than $138 million in profits during the quarter as a result, compared with losses of $197 million the same time last year.
Strength was across nearly all categories. Total same-store sales increased more than 106 percent, while e-commerce sales rose roughly 110 percent to $346 million. Brick-and-mortar same-store sales increased nearly 106 percent, year-over-year. In North America, same-store sales shot up more than 117 percent during the quarter. Same-store sales fell about 12 percent internationally.
During WWD’s virtual summit in October, Jamie Singleton, president of the Kay Jewelers, Zales and Peoples divisions of Signet Jewelers Ltd., said jewelry shopping hasn’t slowed amid quarantine. In fact, consumers continued to purchase commemorative pieces for major life events, like birthdays, graduations and engagements — even if they had to celebrate online.
Signet was quick to capitalize on the digital opportunities, offering virtual consultations and wedding ceremonies; clienteling services, such as phone calls from sales associates, online piercing follow-ups and virtual styling and shopping appointments, and increased curbside pick-ups.
“Virtual selling at scale has propelled us forward digitally; it’s giving us a tremendous competitive advantage,” Singleton said at the time. “This aggressive and fast-paced digital transformation led us to some seriously exciting results.”
The specialty jewelry retailer has about 2,800 stores in the U.S., U.K. and Canada. The company closed about 400 stores in calendar year 2020 and said Thursday it plans to close more than 100 others in the current fiscal year, while opening up 100 new locations.
Company headwinds include potential resurgence of COVID-19 in key trading areas, supply chain disruptions and unemployment, which could impact consumer spending habits.
Still, Signet expects revenues in the second quarter to be between $1.6 billion and $1.65 billion. For the full fiscal year 2022, Signet is anticipating total sales between $6.5 billion and $6.65 billion, up from its previous estimates of $6 billion to $6.14 billion.
“We are entering this next phase of Signet’s transformation from a position of financial strength,” said Joan Hilson, chief financial and strategy officer. “We are continuing to increase liquidity with ongoing cash, cost and inventory discipline, enabling accelerated investment in innovation and growth. Even as we expect some current tailwinds from stimulus and slower than anticipated return to travel and experience spending to subside in the back-half of 2021, we are confident in our ability to deliver strong shareholder return and generate cash. As such, our board has approved reinstatement of a common dividend in the second quarter.”
The company ended the quarter with about $1.3 billion in cash and cash equivalents and nearly $147 million in long-term debt.
Shares of Signet are up more than 527 percent, year-over-year.
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