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Signet Sales Better Than Expected

E-commerce growth boosts performance in second fiscal quarter.
Sep 3, 2020 10:50 AM   By Rapaport News
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RAPAPORT... 
Signet Jewelers’ revenue and profit beat expectations in the second fiscal quarter as stores unlocked their doors and the retailer upgraded its digital capabilities.

“Sales improved sequentially throughout the second quarter as we reopened stores and remained agile and innovative in these unprecedented times,” CEO Virginia Drosos said Thursday. “During the quarter, we also scaled our new virtual selling model, improved our merchandise assortment, and enhanced our targeted digital marketing to a strong consumer response.”

Group revenue fell 35% year on year to $888 million for the three months ending August 1, exceeding analysts’ forecast of $788.5 million, according to stock-information site Seeking Alpha. The jeweler’s net loss more than doubled to $81.7 million from $36.1 million a year earlier, but the loss per share of $1.73 was less severe than the analysts had predicted.

The company shut all its North America stores in late March due to the coronavirus pandemic. It started reopening them in May, and had 90% of its locations in operation by August 1. While physical retail suffered, e-commerce sales jumped 72% year on year to $270.1 million as the company added virtual consultations with customers and implemented a full-time team of online salespeople, resulting in higher conversion rates than usual.

“While the macro-environment remains uncertain, the company believes that it is prepared, through both its virtual and physical footprints, to serve customers wherever they want to shop and however this upcoming holiday season unfolds,” the jeweler added.

James Allen, Signet’s e-commerce brand, was the only division that saw growth during the quarter, with sales up 20% year on year to $64.3 million. Revenue at Kay Jewelers fell 39% to $325 million, while sales at the Zales banner dropped 34% to $185.1. Jared’s sales also declined 34% to $168.5 million.

Total bridal sales across all brands slipped 27% to $445.9 million, with fashion-jewelry revenue down 33% to $307.2 million.

Same-store sales decreased 31% for the period, but rose 11% in August as the momentum continued, the retailer pointed out. E-commerce sales grew 65% for the month, according to preliminary data.

The company’s shares fell 8% in early trading Thursday.

Image: Shuttered Kay Jewelers store in Florida during Covid-19. (Shutterstock)
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Tags: Coronavirus, COVID-19, Jewelry, Rapaport News, retail, Signet, Signet Jewelers, US
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