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Signet 1Q Sales +10%, Profits +50%

Signs New $400M Credit Facility
May 26, 2011 8:10 AM   By Avi Krawitz
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RAPAPORT... Signet Jewelers posted record sales in the first fiscal quarter driven by growth in its U.S. businesses, which has continued into the current period.

“The strong sales momentum has continued into the start of the second quarter, and our focus remains on enhancing our sustainable competitive advantages, improving our execution and maintaining financial flexibility,” said Mike Barnes, Signet’s new chief executive.  “We remain well positioned to continue to increase sales productivity and achieve our financial objectives for this year.”

Group sales rose 10.2 percent year on year to $887.3 million in the three months that ended April 30, 2011, with same store sales up 10.2 percent.  Net income jumped 50 percent to $75.4 million.

U.S. sales increased 11.4 percent to $738 million as average prices grew 12.1 percent. The strongest growth of 13.4 percent was seen at Kay Jewelers, where the average price per item was $360, while sales at the more upscale Jared The Galleria of Jewelry rose 12.7 percent with an average price of $798. Sales at Signet’s regional brands fell 2.1 percent.

Sales at the U.K. division, consisting of H. Samuel and Ernest Jones, rose 4.5 percent to $149.3 million but fell 1.3 percent when measured at constant exchange rates.

Group cost of sales rose 5 percent to $537.6 million while corporate expenses grew 11 percent to $263.8 million.

Signet also announced a new $400 million five year revolving credit facility to be used for working capital requirements and general corporate purposes.  “The new credit agreement provides improved credit terms, lower fees and applicable interest rate margins and provides an enhanced financial structure until 2016,” the company explained. The agreement replaces an existing $300 million facility, which was due to expire in June 2013.

 

Tags: Avi Krawitz, ernest jones, H. Samuel, Jared, Kay Jewelers, Signet
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