Signet Sees Sales Stabilize in Q1

Akron, Ohio--Signet Jewelers Ltd. saw sales stabilize in the first quarter, with same-store sales essentially flat and total sales growing 6 percent.

The Akron, Ohio-based retailer reported comp sales growth of 0.6 percent in North America in the first quarter ended May 5, while total sales reached $1.35 billion, up 6 percent year-over-year.

Zales (comps up 9 percent) and Piercing Pagoda (up 7 percent) outperformed Kay Jewelers and Jared the Galleria of Jewelers stores, which saw same-store sales slide 2 percent and 8 percent, respectively.

Strength in diamond solitaires as well as the Enchanted Disney Fine Jewelry, Neil Lane and Vera Wang Love collections helped offset weak sales of Ever Us jewelry and beads, as Signet “strategically reduced participation” in both the Charmed Memories and Persona collections, CEO Gina Drosos said during the company’s earnings call Wednesday morning.

She also noted that the transaction-related issues the retailer was having at Kay Jewelers when it began outsourcing its in-house credit program are still impacting sales but showing signs of slowing.

Sales at James Allen, the e-commerce site Signet acquired in September 2017, were up 29 percent and helped boost the company’s overall online sales to $146.5 million, an 81 percent year-over-year increase.

E-commerce sales accounted for 10 percent of first quarter sales, up from 6 percent in the prior-year first quarter.

Including sales at H. Samuel and Ernest Jones stores in the United Kingdom, Signet’s same-store sales declined 0.1 percent while total sales grew 6 percent-year-over-year to $1.48 billion.

Gross profit, however, declined to $484.8 million, or 32.7 percent of sales, impacted by the addition of James Allen, which is a lower margin business.

“In the first quarter, we saw signs of stabilization in our overall sales and once again achieved double-digit growth in e-commerce,” Drosos said.

Signet is in the midst of a three-pronged turnaround plan termed the “Path to Brilliance” that focuses on putting customers first, improving the omnichannel experience, and creating a culture that is more agile and efficient.

The company also is shedding stores, primarily in malls where it has both a Kay and a Zales, with plans to close upward of 200 locations in the latter half of this fiscal year.

Drosos provided a glimpse into strategies being employed in the “customer first” prong of its turnaround plan during Wednesday’s conference call.

She said Signet is working to differentiate product and the customer experience among the Kay, Zales and Jared chains, and will be