Signet Ups Fiscal Guidance Again After Strong Q1

Akron, Ohio—Signet Jewelers Ltd. started its fiscal year on a high note with sales nearly doubling year-over-year, leading the jewelry giant to raise its guidance for the year ahead.

In the first quarter ending May 1, sales totaled $1.69 billion, up 98 percent year-over-year, with same-store sales up 107 percent.

Compared with the first quarter in fiscal 2020, prior to the COVID-19 pandemic, sales were up 18 percent.

Signet expects to close more than 100 stores this fiscal year (FY 2022), but will open as many as 100 locations, mainly kiosks like the high-performing Piercing Pagoda kiosks.

The company operates 2,833 stores and kiosks as of May 1, compared with 3,172 locations last May.

“We delivered strong performance across our portfolio,” CEO Virginia Drosos said in a press release announcing the results.

“While the jewelry category is experiencing meaningful growth, we are outpacing market growth and gaining share consistent with our ‘Inspiring Brilliance’ strategy.” 

“Inspiring Brilliance” is the next stage of Signet’s turnaround plan. It includes growing services revenue, expanding its luxury and value segments, bolstering digital commerce, and utilizing its data.

E-commerce sales in the first quarter more than doubled, up 110 percent to $346.3 million, while brick-and-mortar sales grew 106 percent year-over-year.

The jewelry giant has been improving its digital commerce capabilities in recent quarters, providing virtual consultants and other elements to blend the in-store and online experiences.

“For the first time, ship-from-store automation is available across all banners,” said Chief Financial Officer Joan Hilson on the company’s earnings call Thursday morning.

Drosos told the story of a customer who reached out in search of a cushion-cut engagement ring. The catch was he needed it the very next day.

The customer shopped online, reached out to a virtual consultant, shopped alongside an associate and then came in to see the diamond in person. 

The exchange utilized all of Signet’s digital offerings, ending with a happy customer and a $25,000 sale, said Drosos. 

Though the first quarter was strong, Signet said it is prepared for a shift of consumer discretionary spending away from jewelry to other experience-based categories as the vaccine rollout continues. In response, the company will ramp up its marketing efforts.

Looking to North America, where Signet’s banners include Kay, Jared and Zales, first-quarter same-store sales grew 117 percent, e-commerce sales 113 percent, and brick-and-mortar same-store sales 118 percent.

The average transaction value was up 15 percent year-over-year while the number of the transactions was up 90 percent. 

When compared to the first quarter two years ago, pre-pandemic, Signet said foot traffic remains down but it has delivered growth over that period through higher conversion and average transaction value. 

Sales in the bridal category were up 121 percent year-over-year in the quarter while sales in the fashion category were up 116 percent.

Watch sales were up 52 percent while the “others” category, which includes gift items, beads, repairs, service plans and other non-jewelry items, saw sales grow 26 percent.

By banner, Piercing Pagoda was the top performer, with sales up 189 percent.

Sales at e-tailer James Allen were up 132 percent year-over-year while Kay Jewelers saw sales more than double, up 103 percent.

Sales at Zales also rose 103 percent while sales at Jared were up 95 percent.

Canadian chain Peoples Jewellers posted a 40 percent jump in sales for the quarter.

Looking ahead, Signet raised its fiscal 2022 revenue guidance, expecting revenue of $6.5 billion-$6.65 billion, up from its prior guidance of $6 billion-$6.14 billion. 

This marks the second time Signet has upped its guidance for the fiscal year.

The company expects second-quarter revenue of $1.6 billion to $1.65 billion.

Same-store sales for the fiscal year are expected to rise 24 to 27 percent, up from prior guidance of 17 to 20 percent.

In the second quarter, same-store sales are expected to be up 76 to 82 percent.

The company said it still expects same-store sales to be negative in the second half of fiscal 2022.

Signet’s board of directors has also reinstated its dividend program on the common shares.