×
Ads
Published
Apr 3, 2019
Reading time
2 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

Signet Jewelers pushes forward with restructuring amid falling sales

Published
Apr 3, 2019

Global jewelery retail group Signet Jewelers Limited announced declining fourth-quarter sales and earnings which nonetheless edged out analysts’ expectations on Wednesday, as the company continues with its Path to Brilliance restructuring strategy.


Signet's sales saw particularly sharp drops outside of North America - Instagram: @kayjewelers


In the fourth quarter ended February 2, 2019, Signet saw its total sales drop $138.4 million or 6.0% from $2.29 billion in the prior-year period to $2.15 billion, a figure which was $11 million higher than analysts had expected, according to figures cited by CNBC. The company’s same-store sales declined 2.0%.
 
In North America, Signet’s same-store sales were down 1.4%, as increases of 17.1% and 2.0% at Piercing Pagoda and Zales, respectively, were offset by a 1.6% decline at Kay and an 8.4% decrease at Jared.

Abroad the company fared worse still, posting a 7.3% decrease in international same-store sales, largely due to falling sales of bridal jewelry, fashion jewelry and fashion watches.
 
Full-company e-commerce sales totaled $260.6 million, representing an increase of 5.4% and accounting for 12.1% of all Q4 sales. Brick-and-mortar same-store sales decreased 3.0%.
 
Net loss attributable to common shareholders was $116.2 million, or $2.25 per diluted share, representing a steep decline from the net income of $343.0 million posted in the previous year.

Excluding one-time charges, the company reported EPS of $3.96, 14 cents higher than analysts’ expectations, according to CNBC.
 
For the full fiscal year 2019, total sales were $6.2 billion, down $5.9 million or 0.1% from $6.3 billion in 2018. Same-store sales also fell 0.1%.
 
Same-store sales increased 0.5% in North America and fell 5.2% internationally.
 
Signet’s annual net loss attributable to common shareholders was $690.3 million, or $12.61 per share, compared to net income of $486.4 million in fiscal 2018.
 
“[W]e did not finish the year as strongly as expected due to a highly competitive promotional environment, continued consumer weakness in the UK, and lower than expected customer demand for legacy merchandise collections that impacted our holiday fourth quarter results,” explained Signet CEO Virginia C. Drosos in a release.

“Using important learnings from Year One of our transformation, as we look forward to Fiscal 2020, we are accelerating initiatives to further develop the seamless and personalized OmniChannel jewelry experience that Signet can uniquely provide.”
 
Launched in March 2018, Signet’s Path to Brilliance strategy has already resulted in $85 million of net cost savings but the company is ultimately aiming to achieve total savings of between $200 million and $225 million from fiscal 2019 to 2021.
 
As part of the strategy, the retail group closed 262 stores in 2019 and has plans to shutter another 150 locations next year.
 
According to Drosos, moving into fiscal 2020, the company will continue to execute a number of new turnaround initiatives, differentiating its product assortment through exclusive merchandise and customization options, improving messaging and promotional activity, focusing on the development of its e-commerce and mobile channels, and elevating full-service offerings like repairs and piercings.
 
Signet currently expects same-store sales to decrease up to 2.5% or remain flat in fiscal 2020, while total sales are predicted to be between $6.0 billion and $6.1 billion. Diluted EPS is expected to be in the range of $1.86 to $2.66. 

Copyright © 2023 FashionNetwork.com All rights reserved.