Signet 2Q saved by e-commerce, acquires R2Net to enhance omni-channel
Signet Jewelers was off to a rocky start to its fiscal year, posting a decrease in sales and net income in the first quarter, but the company made up for the performance with its second quarter.
Total sales for the quarter increased 1.9% to $1,399.6 million, compared to a 2.6% decrease in the prior year’s second quarter and an 11.1% decrease in the first quarter of fiscal 2018. Same store sales increased 1.8%, led by Piercing Pagoda, which increased 7.0%, and e-commerce sales increased 18.1% to $82.2 million.
In addition, net income attributable to common shareholders increased to $85.2 million, or $1.33 per diluted earnings per common share, from $81.9 million, or $1.06 diluted earnings per common share.
"Our encouraging second quarter performance reflects Signet's fundamental competitive strengths and the progress we are making on our strategic priorities,” said CEO Virginia C. Drosos, who was named CEO in July. “We delivered positive same store sales performance and managed our cost base to deliver operating margin expansion in a highly promotional environment. Further, today we announced the acquisition of JamesAllen.com to add a leading, fast-growing online jeweler to our portfolio.”
Signet also acquired R2Net, the owner of JamesAllen.com and Segoma Imaging Technologies, for $328 million in an all cash transaction. The acquisition will bring together Signet’s retail business with R2Net’s digital technology that includes 360° Diamond Display Technology, Virtual Ring Sizer and Ring Try-On mobile application.
Founded in 2006 by Oded Edelman, James Schultz, Michele Sigler and Dean Lederman, R2Net is a New York City-based company with global operations, including technology innovation centers in Israel and 24/7 customer service operations in Frederick, Maryland.
“This is a highly strategic acquisition for Signet,” added Drosos. “The James Allen brand and R2Net’s technologies and innovative approach present a unique opportunity to rapidly enhance our digital capabilities and create a distinctive customer shopping experience which more seamlessly integrates our digital and physical retail platforms.”
Signet reiterated fiscal 2018 same store sales guidance and updated its earnings per share guidance. The company still expects same store sales to be down in the low-mid single-digits and the EPS to be between $7.16 and $7.56.
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