Shares of Signet Jewelers Ltd rose slightly on Wednesday after posting better-than-expected fiscal fourth quarter results. The parent of Kay Jewelers and Zales, however, reported a drop in earnings and sales from the year ago figures, citing weak holiday sales and increased competition.
Earlier this year, Sterling Jewelers, a subsidiary of the company, was fined $11 million for misleading clients to register for its credit card and insurance program. Signet Jewelers stock was 1.37% to $28.02 in the afternoon trading session. The stock has lost more than 11% since the beginning of the year.
SIG Earnings & Outlook
Signet Jewelers posted fourth-quarter net losses of $116.2 million, or $2.25 per share compared to a profit of $343.0, or $5.24 per share a year earlier. Adjusted for items such as goodwill impairment charges, tax effects and among others, earnings were $3.96 down from $4.28 reported in the year-ago quarter.
Revenue dropped to $2.15 billion from $2.29 billion a year earlier. Analysts surveyed by Refinitiv had forecast adjusted earnings of $3.81 per share on sales of $2.14 billion.
Same store sales during the quarter fell by 2%, missing Wall Street estimate for a drop of 1.9%. For the full year, Signet posted adjusted earnings of $3.72 a share on revenue of $6.247 billion. Same store sales in fiscal 2019 declined 0.1%.
Looking forward. the company expects adjusted EPS of between $2.87 to $3.45 on sales of $6.0 billion to $6.1 billion for fiscal 2020. Signet projects a 2.5% drop in same-store sales in fiscal 2020. Analysts are expecting adjusted full-year earnings of $3.13 per share on sales of $6.1 billion for the year.
Signet Jewelers CEO Comments
Signet Jewelers Chief Executive Virginia C. Drosos stated, “In Fiscal 2019, we began our Path to Brilliance transformation journey, building foundational capabilities to drive future growth. We made progress on our Path to Brilliance initiatives, achieving double-digit eCommerce growth, delivering $85 million of net cost savings, and continuing to optimize our store footprint.”
“However, we 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,” Drosos added.
Signet Jewelers Ltd Company Profile
Signet Jewelers Ltd is a retailer of diamond jewelry. Its merchandise mix includes bridal, fashion, watches and others. The bridal category includes engagement, wedding and anniversary purchases. Its segments are the Sterling Jewelers division, the Zale division, and the UK Jewelry division.
The Sterling Jewelers division consists of the stores which operate in malls and off-mall locations as Kay and Jared. The division also operates mall-based regional brands and the JamesAllen.com website. The Zale division consists of the two reportable segment, Zale Jewelry, and Piercing Pagoda.
The UK Jewelry division consists of the stores operating as H. Samuel and Ernest Jones. It has business operations in the US and other countries and derives key revenue from the Sterling Jewelers division.