News

Nov 23, 2016

Signet Jewelers Reports Depressed Performance For Q3 Fiscal 2017

Signet Jewelers Limited’s  results  for the 13 weeks ended October 29, 2016 (third quarter Fiscal 2017) showed a dip on all fronts: the Company  reported that  same store sales (SSS) were down 2.0%; total sales were down 2.5%; and total sales at constant exchange rate down 0.5%.

Signet's total sales reached  US$ 1,186.2 million, down by US$ 30.2 million     compared to US$ 1,216.4 million in the 13 weeks ended October 31, 2015 (third quarter Fiscal 2016 ).

In terms of segment, Sterling Jewelers' SSS decreased 3.8%;  that of Zale Jewelry was lower by  1.4%; while Piercing Pagoda's SSS increased 9.5%; and UK Jewelry's likewise saw a growth of  3.6%. 

“The sales declines were due to under performance in select stores (e.g. regionals, Jared); energy dependent regions which reduced SSS about 80 basis points; and declines in select collections such as Charmed Memories and watches,” explained Signet. “This was partially offset by better performance in fashion jewellery and select bridal. Ecommerce sales in the third quarter Fiscal 2017 were US$ 51.6 million, or 4.4% of sales, up US$ 1.1 million, or 2.2%, compared to US$ 50.5 million in the third quarter Fiscal 2016.”

Signet reported a gross margin of  US$ 350.0 million or 29.5% of sales for the period;  down 70 basis points versus Q3 Fiscal 2016, “due to lower sales partially offset by less purchase accounting”; while adjusted gross margin rate was 29.6%, down 100 basis points Q3 Fiscal 2016. “The lower adjusted gross margin rate was due principally to lower sales, higher bad debt expense, and de-leverage on store occupancy,” the Company said. “This was partially offset by favourable merchandise costs and merchandise mix.”

Diluted earnings per common share (EPS)  declared was US$ 0.20 for Q3 Fiscal 2017  while adjusted EPS stood at US$ 0.30.

Mark Light, Chief Executive Officer of Signet Jewelers commented:  “We expected challenging market conditions to result in a sales decline. However, our continuing ability to execute in a difficult environment led to results that were somewhat better than our expectations.”

He added:   "While near term headwinds may persist, we are confident that we made the right investments into initiatives designed to drive growth and deliver on our fourth quarter expectations.”