Signet Jewelers Misses Expectations on Sales Shift
November 24 2015 - 8:50AM
Dow Jones News
Signet Jewelers Ltd. swung to a profit in its third quarter,
through results missed expectations as the company's lower-priced
Kay brand drove sales.
Bermuda-based Signet last year struck a deal to buy rival Zale
Corp. for $1.46 billion, a move that resulted in one of the largest
global specialty jewelry retailers. In addition to the Signet and
Zale brands, Signet operates the Kay Jewelry and Jared brands,
among others.
Third-quarter earnings were affected by a margin impact due to a
sales mix shift from higher-priced Jared to Kay, said Chief
Executive Mark Light. In addition, prices at the company's Zale
brand declined 1.9%.
Total sales at stores open at least a year rose 3.3% from a year
earlier, with sales at Kay stores up 7.1%, Zales up 2.3% and Jared
down 2.7%.
Signet's report follows a similarly disappointing quarterly
report from fellow luxury jeweler Tiffany & Co. Tuesday
morning. Tiffany, under pressure from a stronger dollar that is
reducing U.S. tourists' spending and hurting international demand,
warned profit would drop 5% to 10% this year.
For its part, Signet on Tuesday issued downbeat guidance for the
fourth quarter, saying it sees adjusted earnings of $3.40 to $3.60
for the three months ending Jan. 30, compared with the $3.58
analysts have expected.
Overall for the third quarter, Signet reported a profit of $15
million, or 19 cents a share, up from a loss of $1.3 million, or 2
cents, a year earlier. Excluding certain items, per-share profit
rose to 33 cents from 21 cents.
Revenue increased 3.3% to $1.22 billion. Analysts projected 39
cents in earnings per share on $1.23 billion in sales, according to
Thomson Reuters.
Shares in the company, up 6.4% this year, were inactive
premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 24, 2015 08:35 ET (13:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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