Signet boosts full-year outlook on solid third quarter

By

Robin Driver

Published
Dec 3, 2021

Signet Jewelers Limited, the parent company of jewelry retail chains including Kay, Jared and Zales. lifted its full-year financial outlook on Thursday, after reporting a year-over-year increase of 18.3% in its third-quarter sales.

 
The company, which had previously expected to report total net revenue of between $7.04 billion and $7.19 billion in the current fiscal year, is now counting on a figure in the range of $7.41 billion to $7.49 billion. Likewise, Signet now expects its annual same-store sales to see year-over-year growth of between 41% and 43%, compared to its previously reported guidance of an increase between 35% and 38%.
 
In the third quarter ended October 30, 2021, the group’s sales totaled $1.5 billion, up from $1.3 billion in the prior-year period. Compared to the same period two years ago, when Signet was yet to feel the impact of the Covid-19 pandemic and posted quarterly revenues of $1.2 billion, the company’s latest Q3 sales represented growth of 29.5%.

Same-store sales for the period increased 18.9% compared to the prior-year period and 37.2% compared to two years ago. E-commerce sales totaled $237.1 million, increasing 14.4% year over year, while brick-and-mortar same-store sales rose 20.3% compared to the same period last year.
 
Signet’s North American same-store sales rose 19.8% versus the previous year’s Q3, reflecting a 15.2% increase in average transaction value and 3.5% growth in number of transactions. Brick-and-mortar same-store sales in the region increased 21.5% year over year, while e-commerce revenues rose 14.9%.
 
The company’s international same-store sales were up 8.8%, as a 4.0% decline in average transaction value was offset by a 12.8% rise in number of transactions. International brick-and-mortar same-store sales increased 8.9%, while e-commerce sales were up 8.6%.
 
Quarterly net income at Signet was $83.9 million, or $1.45 per diluted share, compared to approximately $900,000, or $0.02 per diluted share, in the prior-year period.
 
Year to date, Signet’s total sales were $5.0 billion, up 64.9% compared to $3.0 billion in the same nine-month period in the previous year, while net income was $429.7 million, or $7.27 per diluted share, compared to a loss of $294.4 million, or $5.67 per diluted share, a year earlier.
 
“While uncertainties remain in the macro environment, our strategies are working as evidenced by strong conversion rates and higher average transaction value,” commented Signet CEO Virginia Drosos in a release. “Our data driven customer insights and planning helped us secure earlier receipt of our holiday assortment and ensure no significant disruptions to our supply chain or labor needs.”
 
During the third quarter, Signet announced that it had entered into an agreement to acquire U.S.-based off-mall jeweler Diamonds Direct, which, the company said has “a highly productive, efficient operating model with demonstrated growth and profitability.” The acquisition, a $490 million all-cash transaction that Signet said would be immediately accretive, has closed since the start of Q4.
 
Looking forward, Signet expects to see revenue of between $2.40 billion and $2.48 billion in the fourth quarter, with same-store sales in the period predicted to rise in the range of 41% to 43% year over year.