Sunday, July 7, 2024

Signet Projects Engagement Recovery Despite 9% Decline in Q1 Sales

Akron, Ohio— Signet Jewelers Ltd., the parent company of major jewelry brands including Zales, Jared, and Kay Jewelers, reported a 9% decrease in first-quarter sales but remains optimistic about a forthcoming recovery in engagement ring sales.

Signet’s CEO, Virginia C. Drosos, noted in a press release that the company experienced a notable acceleration from a slow February, culminating in stronger sales in May, buoyed by Mother’s Day purchases. Engagement ring sales in North America rose by 4% during the quarter, excluding digital sales from James Allen and Blue Nile. However, integration issues at these digital platforms have caused fulfillment challenges.

Drosos highlighted customer interest in new products and the loyalty program, which significantly improved fashion jewelry sales since February. Additionally, Signet’s services category outperformed its merchandise sales in the quarter.

“We anticipate continued momentum in the second quarter, leading to positive same-store sales in the second half of fiscal 2025,” Drosos stated.

For the quarter ending May 4, Signet reported overall sales of $1.5 billion, down 9% year-over-year (10% on a constant currency basis), with same-store sales also falling 9%. In North America, first-quarter sales totaled $1.4 billion, a 9% decline attributed to a 2% drop in the average transaction value (ATV) and fewer transactions.

Internationally, Signet’s banners, including Ernest Jones and H. Samuel, saw sales drop to $77.2 million, a 17% decline year-over-year (20% on a constant currency basis), driven by a 15% decrease in ATV and fewer transactions. The sale of 15 watch locations to Watches of Switzerland contributed to the ATV decline. The company closed 23 stores in the U.K., mainly Ernest Jones locations, and plans to close 20 to 30 more stores and renovate 300 locations this year.

Chief Financial Officer Joan Hilson discussed the rising significance of lab-grown diamonds (LGDs), noting a 14% increase in lab-grown diamond fashion jewelry revenue in Q1. Drosos emphasized that LGDs offer price-conscious customers larger carat options and that Signet’s merchandise strategy has maintained ATV levels despite this shift. Signet also partnered with De Beers Group to promote natural diamonds, anticipating a surge in engagements in the coming years.

Signet forecasts a 5-10% increase in engagements this year and a 25% increase over the next three years, particularly among “zillennials” (individuals born between millennials and Gen Z).

Looking ahead, Signet reaffirmed its fiscal 2025 guidance, projecting sales between $6.66 billion and $7 billion, with same-store sales fluctuating from a 5% decrease to a 1% increase. The guidance was revised on April 3 following a preferred shares repurchase transaction, raising its non-GAAP diluted earnings per share outlook to $9.90-$11.52 from the previous $9.08-$10.48.

For the second quarter, Signet anticipates sales between $1.46 billion and $1.52 billion, with same-store sales declining by 2-6%.

Related topics:

Alice
Alice
Alice is a seasoned jewelry designer renowned for her exquisite creations that seamlessly blend artistry with elegance. With a passion for craftsmanship and an unwavering commitment to quality, Alice has established herself as a distinguished figure in the world of fine jewelry. Drawing inspiration from diverse cultures and artistic movements, Alice brings a unique perspective to her designs, creating pieces that transcend mere accessories to become timeless works of art. Her meticulous attention to detail and insistence on using only the finest materials ensure that each creation reflects not only her artistic vision but also a commitment to unparalleled craftsmanship. Having honed her skills through years of dedicated practice and a keen understanding of evolving trends, Alice is adept at translating her clients' desires into bespoke, one-of-a-kind pieces. Her portfolio encompasses a range of styles, from classic and timeless to avant-garde and contemporary, showcasing her versatility and ability to cater to a diverse clientele.

Related Articles

Latest Articles