Signet Jewelers Limited (SIG) delivered solid holiday sales numbers driven by improved comparable-store sales (comps) across all its divisions backed by successful product execution, marketing strategies and omni-channel plans.
For the eight weeks ended Dec 27, 2014, Signet posted a 3.6% rise in comps compared with the 5% growth during last year’s holiday season. The increase this year was primarily led by strong comps growth in its UK division. Non-comp related sales growth in the period totaled about 42.7%.
Net sales over the two-month period advanced 45.3% year over year to $1.854.4 million, while on a constant currency basis sales grew 46.3%.
Segment-wise, net sales in Sterling Jewelers division increased 4.2% to $1,116.3 million along with comps growth of 2.5%. Sales from non-comp stores rose 1.7% during the period. Strong performance at the division resulted from increased sale of branded bridal and select diamond fashion jewelry assortments, offset by reduced sale of lower-price-point fashion jewelry collections.
Net sales in the Zale division came in at $521.0 million and comps grew 3.5%. Improved comps can be mainly attributed to additional investments in marketing and branded merchandise, coupled with strength in Canada. During the holiday period, assortments that particularly contributed to growth were diamond collections in bridal and fashion.
UK Jewelry division marked an increase of 5.6% in net sales to $215.1 million, while comps increased 9.7% during the period. On a constant-currency basis, net sales increased 10.2%, while sales at non-comp stores rose by 0.5%. Assortment that led to the growth was diamonds, including branded bridal. Other outperformers this holiday season included beads, watches and the increasingly popularity of Black Friday-style shopping.
Following the robust holiday sales, the company reiterated its guidance for the fourth quarter and fiscal 2015. Signet expects fourth-quarter fiscal 2015 adjusted earnings in the range of $2.95–$3.05 per share and comps in the range of 3%–4%. The company’s adjusted earnings are likely to benefit by 36–40 cents per share from the Zale operations.
For fiscal 2015, Signet expects adjusted earnings in the range of $5.51–$5.61, including 20–24 cents per share positive impact from the Zale operations. However, the company lowered its capital expenditure forecast for the year to $230–$240 million, versus its previous guidance of $240–$250 million, which includes expenses related to the launch of Kay and Jared outlets, store remodeling and enhancing information technology infrastructure at the Zale division.
Moreover, this Zacks Rank #2 (Buy) company announced a quarterly dividend of 18 cents per share for the fourth quarter, payable on Feb 26, 2015 to shareholders with record as of Jan 30, 2015 and an ex-dividend date of Jan 29, 2015.
The holiday shopping season this year has been an uplifting one for most retailers, with many of them reporting solid sales numbers for the months of November and December. Some of these retailers, with solid holiday sales results include Macy's Inc. (M), Gap Inc. (GPS) and J. C. Penney Company Inc. (JCP).
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