Signet Jewelers Ltd. said Thursday that its first-quarter profit rose 9 percent thanks to cost controls and more profitable U.S. stores, but its sales growth and guidance fell short of Wall Street expectations. Shares fell as investors became concerned that demand is weakening for jewelry.
Luxury jewelry maker Tiffany & Co. also cut its outlook for the year on Thursday, citing a global slowdown in demand for its jewelry.
Signet, which runs chains including Kay Jewelers and Jared The Galleria of Jewelry, said its net income totaled $82.5 million, or 96 cents per share, for the quarter ended April 28. That compared with a profit of $75.4 million, or 87 cents per share, in the same quarter last year.
Analysts, on average, expected a profit of 91 cents per share, according to a FactSet poll.
Revenue rose 1 percent to $900 million from $887.3 million, while analysts expected higher revenue of $911.3 million.
The company said a calendar shift that moved Mother's Day sales into the current quarter reduced the recent quarter's sales by an estimated $32 million.
Revenue at stores open at least a year rose 1.2 percent. The metric is a key measure of a retailer's health, because it excludes sales at stores that opened or closed during the period.
U.S. revenue rose 2 percent to $751.5 million. The company said its merchandise was more profitable and it had higher income from credit-related fees, improving U.S. margins — how much revenue it keeps as profit after costs.
United Kingdom revenue fell 0.5 percent to $148.5 million.
In the current quarter, which ends in July, Signet said it expects to post a profit of 78 cents to 84 cents per share. Analysts expect higher profit of 89 cents per share.
The company expects revenue in stores open at least a year to increase by a middle to high single digit percentage, benefiting from Mother's Day.
Shares of the company, which is based in Bermuda, fell $4.15, or 8.7 percent, to $43.60 in heavy trading in the late morning. Other jewelry sellers also slid. Tiffany stock dropped $5.40, or 8.7 percent, to $56.40. Shares of Zale Corp. fell 16 cents, or 6.1 percent, to $2.48.