Signet Jewelers 3Q outlook disappoints

Signet Jewelers 3Q profit outlook disappoints; 2Q adj. profit tops Street but revenue misses

Associated Press

NEW YORK (AP) -- Signet Jewelers fell short of second-quarter revenue expectations and a weak outlook sent shares company shares down 4 percent Thursday.

For the period ended Aug. 3, Signet earned $67.4 million, or 84 cents per share. That's down from $70.7 million, or 85 cents per share, a year earlier.

Taking out costs related to its acquisition of Ultra Stores, earnings were 90 cents per share, which beat Wall Street expectations of 83 cents.

Signet's quarterly results arrived after rival Zale topped analyst expectations, and Tiffany & Co. posted a 16 percent profit jump.

Analysts forecast earnings of 83 cents per share, according to a FactSet survey.

Signet's revenue did rise 3 percent to $880.2 million, as online sales increased 29 percent and overall U.S. sales strengthened.

Wall Street expected more, calling for $906.7 million in revenue.

Sales in the U.S. climbed 6 percent, helped by better sales of bridal jewelry, watches and colored diamonds. Both Kay Jewelers and Jared had more transactions in the quarter and saw customers spending more per transaction, on average.

U.K. sales slipped 8.5 percent due in part to store closings, currency fluctuation and a drop in a key revenue metric.

Signet also reaffirmed that the shift of Mother's Day sales partly into the first quarter hurt its second-quarter results somewhat.

Revenue at stores open at least a year, a key gauge of a retailer's health, climbed 3.6 percent. In the U.S., the figure increased 4.9 percent, with a 5.8 percent rise at Kay Jewelers stores and a 5.5 percent gain at Jared locations.

The U.K. posted a 2.4 percent drop in revenue at stores open at least a year.

Looking ahead, Signet Jewelers Ltd. foresees third-quarter earnings of 37 cents to 43 cents per share. Analysts predict earnings of 48 cents per share.

The company's stock dropped $2.72 to $67.11. Over the past year, the shares have traded in a range of $44.80 to $76.15.

Signet had 1,949 stores at quarter's end.

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