Signet Raises Full-Year Outlook

RAPAPORT... Signet Jewelers' shares jumped 6% in early trading Thursdayafter the retailer increased its sales forecast for the current fiscal year. The jeweler adjusted its guidance following a rise insame-store sales in the third fiscal quarter, it said Thursday. While groupsales slipped 0.3% to $1.19 billion in the three months ending November 2,same-store sales - at branches open for at least a year - grew 2.1% for the period. E-commerce sales rose 11% year onyear to $139.3 million, accounting for 12% of total sales. The company saw positive same-store sales growth at Kay,Zales and Piercing Pagoda, as well as an increase of 16% at its online banner,James Allen, more than offsetting small declines at Jared and Peoples. Bridalproved strong, led by the Enchanted Disney, Vera Wang Love and Neil Lanecollections, while fashion jewelry saw a rise from gold pieces and Disneycollections. Those sales outweighed watches and other jewelry categories, whichslid on a same-store basis, primarily due to a drop in sales of Pandoraproducts, Signet noted. The jeweler reported a net loss of $35.5 million, comparedwith a loss of $29.9 million during the same period a year ago. Signet now estimates total sales of $6.01billion to $6.05 billion for the fiscal year ending January 2020, compared with its previous forecast of $6 billion to$6.03 billion. Same-store sales are expected to be down 1% to 1.7%, rather thanthe 1.5% to 2.5% the jeweler had previously predicted. For the fourth fiscalquarter, which includes the holiday season, same-store sales will decrease 2%to 4%, Signet predicted.In 2018, the jeweler launched its Path to Brillianceinitiative, a three-year program to restore profitability by saving $200 million to$225 million. The company has already closed 86 of the 150 stores it plans toshutter during the current fiscal year, reducing its presence in lower-endmalls and closing most of its regional banners. The company will cut costs by$70 million to $80 million this year, it said. In light of those savings, the company raised its earningsoutlook for the year to $3.11 to $3.29 per share, from $2.91 to $3.23 pershare. "We delivered positive same-store sales and improvedprofitability year over year and ahead of our guidance as we continued to driveour Path to Brilliance transformation," said Signet CEO Virginia Drosos. "Our financial guidance embeds the progress we have seen year to date, balanced with our expectation for a competitive retail holiday environment." Signet will report its holiday sales results on January 16. Image: James Allen diamond engagement ring. (James Allen/Instagram)