Signet Sales Beat Expectations Again

RAPAPORT... Signet Jewelers outperformed expectations in the second fiscal quarter as strategic changes paid off, prompting the company to lift its forecast for the full year.Sales more than doubled to $1.79 billion in the three months ending July 31, compared with $888 million in the equivalent period last year, the US retailer reported Thursday. It had predicted revenue of up to $1.65 billion.Meanwhile, same-store sales grew 97%, while net profit reached $224.6 million versus last year's loss of $81.7 million.Signet's new plan of action, known as Inspiring Brilliance - which focuses on innovation and sustainable growth - helped the company capitalize on robust jewelry demand, explained CEO Virginia Drosos. Sales also benefited from the US government stimulus, tax refunds, and "consumer enthusiasm" in reaction to vaccines rollouts, management added."Our Signet team delivered strong second-quarter top- and bottom-line performance with continued execution of our Inspiring Brilliance strategy, enabling us to maximize jewelry category strength and capture share over the last year," Drosos said.Sales at Kay Jewelers, the group's largest chain, soared 107% to $673.7 million, while revenue from the Zales store brand leaped 98% to $367.3 million. Jared saw sales of $311.9 million - 85% higher than a year earlier.The period was the second consecutive three-month period in which Signet's sales exceeded the company's guidance. Revenue in the first fiscal quarter jumped 98% year on year to $1.69 billion, compared with a forecast of up to $1.6 billion.Sales for the first fiscal half ending July 31 doubled to $3.48 billion from $1.74 billion a year before, reflecting a turnaround from the 2020 coronavirus crisis. Net profit hit $363 million, compared with a $278.8 million loss in the prior year.With the recovery in full swing, the retailer predicted sales of between $6.8 billion and $6.95 billion for the current financial year - raising its earlier guidance of up to $6.65 billion.However, the important fourth fiscal quarter, which includes the holiday season, will see same-store sales decline by a low- to mid-single-digit percentage, Signet projected."While not experienced to date, Signet continues to expect a shift of consumer discretionary spending away from the jewelry category toward experience-oriented categories within the second half of the fiscal year," it added "The Delta variant has added complexity in predicting the magnitude and timing of this shift." Image: A Zales store. (Signet Jewelers)