Signet Sales, Profit Drop as Market Slows

RAPAPORT... Sales and earnings fell at Signet Jewelers in the second fiscal quarter as inflation hit consumer spending and the sector's post-lockdown rebound tailed off.Revenue dropped 1.9% year on year to $1.75 billion in the three months ending July 30, the retailer reported Thursday. Net profit declined 35% to $145.4 million.The US company cited the "impact of the heightened inflationary pressure on consumers' discretionary spending." Shoppers also started allocating more of their money toward experiences and travel, management noted.Sales in North America slipped 1.8% to $1.62 billion, partly because of the impact of the US government stimulus a year earlier, which created a period of record demand and gave an unfavorable comparison. The acquisition of Diamonds Direct in November 2021 helped offset that, adding $113 million in sales for the quarter. Revenue from the rest of the world slumped 15% to $111.6 million, reflecting the depreciation of the British pound."The discipline of our Signet team delivered $1.8 billion in revenue and a 10.6% operating margin, despite a softer topline environment," said Joan Hilson, chief financial and strategy officer. "Our working capital efficiency reflects inventory levels down year over year, excluding acquisitions. This gives us the confidence that we are well positioned to deliver newness with minimal levels of clearance for the holidays."Image: Inside a Diamonds Direct store. (Signet Jewelers)