Signet Jewelers raises outlook, CFO steps down

By

Jennifer Braun

Published
Aug 31, 2018

UK and North America-focused jewellery giant Signet Jewelers managed to continue the strong momentum from its first quarter, announcing on Thursday better-than-expected second-quarter results. 

 
Total sales for the quarter ended August 4, 2018, increased 1.5 percent reaching $1.42 billion, with same store sales up 1.7 percent compared to the prior year quarter. 
 
The Ohio-based company, which owns brands such as Zales and Kay Jewelers, credited the sales jump to new initiatives to “increase newness and refocus the product assortment, as well as incremental clearance sales to make room for new product," among other things. 

E-commerce sales were again a bright spot for the company with sales up 82.8 percent at $150.3 million, including James Allen. 
 
“While it is still early in our journey, we are encouraged by our improving year-to-date performance as we execute against our Path to Brilliance transformation plan. During the second quarter, we continued to see stabilization in same store sales, and we remain confident that we have the right strategies in place to continue to drive operational improvement over the long-term,” said CEO Virginia C. Drosos.
 
Earlier this year, Signet announced plans to close over 200 stores as part of its three-year 'Path to Brilliance' transformation plan. That plan involves turning the firm into an omni-channel “category leader."
 
Coinciding with financial results, the company also announced that Chief Financial Officer Michele Santana will leave the company in 2019 after eight years to pursue other opportunities.
 
Signet has initiated an external executive search and expects to appoint a new CFO by the end of the company’s fiscal year.
 
Looking ahead, the company raised its full year guidance with total sales now expected to reach $6.2 billion to $6.3 billion, compared to $5.9 billion to $6.1 billion, and adjusted EPS of $4.05 to $4.40, up from prior guidance of $3.75 to $4.25. Signet, however, stated that its remaining cautious. 
 
“To reflect our improved second quarter performance, we are modestly raising our revenue and earnings guidance for the year. For the fourth quarter, however, where a vast majority of our annual operating profit is generated, we are remaining appropriately cautious in our outlook as many of our Path to Brilliance initiatives are being launched later in the year.”