Sales at Signet Jewelers declined in the third fiscal quarter amid uncertain consumer demand and a slow engagement recovery, prompting a conservative outlook for the holiday season.
Revenue dropped 3% year on year to $1.35 billion in the three months that ended November 2, the US retailer reported Thursday. Net profit slid 40% to $7 million. Shares in Signet fell 11% in early trading.
The owner of Kay Jewelers and Jared attributed the downturn to store closures and the sale of its prestige watch business in the UK, as well as “impacts of the hurricanes in the southern US, a slower-than-expected engagement recovery, continued uncertainties in consumer spending patterns, and competitive pricing pressure.”
The results were within expectations, management said. The year-on-year decline in same-store sales eased to 0.7%, compared with a drop of 3.4% in the second fiscal quarter. The average transaction value in the US was flat compared with a year earlier.
“New fashion merchandise, which carries a higher transaction value, and continued recovery in engagement combined to maintain both average transaction value and merchandise margin in a competitive environment,” said Signet chief financial and operating officer Joan Hilson.
America’s largest diamond retailer narrowed its sales forecast to a range of $6.74 billion to $6.81 billion for the current fiscal year, which ends in late January 2025. That translates to a year-on-year decline of 5% to 6%. It previously expected sales to reach between $6.66 billion to $7.02 billion.
Meanwhile, the company expects revenue of $2.38 billion to $2.46 billion for the fourth fiscal quarter, a decrease of up to 4.7% from last year’s $2.5 billion. Same-store sales growth will range from flat to 3%, management predicted.
The guidance partly reflects integration challenges at digital banners Blue Nile and James Allen. However, the company is pleased with how its core banners are performing, Hilson said on an earnings call Thursday.
Revenue dropped 7% year on year to $4.35 billion in the first nine months of the fiscal year. The company incurred a net loss of $39.4 million for the period, compared with a profit of $184.2 million a year earlier.
Image: Inside a Jared store. (Signet Jewelers)
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