Financials

Signet Raises Guidance Again, Expands Selection of Lab-Grown Diamonds

FinancialsDec 02, 2021

Signet Raises Guidance Again, Expands Selection of Lab-Grown Diamonds

Its additions include an exclusive lab-grown diamond cut for Zales’ “Vera Wang True” line and a lab-grown option for Kay’s “Leo” cut.

20211202_Monique Lhuillier.jpg
An 18-karat white gold 1 3/8-carat emerald-cut diamond engagement ring from the Monique Lhuillier Bliss collection at Signet Jewelers’ banner Kay Jewelers. The collection has performed well since its launch, according to the company’s recent quarterly results.
Akron, Ohio—Signet Jewelers Ltd.’s third-quarter sales climbed double digits, encouraging the jeweler to up its guidance for the fiscal year once again.

In the third quarter ending Oct. 31, total sales were up 18 percent to $1.54 billion with same-store sales climbing 19 percent.

Compared to the third quarter of fiscal 2020, pre-pandemic, total sales were up 29 percent with same-store sales rising 37 percent. 

Year-to-date, Signet’s sales have totaled $5.01 billion, up 65 percent year-over-year.

Quarterly brick-and-mortar same-store sales rose 20 percent year-over-year in the third quarter and were up 29 percent compared with pre-pandemic levels. 

Online sales increased 14 percent year-over-year to $273.1 million. When compared with pre-pandemic levels, online sales have nearly doubled, jumping 96 percent.

“While uncertainties remain in the macro environment, our strategies are working, as evidenced by strong conversion rates and higher average transaction value,” Signet Jewelers CEO Gina Drosos said in a press release on the Q3 results.

“We have built a healthy operating structure enabling transformative investments that are attracting new customers and driving loyalty. Our data-driven customer insights and planning helped us secure earlier receipt of our holiday assortment and ensure no significant disruptions to our supply chain or labor needs.”

Signet Jewelers is cutting costs, expecting to see a four-year cumulative saving of $400 million through the end of fiscal 2022, but it’s also investing in technology to bolster its efficiency.

During an earnings call Thursday morning, Drosos described its data-driven labor model that plans out staffing needs, noting productivity is up 75 percent.

The company is also using a digital simulation of its supply chain to cut back on shipping delays and other logistical issues.

Signet is upping its distribution capacity by 25 percent, said Drosos, including adding local distribution points via its ship-from-store option.

After introducing a buy online, pick-up in store service last year, the jeweler has since expanded the program to 2,100 locations, Drosos said.

The investments have extended to its employees via a raise in wages, expanded benefits, training and development opportunities, and career growth, she said. 

In North America, where Signet’s banners include Kay, Jared and Zales, same-store sales rose 20 percent year-over-year, and were up 39 percent compared with pre-COVID levels.

Brick-and-mortar same-store sales climbed 22 percent compared with last year and were up 31 percent compared with pre-pandemic levels. 

Online sales in the region rose 15 percent compared with last year and nearly doubled, up 98 percent, when compared with before COVID.

The average transaction value increased 15 percent year-over-year, with the number of transactions up 4 percent.

In the U.K., same-store sales were up 9 percent compared with last year and up 18 percent compared with pre-pandemic levels.

Brick-and-mortar U.K. sales rose 9 percent year-over-year, and were up 18 percent when compared with before COVID. E-commerce sales increased 9 percent year-over-year and were up 72 percent compared with pre-pandemic levels.

Average transaction value dipped 4 percent while the number of transactions rose 13 percent year-over-year.

“Our merchandising teams have used our data to build and tier our [lab-grown diamond] assortment in a way that doesn’t compete with natural stones.” — Signet CEO Gina Drosos

Looking at sales by category, Signet’s bridal sales climbed 14 percent year-over-year in the quarter and are up 58 percent in the first nine months of the year.

Fashion jewelry sales were up 30 percent in the quarter and 85 percent in the nine-month period. Watch sales rose 38 percent in the quarter and 65 percent in the nine-month period.

Sales in the “others” category, which includes repairs, gifts, and other non-jewelry items, dipped 1 percent year-over-year, but were up 40 percent in the nine-month period.

Signet has expanded its assortment of lab-grown diamonds, Drosos said on the call.

“Our merchandising teams have used our data to build and tier our [lab-grown diamond] assortment in a way that doesn’t compete with natural stones,” she said.

For select styles, customers can choose a lab-grown stone with higher carat weight or clarity.

In addition, there will be an exclusive lab-grown diamond cut introduced into Zales’ “Vera Wang True” line and a lab-grown diamond option for Kay’s “Leo” cut through its “Leo Legacy” line.

 Related stories will be right here … 

Breaking down Signet’s Q3 performance by banner, Kay Jewelers posted quarterly sales of $573.4 million, up 17 percent year-over-year and up 67 percent in the first nine months of the year.

Zales posted quarterly sales of $291.9 million, up 16 percent year-over-year and up 66 percent in the nine-month period.

“Kay and Zales are appealing to increasingly differentiated consumer segments,” said Drosos.

While both banners attract bridal customers, almost 30 percent of new Zales customers are looking to buy jewelry for themselves, up 4 percent compared with two years ago.

At Kay, 65 percent of new customers are making a milestone purchase or buying a gift, 7 percent higher than two years ago.

“We plan our assortments with these journeys as our compass. We’re able to introduce newness with much better success rates because our customers are more precisely defined and because our assortments are relevant to the journey our customers are on,” said Drosos.

The new Monique Lhuillier x Kay Jewelers collection, launched at the end of September, has generated $2 million in sales.

At Jared, quarterly sales were up 19 percent to $277.1 million and up 60 percent in the nine-month period.

A new loyalty program, Vault Rewards, is being tested out at select Jared stores and is expected to roll out to all Signet banners, said Drosos.

The program gives customers exclusive discounts, a trial membership to newly acquired jewelry rental subscription service Rocksbox, and unlimited jewelry cleaning while Signet learns more about its customers.

Piercing Pagoda saw sales increase 19 percent in the quarter and nearly double in the nine-month period, up 95 percent.

The kiosk-centric brand recently underwent a name change, now called Banter by Piercing Pagoda.

E-tailer James Allen posted quarterly sales of $90.4 million, up 18 percent year-over-year and up 63 percent in the nine-month period.

Signet recently acquired Diamonds Direct but said it will include its results within the company’s North America segment rather than reporting it as a separate banner.

As for the possibility of new acquisitions, Chief Financial Officer Joan Hilson said the company’s main priority is growth investments.

“We always stay open-minded to what might be another way to bring new capabilities, especially new opportunities to learn,” she said on the call.

Looking at its store count, Hilson said the company expects to close 75 stores across its banners in fiscal 2022 and open 85 stores.

Most of the openings will be Banter by Piercing Pagoda locations, due to its strong-than-expected performance in select locations and favorable leases.

For the fiscal year ahead, Signet upped its financial guidance again, noting that the company’s sales momentum continued through Black Friday and Cyber Monday.

Signet is expecting revenue to reach $7.41-$7.49 billion, compared with its prior guidance of $7.04- $7.19 billion. 

Same-store sales are expected to grow 41 to 43 percent, up from its prior guidance of 35 to 38 percent.

Looking to the fourth quarter, revenue is expected to reach $2.40-$2.48 billion with same-store sales growth in the range of 6 to 9 percent.

Signet’s updated guidance depends on a variety of factors, including the “magnitude and duration of COVID-19,” particularly the Omicron variant, and the degree of the shift of consumer discretionary spending away from jewelry to more experience-based purchases, it said.

The Latest

Peruffo necklace that won the Couture Design Award for “Best in Debuting”
Events & AwardsJun 06, 2023
Meet the 2023 Couture Design Award Winners

The jewelry trade show awarded brands and individuals across 14 categories.

Sales expert and author Peter Smith
ColumnistsJun 06, 2023
Squirrel Spotting: The Challenge of Closing Sales

Many times, customers walk away without buying because of this one thing salespeople neglect to do, Peter Smith writes.

Grandview Klein Diamonds and Phillipine Angula Development Investments’ Eros Primary School donations
Policies & IssuesJun 06, 2023
Grandview Klein Diamonds, Local Partners Donate to Primary School

The donation to a school in Namibia included computer equipment, infrastructure repair and sanitary wear.

LAB230043_Dossier_NJ_1872x1052_V1.jpg
Brought to you by
The Next Step for GIA Diamond Reports

The most trusted diamond report, available in print or the GIA App.

Exterior of the Colorado Convention Center
Events & AwardsJun 05, 2023
HardRock Summit Organizers Gear Up for Third Annual Show

More than 250 gem, jewelry, and mineral companies are expected to exhibit, including the American Gem Trade Association.

Weekly QuizJun 02, 2023
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Alexandra Rosier gold and opal Eternal Love Hands necklace
TrendsJun 02, 2023
Take a Peek at Couture’s Newest Design Talents

This year’s Design Atelier is full of gems.

Saboo Fine Jewels emerald and titanium earrings
CollectionsJun 02, 2023
Piece of the Week: Saboo Fine Jewels’ Emerald Earrings

They’re a testament to the power of excellent design.

Cover-WN19-Back-&-Front_V5-RGB-(1)_Community.jpg
Brought to you by
Beyond Borders: Crucial Factors in Colored Stone Origin Determination

Navigate origin determination with Continuing Education seminars offered by the GIA Alumni Collective™.

Holly Wesche, Stan Razny, Ingrid Razny, Candy Udell
IndependentsJun 02, 2023
These Are the 2023 Retailer Hall of Fame Inductees

This year’s honorees include one of Florida’s largest independent jewelers and two multi-store independents in the Chicago and New York areas.

Jane Taylor letter pendants
TrendsJun 01, 2023
See 50+ Jewels Debuting at Couture in Las Vegas

The industry’s most influential contemporary designers are showcasing their latest jewelry designs.

35-carat lab-grown diamond created by Maitri
Lab-GrownJun 01, 2023
35-Carat Lab-Grown Diamond Going on Display in Vegas

Created by Maitri Lab-Grown Diamonds and graded by IGI, it’s slightly bigger than the record-setting lab-grown diamond GIA just examined.

Bottom Line Marketing Chief Growth Officer Gus Garcia and CEO Jackie Brooks
MajorsJun 01, 2023
Bottom Line Marketing Announces Restructured Leadership, New Service Offerings

The marketing agency has integrated its first C-suite.

20230306_JohnnyCupcakes.jpg
Events & AwardsJun 01, 2023
Meet JCK’s 2023 Keynote Speaker

The jewelry trade show also will debut educational content centered around social media.

Lauren K gold and gemstone rings
TrendsMay 31, 2023
Here’s a Sneak Peek of New Jewelry to Check Out at JCK

Luxury kicks off today, with the full show in swing on Friday.

A pearl pendant and a pearl ring
CollectionsMay 31, 2023
Verragio’s Debut Fine Jewelry Collections Honor Company Heritage

One of the three new collections was inspired by the legend of a woman who traded her mansion to Cartier for two strands of natural pearls.

Rob Ballew
MajorsMay 31, 2023
Signet Jewelers Names New Head of Investor Relations

Rob Ballew will be tasked with communicating the jewelry giant’s plans and financial performance to investors.

Mobile mock-up screens of the new LUX Digital Vault app from Jewelers Mutual Group
MajorsMay 31, 2023
Jewelers Mutual Launches App for Retailers, Introduces New Brokerage

With the app, customers receive a 15-day insurance offer on new purchases while their coverage needs are being evaluated.

Rendering of Lightbox lab-grown diamond store in House of Showfields
Lab-GrownMay 30, 2023
Lightbox Is Testing Out a Trendy Concept Shop in Brooklyn

It is in House of Showfields, a bazaar-style retail space in the borough’s Williamsburg neighborhood.

Attendees at the JCK Las Vegas show
Events & AwardsMay 30, 2023
These Are the Can’t-Miss JCK Talks Education Sessions

From consumer trends to retail technology, these are the JCK Talks sessions that should be on attendees’ radar.

Constance “Connie” Barber Mellon’s David Webb Elephant Clip-Brooch
AuctionsMay 30, 2023
Sotheby’s to Auction Mellon Family Jewelry

Signature pieces from Cartier and David Webb will appear in the June jewelry auction.

Georgie Gleim, Shelly Sergent, and Molly Peterson
Events & AwardsMay 30, 2023
24 Karat Club of Southern California Recognizes 3 Honorees

They will be celebrated at the annual dinner dance and gala in the fall.

Historic and modern photos of diamond grading GIA
GradingMay 26, 2023
State of the Diamond Industry: AI and the Future of Diamond Grading

Gemologists have long used machines in diamond grading but technology has made it possible for them to “learn” how to do it on their own.

Supplier Spotlight Webinar John Pollard and Garry Holloway
Recorded WebinarsMay 26, 2023
Watch: Diamond Cut Quality: The Final Frontier Part 2

Supplier Spotlight Sponsored by IGI

My Next Question webinar series episode on selling lab-grown diamonds
Recorded WebinarsMay 26, 2023
Natural and Lab-Grown Diamonds: What It’s Like to Sell Both

Watch retailers Jeffery Bolling and Bobby Bengivengo discuss employee training, customer education and the sticky subject of future value.

Bulgari necklace set with 118.35-carat unheated Sri Lankan sapphire
AuctionsMay 26, 2023
Piece of the Week: A Bulgari Sapphire and Diamond Necklace

Set with a 118-carat unheated Sri Lankan sapphire, it just sold for $3.4 million at Phillips jewelry auction in Hong Kong.

noamcarver-videoimage.png
Supplier BulletinMay 25, 2023
RAE Fine Jewelry Collection Debuting at JCK Luxury 2023

Sponsored by Noam Carver

Graphic of phishing scheme
TechnologyMay 25, 2023
State of Retail: Why Jewelers Need to Invest in Cybersecurity Now

As cybercrime incidents threaten the industry, jewelers need to know what they’re up against and the best ways to protect their businesses.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy