Signet’s Q4 Same-Store Sales Sink 10%

FinancialsMar 20, 2024

Signet’s Q4 Same-Store Sales Sink 10%

The jewelry giant also posted a double-digit drop in same-store sales for the full year.

Tanzanite white gold ring Jared
A 14-karat white gold cushion-cut tanzanite ring ($15,000) from Signet Jewelers-owned banner Jared. Signet struggled in the fourth quarter and the full year as the bridal market continues its recovery.
Akron, Ohio—Signet Jewelers Ltd. posted declines in total revenue and same-store sales for the fourth quarter and fiscal year 2024 due to softness in the market for engagement rings and a slow holiday season. 

The retailer, which is the parent company of several large jewelry store chains including Zales, Jared, and Kay Jewelers, has been hit by the lull in engagements following the COVID-19 pandemic, but said it expects to see incremental improvements in the coming years.

“We’re seeing engagements recover as we expected they would,” CEO Virginia C. Drosos said on an earnings call Wednesday morning, noting there will be a “gradual, incremental improvement in trends over the next three years.”

She predicted U.S. engagement rates in fiscal 2025 will increase 5 to 10 percent compared with fiscal 2024, though they are off to a slow start so far.

Engagements were down low-to-mid single digits in Q1 of this fiscal year, Chief Financial Officer Joan Hilson said on the call Wednesday.

The decline in the bridal market took a toll on sales.

For the quarter ending Feb. 3, Signet’s sales totaled $2.5 billion, down 6 percent year-over-year. Same-store sales were down 10 percent.

The company noted it lost approximately $25 million in sales due to its recent sale of 15 Ernest Jones stores to Watches of Switzerland. 

For the full year, sales totaled $7.2 billion, down 9 percent year-over-year. Same-store sales were down 12 percent.

In addition to soft engagement ring sales, the company had a slow holiday season.

“As anticipated, we saw a late shopper this holiday,” said Drosos, noting customers were holding out for deals, particularly since there was an extra weekend in December.

She also said the industry was “overstocked,” leading to a lot of markdowns. 

It was a similar situation for Valentine’s Day, Drosos said, with “value-motivated” shoppers heading to stores late.

“We believe consumers will remain focused on value this year,” she said.

Same-store sales, however, are expected to improve through fiscal 2025, Drosos said, driven in part by engagement recovery, the acquisition of new customers, and new products.

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Looking to its sales in North America, where banners include Zales and Kay Jewelers as well as Peoples in Canada, the company struggled with technical difficulties.

Signet’s fourth-quarter sales in the region totaled $2.4 billion, down 6 percent year-over-year. 

Same-store sales were down 10 percent, due in part to an integration issue at its digital banners (James Allen and Blue Nile), which led to fulfillment issues in the second half of the quarter.

The company is working to resolve these issues, said Drosos, but they have continued into fiscal 2025.

For the full-year, North American sales totaled $6.7 billion, down 8 percent year-over-year, while same-store sales fell 12 percent.

Signet’s international banners include Ernest Jones and H. Samuels.

International sales in the fourth quarter totaled $141.7 million, down 8 percent year over-year. Same-store sales were down 1 percent in the quarter.

For the full year, international sales totaled $430.7 million, down 8 percent year-over-year. Same-store sales were down 5 percent.

The company closed 30 Ernest Jones locations as it looks to “right-size” its footprint.

Though engagement ring sales struggled, the company found success in low-priced fashion jewelry, said Drosos.

Banter (formerly Piercing Pagoda) had the strongest same-store sales in the United States in Q4, coming in nearly flat, while Peoples in Canada and H. Samuels in the U.K. saw positive holiday same- store sales.

Signet’s services category was also a highlight, said Drosos, outperforming its merchandise. 

The category will remain a key area of growth this fiscal year, she said, as it explores B2B services with independents and insurance companies.

As for its store fleet, the company closed 114 locations, mainly low-performing mall-based stores and U.K. locations, bringing its total to around 2,700 locations.

The company plans to invest in 20 to 30 new stores as well as nearly 300 renovations, focusing on Kay, Jared, and Diamonds Direct locations, as well as its e-commerce capabilities and digital and technology advancements, backed by around $160 million to $180 million in planned capital expenditures.

Looking ahead, Signet expects first-quarter sales to be $1.47 billion to $1.53 billion, with same-store sales down between 7 and 11 percent.

Full-year sales are projected to be $6.66 billion to $7.02 billion, with same-store sales down 5 percent to up less than 1 percent.

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