Signet's 1Q Sales +6%, Profit +5% to $97M

Signet Jewelers reported that revenue rose 6.3 percent year on year to $1.06 billion in the first quarter that ended on May 3. Comparable-store sales improved 3.3 percent, while ecommerce sales surged 24.4 percent to $38.7 million. Cost of sales increased 6.2 percent to $648.9 million, while profit improved by 5.2 percent to $96.6 million or $1.20 per diluted share, according to Rapaport.
Gross margin as a percentage of sales was slightly higher at 38.6 percent compared with 38.5 percent one year ago. The value of Signet's inventory increased 6.9 percent year on year to $1.52 billion.
By region, Signet's U.S. division sales rose 5.4 percent to $903.5 million and same-store sales increased 3.2 percent. The retailer observed stronger consumer demand for fashion diamonds, bridal brands and watches. The number of merchandise transactions increased at both Kay and Jared; however, the average merchandise transaction value increased only slightly for Kay stores and declined at Jared. Signet explained that a lower average merchandise transaction value for Jared was driven primarily by sales mix, including higher bead sales. Signet opened 18 new Jared Vault stores in outlet centers, which were converted from Ultra Diamonds stores.
In the U.K., revenue improved 3.2 percent in local currency, which at $151.7 million, translated into a 12.4 percent improvement. Same-store sales rose 4.1 percent. Sales increases were driven primarily by fashion jewelry, bridal brands and fashion watches. The number of merchandise transactions increased primarily due to beads and gold jewelry sales at H.Samuel and fashion watches at Ernest Jones. The average merchandise transaction value declined.
Mike Barnes, Signet's CEO, said, "We were very pleased with our quarterly results, which were driven by the excellent execution of our associates and resilient customers who shopped our great merchandise offerings. I would like to thank all Signet associates for their contributions to these results.
"We remain pleased with our performance for the first several weeks of May, including Mother's Day. Customers have responded favorably to our new products and fresh collections, particularly in fashion jewelry. While we expect to end the quarter with mid-single digit comps, our performance in the second quarter to date has actually been higher than that including a strong Mother's Day. Our team's consistent ability to execute our initiatives by focusing on our competitive strengths leaves us well-positioned to achieve our objectives this year," he said.