Signet Jewelers sales fall 35% despite strong e-commerce gains
As the international jewelry retailer continues its accelerated transition to a more digitally focused model due to the coronavirus pandemic, Signet Jewelers Limited made solid progress in e-commerce in Q2, but still posted a 34.9% drop in total sales.
For the second quarter ended August 1, 2020, Signet's total sales were $888.0 million, down from $1.36 billion in the prior-year period. In constant currencies, the decline was 34.8%, while total same store sales fell 31.3%.
E-commerce sales totaled $270.1 million, increasing 72.1% year over year and partially offsetting a decline of 46.0% in brick-and-mortar revenues. Having temporarily closed as a result of the Covid-19 pandemic, 90% of Signet’s current store fleet has now reopened.
Signet, which, among other banners, owns Kay Jewelers, Zales and Jared in the U.S., and H.Samuel and Ernest Jones in the UK, saw decreases in revenue in both its North American and international businesses during the quarter.
In North America same store sales fell 72.7%, reflecting a 45.3% decline in brick-and-mortar sales, partially offset by a 72.7% increase in e-commerce revenues. International same store sales decreased 38.8%, with brick-and-mortar sales dropping 54.6% and e-commerce revenues growing 65.6%.
Quarterly net loss at the company totaled $90.0 million, or $1.73 per diluted share, compared to a loss of $44.3 million, or $0.86 per diluted share, in the same period in the previous year.
In June, Signet announced that it would be permanently closing a total of 380 stores in an effort to optimize its fleet as part of its shift towards a more digital emphasis. As of the end of Q2, the retailer has shuttered 293 of the locations slated for closure, ending the quarter with a total of 2,915 brick-and-mortar stores.
The company has also made investments in virtual sales, implementing a full-time virtual selling team and equipping some 15,000 store associates to engage in virtual selling, either from home or in store.
“In response to Covid-19 impacts, we quickly pivoted to accelerate our OmniChannel transformation while also focusing on cash preservation,” explained Signet CEO Virginia C. Drosos in a release. “This allowed us to further invest in 'digital-first' initiatives, including new virtual selling capabilities. In the second quarter, we served more than 300,000 customers through virtual consultations which achieved higher than historical conversion rates.”
In the first half of the year, Signet achieved net sales of $1.74 billion, down from $2.80 billion in the prior-year period.
The company’s first-half net loss came to $295.3 million, or $5.69 per diluted share, compared to a loss of $62.5 million, or $1.21 per diluted share, in the same six-month period in the previous year.
Due to continued uncertainty about the ongoing health crisis, Signet Jewelers has not provided financial outlook for the third quarter or full fiscal year.
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