Signet Q3 beats on North America sales, raises guidance
Signet Jewelers Limited announced on Tuesday revenues for the third quarter increased 3%, beating company expectations, as sales lifts in North America offset double-digit declines overseas.
The Hamilton, Bermuda-based company reported total sales of $1.6 billion for the quarter ending October 29, up 2.9% "to unusually heightened sales", on the back of "government benefit programs and the company's strategic transformation including marketing initiatives," said the jewelry company in a statement. Same store sales were down 7.6%.
By region, North America sales grew 5.1% to $1.5 billion, while comparable sales declined 7.6%, reflecting higher average transaction value but a lower number of transactions.
International sales were $95.3 million, down 21.2%.
Operating income fell to $48.4 million, compared to $106.9 million in the prior year and GAAP diluted earnings per share fell to $0.60, down from $1.45 last year.
"Our strong third quarter results exceeded guidance and evidence why we believe Signet is uniquely positioned to deliver consistent market share growth and value creation," said Virginia Drosos, chief executive officer.
"Our financial strength and flexible operating model are enabling continued strategic investments that are widening our competitive advantages. We have acquired 22.5 million new customers over the past five years, driving revenue and market share growth, and these customers are younger, more affluent and highly diverse with meaningful lifetime purchasing power. Our team's culture of innovation, agility and rigorous execution continue to drive advantage."
Looking ahead, the company said it has updated its guidance. For the year, it expects sales to sit between $7.77 and $7.84 billion with an operating income of $809 to $850 million.
"We're raising our full-year guidance with confidence in the sustainability of an annual double-digit non-GAAP operating margin, which reflects current business trends and is now inclusive of Blue Nile," said Joan Hilson, chief financial and strategy officer.
"We are entering this Holiday season with the healthiest and most consumer-inspired inventory in our history -- down 2% despite tiering up our Accessible Luxury offering and with clearance at the lowest levels since our transformation began, excluding acquisitions. Today, nearly all of our inventory is immediately available to customers whenever, wherever and however they choose to browse, shop and buy with us which is driving inventory turns nearly double pre-transformation levels."
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