Signet Q2 earnings, sales well above forecasts; CFO stepping down
The owner of Kay Jewelers, Zales and Jared and other jewelry chains reported earnings and sales that blew past analysts’ estimates amid double-digit online growth and strong sales at most of its banners.
Signet also reported that CFO Michele Santana will leave the company in 2019 to pursue other opportunities. The retailer has started an external executive search and expects to appoint a new finance head by the end of its fiscal year. Santana will continue as CFO until her successor is appointed.
Signet reported a net loss of $31.2 million, or 56 cents a share, in the quarter ended Aug. 4, compared to earnings of $85.2 million, or $3.133 a share, in the year-earlier period. But earnings per share came to 52 cents, easily topping the 20 cents analysts had expected.
Revenue rose to $1.42 billion from $1.39 billion in the year-earlier period, ahead of the analysts’ expectations of $1.34 billion. Online increased across all retail brands and accounted for 10.6% of second quarter sales, up from 5.9% in the year-ago quarter.
Same-store sales rose 1.7%. Analysts had expected a decline of 4.5%. Same-store sales rose 7.1% at Zales, 11.5% at Piercing Pagoda, and 1.2% at Jared. Same-store sales fell 2.1% at Kay.
In March, Signet announced a three-year restructuring plan (“Path to Brilliance”) to revive the company and drive long-term profitability. It includes significant investments in e-commerce and marketing along with innovation in product assortment and the store experience.
“While it is still early in our journey, we are encouraged by our improving year-to-date performance as we execute against our Path to Brilliance transformation plan,” said Virginia C. Drosos, CEO. “During the second quarter, we continued to see stabilization in same store sales, and we remain confident that we have the right strategies in place to continue to drive operational improvement over the long-term. To reflect our improved second quarter performance, we are modestly raising our revenue and earnings guidance for the year.”
Signet said it now expects fiscal 2019 adjusted earnings per share of $4.05 to $4.40, up from prior guidance of $3.75 to $4.25. Its projected sales range is $6.2 billion to $6.3 billion, compared with previous guidance of $5.9 billion to $6.1 billion.