Financials

Signet Raises Guidance Again, Expands Selection of Lab-Grown Diamonds

FinancialsDec 02, 2021

Signet Raises Guidance Again, Expands Selection of Lab-Grown Diamonds

Its additions include an exclusive lab-grown diamond cut for Zales’ “Vera Wang True” line and a lab-grown option for Kay’s “Leo” cut.

An 18-karat white gold 1 3/8-carat emerald-cut diamond engagement ring from the Monique Lhuillier Bliss collection at Signet Jewelers’ banner Kay Jewelers. The collection has performed well since its launch, according to the company’s recent quarterly results.
Akron, Ohio—Signet Jewelers Ltd.’s third-quarter sales climbed double digits, encouraging the jeweler to up its guidance for the fiscal year once again.

In the third quarter ending Oct. 31, total sales were up 18 percent to $1.54 billion with same-store sales climbing 19 percent.

Compared to the third quarter of fiscal 2020, pre-pandemic, total sales were up 29 percent with same-store sales rising 37 percent. 

Year-to-date, Signet’s sales have totaled $5.01 billion, up 65 percent year-over-year.

Quarterly brick-and-mortar same-store sales rose 20 percent year-over-year in the third quarter and were up 29 percent compared with pre-pandemic levels. 

Online sales increased 14 percent year-over-year to $273.1 million. When compared with pre-pandemic levels, online sales have nearly doubled, jumping 96 percent.

“While uncertainties remain in the macro environment, our strategies are working, as evidenced by strong conversion rates and higher average transaction value,” Signet Jewelers CEO Gina Drosos said in a press release on the Q3 results.

“We have built a healthy operating structure enabling transformative investments that are attracting new customers and driving loyalty. Our data-driven customer insights and planning helped us secure earlier receipt of our holiday assortment and ensure no significant disruptions to our supply chain or labor needs.”

Signet Jewelers is cutting costs, expecting to see a four-year cumulative saving of $400 million through the end of fiscal 2022, but it’s also investing in technology to bolster its efficiency.

During an earnings call Thursday morning, Drosos described its data-driven labor model that plans out staffing needs, noting productivity is up 75 percent.

The company is also using a digital simulation of its supply chain to cut back on shipping delays and other logistical issues.

Signet is upping its distribution capacity by 25 percent, said Drosos, including adding local distribution points via its ship-from-store option.

After introducing a buy online, pick-up in store service last year, the jeweler has since expanded the program to 2,100 locations, Drosos said.

The investments have extended to its employees via a raise in wages, expanded benefits, training and development opportunities, and career growth, she said. 

In North America, where Signet’s banners include Kay, Jared and Zales, same-store sales rose 20 percent year-over-year, and were up 39 percent compared with pre-COVID levels.

Brick-and-mortar same-store sales climbed 22 percent compared with last year and were up 31 percent compared with pre-pandemic levels. 

Online sales in the region rose 15 percent compared with last year and nearly doubled, up 98 percent, when compared with before COVID.

The average transaction value increased 15 percent year-over-year, with the number of transactions up 4 percent.

In the U.K., same-store sales were up 9 percent compared with last year and up 18 percent compared with pre-pandemic levels.

Brick-and-mortar U.K. sales rose 9 percent year-over-year, and were up 18 percent when compared with before COVID. E-commerce sales increased 9 percent year-over-year and were up 72 percent compared with pre-pandemic levels.

Average transaction value dipped 4 percent while the number of transactions rose 13 percent year-over-year.

“Our merchandising teams have used our data to build and tier our [lab-grown diamond] assortment in a way that doesn’t compete with natural stones.” — Signet CEO Gina Drosos

Looking at sales by category, Signet’s bridal sales climbed 14 percent year-over-year in the quarter and are up 58 percent in the first nine months of the year.

Fashion jewelry sales were up 30 percent in the quarter and 85 percent in the nine-month period. Watch sales rose 38 percent in the quarter and 65 percent in the nine-month period.

Sales in the “others” category, which includes repairs, gifts, and other non-jewelry items, dipped 1 percent year-over-year, but were up 40 percent in the nine-month period.

Signet has expanded its assortment of lab-grown diamonds, Drosos said on the call.

“Our merchandising teams have used our data to build and tier our [lab-grown diamond] assortment in a way that doesn’t compete with natural stones,” she said.

For select styles, customers can choose a lab-grown stone with higher carat weight or clarity.

In addition, there will be an exclusive lab-grown diamond cut introduced into Zales’ “Vera Wang True” line and a lab-grown diamond option for Kay’s “Leo” cut through its “Leo Legacy” line.

 Related stories will be right here … 

Breaking down Signet’s Q3 performance by banner, Kay Jewelers posted quarterly sales of $573.4 million, up 17 percent year-over-year and up 67 percent in the first nine months of the year.

Zales posted quarterly sales of $291.9 million, up 16 percent year-over-year and up 66 percent in the nine-month period.

“Kay and Zales are appealing to increasingly differentiated consumer segments,” said Drosos.

While both banners attract bridal customers, almost 30 percent of new Zales customers are looking to buy jewelry for themselves, up 4 percent compared with two years ago.

At Kay, 65 percent of new customers are making a milestone purchase or buying a gift, 7 percent higher than two years ago.

“We plan our assortments with these journeys as our compass. We’re able to introduce newness with much better success rates because our customers are more precisely defined and because our assortments are relevant to the journey our customers are on,” said Drosos.

The new Monique Lhuillier x Kay Jewelers collection, launched at the end of September, has generated $2 million in sales.

At Jared, quarterly sales were up 19 percent to $277.1 million and up 60 percent in the nine-month period.

A new loyalty program, Vault Rewards, is being tested out at select Jared stores and is expected to roll out to all Signet banners, said Drosos.

The program gives customers exclusive discounts, a trial membership to newly acquired jewelry rental subscription service Rocksbox, and unlimited jewelry cleaning while Signet learns more about its customers.

Piercing Pagoda saw sales increase 19 percent in the quarter and nearly double in the nine-month period, up 95 percent.

The kiosk-centric brand recently underwent a name change, now called Banter by Piercing Pagoda.

E-tailer James Allen posted quarterly sales of $90.4 million, up 18 percent year-over-year and up 63 percent in the nine-month period.

Signet recently acquired Diamonds Direct but said it will include its results within the company’s North America segment rather than reporting it as a separate banner.

As for the possibility of new acquisitions, Chief Financial Officer Joan Hilson said the company’s main priority is growth investments.

“We always stay open-minded to what might be another way to bring new capabilities, especially new opportunities to learn,” she said on the call.

Looking at its store count, Hilson said the company expects to close 75 stores across its banners in fiscal 2022 and open 85 stores.

Most of the openings will be Banter by Piercing Pagoda locations, due to its strong-than-expected performance in select locations and favorable leases.

For the fiscal year ahead, Signet upped its financial guidance again, noting that the company’s sales momentum continued through Black Friday and Cyber Monday.

Signet is expecting revenue to reach $7.41-$7.49 billion, compared with its prior guidance of $7.04- $7.19 billion. 

Same-store sales are expected to grow 41 to 43 percent, up from its prior guidance of 35 to 38 percent.

Looking to the fourth quarter, revenue is expected to reach $2.40-$2.48 billion with same-store sales growth in the range of 6 to 9 percent.

Signet’s updated guidance depends on a variety of factors, including the “magnitude and duration of COVID-19,” particularly the Omicron variant, and the degree of the shift of consumer discretionary spending away from jewelry to more experience-based purchases, it said.

Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

MajorsNov 29, 2022
LVMH Acquires Jewelry Manufacturer Pedemonte Group

The strategic acquisition will bolster the luxury titan’s production capacity in its watch and jewelry division.

CollectionsNov 29, 2022
Alex and Ani Founder Carolyn Rafaelian Has Launched a Fine Jewelry Line

The new brand, Metal Alchemist, focuses on unisex, classic jewelry designs.

IndependentsNov 29, 2022
Reinhold Jewelers’ Holiday Book Is an Ode to an Important Beverage

The 2022 edition of the retailer’s annual publication pays homage to the coffee farms and shops of Puerto Rico.

Brought to you by
Knowledge and Skills for Today’s Hot Topics

From laboratory-grown diamonds to design to country-of-origin, GIA's Alumni Collective™ has a seminar to suite your needs.

CollectionsNov 29, 2022
Gabriel & Co.’s ‘Fashion Book’ Is Out

Not a catalog, the magazine is a tool for Gabriel & Co. retailers to connect with their customers.

Weekly QuizNov 18, 2022
This Week’s Quiz
Test your knowledge of the latest jewelry news with this quick test.
Take the Quiz
MajorsNov 29, 2022
Claire’s to Open Shop-in-Shops in Select U.S. Macy’s Stores

The partnership brings Claire’s jewelry and accessories to 20 Macy’s locations in time for the holiday season.

MajorsNov 28, 2022
Pomellato’s New Videos Raise Awareness of Violence Against Women

Starring CEO Sabina Belli and other celebrities, the videos emphasize the importance of supporting women who have experienced abuse.

Brought to you by
Diamond Shoppers’ 2022 Holiday Wish List

Give your customers the best diamond buying experience this holiday season.

IndependentsNov 28, 2022
Bert Kalisher, an Industry Veteran Who Loved Making Connections, Dies at 97

Kalisher started out manufacturing watch bands and later got into publishing, authoring two books and serving as publisher of Chronos.

Events & AwardsNov 28, 2022
Registration Is Open for AGA’s Annual Tucson Conference

Scheduled for Feb. 1, the event will feature six gemological education presentations and three hands-on sessions.

MajorsNov 28, 2022
The Kingswood Co. Is One of U.S.’s Fastest-Growing Companies Again

The jewelry cleaner manufacturer jumped up to No. 3066 on the Inc. 5000 list.

AuctionsNov 23, 2022
This Sapphire Tiara Once Owned by a Danish Princess Is Going to Auction

The Dec. 1 jewelry sale at Bonhams-owned Bruun Rasmussen will have several other pieces of royal jewelry on the block.

MajorsNov 23, 2022
De Beers Jewellers Is Popping Up in Connecticut

The temporary store is the result of a collaboration with Betteridge.

CollectionsNov 23, 2022
Piece of the Week: Rembrandt’s Turkey Charm

Charm fans will gobble up this festive “Piece of the Week” pick.

AuctionsNov 22, 2022
Jewelry Recovered from Sunken ‘Ship of Gold’ Heads to Auction

The S.S. Central America sank in 1857 off the coast of South Carolina, carrying tons of gold from the California Gold Rush.

IndependentsNov 22, 2022
See the Greek Jewels Going to Auction for Charity

Several Greek jewelry designers have donated pieces to the annual Hellenic Initiative silent auction.

Events & AwardsNov 22, 2022
Hodinkee to Receive Gem Award for Watch Excellence

Plus, see this year’s list of nominees for the Jewelry Design, Media Excellence, and Retail Excellence awards.

SourcingNov 22, 2022
Head of Australian Miner Burgundy Diamond Resigns

The company announced the resignation of Peter Ravenscroft late last week, effective immediately.

SourcingNov 21, 2022
Provenance Proof Launches Online Marketplace for Traceable Gems

Debuting today, it is open to Provenance Proof blockchain users.

TechnologyNov 21, 2022
Version 2.0 of the NDC’s ‘Assure’ Directory Is Now Live

Assure is the program the Natural Diamond Council launched in 2019 to test lab-grown diamond screening devices.

MajorsNov 21, 2022
JK Findings Acquires Intercept Silver & Jewelry Care

Intercept Silver & Jewelry Care distributes anti-corrosion and anti-tarnish products.

MajorsNov 21, 2022
David Yurman Just Opened a Palm Beach Outpost

It’s located on famed shopping street Worth Avenue.

EditorsNov 18, 2022
9 of My Favorite Pieces from the AGTA Spectrum Awards Editors’ Day

Senior Editor Brecken Branstrator’s highlights include a chrome tourmaline ring, a giant opal necklace, and an American mined stone.

CrimeNov 18, 2022
Jewelry Store Security Guard Killed in Armed Robbery

Police in Calumet City, Illinois are looking for several suspects involved in the robbery of a jewelry store in the River Oaks Mall.

MajorsNov 18, 2022
AGS Adds Sumit Dangi to Board of Directors

Dangi is global chief financial officer and treasurer at Jewelers Mutual Group.

CollectionsNov 18, 2022
Piece of the Week: Tabayer’s ‘Oera’ Pendant

The brand’s signature shape is rendered in an autumn-appropriate color palette.

GradingNov 17, 2022
GIA Labs Report Receiving 2 Moissanites Submitted as Diamonds

The discoveries were outlined in the Lab Notes section of the fall 2022 issue of Gems & Gemology.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy