Signet Beats Expectations in Q4, Leans on Online Sales

Akron, Ohio—Signet Jewelers Ltd. ended its fiscal year on a high note, posting double-digit growth in ecommerce sales and topping analyst expectations for fourth-quarter revenue and same-store sales growth.

In the months ahead, however, the giant specialty jeweler—like so many brick-and-mortar businesses—faces unprecedented challenges as it figures out how to survive the potentially long-term shuttering of most of its stores.

In the fourth quarter ending Feb 1., sales totaled $2.15 billion, down 0.1 percent year-over-year, with same-store sales up 2 percent.

Analysts expected $2.12 billion in revenue and same-store sales growth of 1 percent.

For the full year, sales totaled $6.1 billion, down 2 percent, with same-store sales up 1 percent.

On an earnings call Thursday morning, CEO Virginia Drosos said the company’s holiday momentum continued through the fourth quarter, with strong Valentine’s Day sales and a positive response to its marketing.

Now, with all its 2,800 locations in North America temporarily closed in response to the coronavirus pandemic, Signet must cut costs and lean on online sales in order to navigate the crisis.

“We’re leveraging the expertise of our digitally native banner JamesAllen.com to rapidly advance our online selling assistance tools across all of our banners,” said Drosos.

“To achieve immediate ecommerce impact, we are focused on enhancing search and browse, easier checkout, and even more advanced custom design capabilities to create an optimized and frictionless shopping experience for customers,” she added.

Ecommerce sales in the fourth quarter grew 15 percent to $299.9 million, accounting for 14 percent of all sales, up from 12 percent last year, while brick-and-mortar sales grew 1 percent.

Full-year ecommerce sales were up 10 percent, clocking in at $750.4 million and accounting for 12 percent of sales, up from 11 percent last year, while brick-and-mortar sales dipped 1 percent.

In North America, where Signet’s banners include Kay, Jared and Zales, fourth-quarter same-store sales grew 3 percent, ecommerce sales 15 percent, and brick-and- mortar same-store sales 1 percent, with growth seen across all mall-based banners.

For the full year, North American same-store sales were up 1 percent, ecommerce sales 11 percent, and brick-and-mortar same store sales down 0.2 percent.

The bridal and fashion category did particularly well on a same-store sales basis for the quarter and the full year, which the company attributed to its new collections, “Center of Me” and “Marilyn Monroe.”

The percentage of sales from new merchandise increased for the full year, particularly its Center of Me and “Love +