Signet Same Store Sales Drop 7.6%, Quarterly Sales Rise 2.9%

Scott Peters
06 Dec, 2022
New York City

Signet Jewelers Ltd surged 18.7% to $68.61 after the retailer posted stronger-than-anticipated quarterly results.

Sales in the fiscal third quarter ending in October rose 2.9% to $1.58 billion from $1.53 billion a year ago.

Net income in the fiscal third quarter dropped to $28.8 million from $83.9 million and diluted earnings per share fell to 60 cents from $1.45 a year ago.

Total sales in North America increased 5.1% to $1.5 billion and same stores sales declined 7.6% from a year ago reflecting higher average transaction value but fewer number of transactions.

 

Operating Income 

In the quarter, operating income was $48.4 million or 3.1% of sales, compared to $106.9 million, or 7.0% of sales a year ago. 

 

Cash Declined 

Cash and cash equivalents declined to $327.3 million from $1.2 billion a year ago reflecting share repurchases and inventory replenishment, as well as the acquisition of Diamonds  Direct and Blue Nile. 

The retailer also revised higher its non-GAAP operating margin to increase in double-digit, inclusive of the recent acquisition Blue Nile.

 

Dividend 

The company declared a quarterly cash dividend on common shares of 20 cents a share for the fourth quarter of fiscal 2023, payable February 24, 2023 to shareholders of record on January 27, 2023. 

 

Share Repurchase 

The retailer in the quarter repurchased $20.2 million of its shares. 

For the year-to-date, through December 2, the retailer repurchased approximately 5.6 million shares at an  average cost of $70.28 a share or $393.0 million. 

The purchase amount includes $20.2 million during the third quarter and $50 million  from the completion of the accelerated share repurchase program from the fiscal 2022. 

Approximately $570.3 million remains under the Company's multi-year authorization.

 

Guidance & Outlook 

Total sales in the fourth quarter are estimated between $2.59 billion and $2.66 billion and adjusted non-GAAP operating income between $363 million and $404 million. 

Sales in the fiscal year 2023 are estimated between $7.77 billion and $7.84 billion, adjusted non-GAAP operating income between $809 million and $850 million and adjusted diluted earnings per share between $11.40 and $12.0.  

 

Capital Expenditure Plan 

The company lowered its invest plan to $215 million in the current fiscal year after supply chain delays related to differentiated banner investment in stores.