Signet Sales Increases, Profit Soars to $26M

Signet Jewelers reported that sales for its third quarter rose 10.7 percent year on year to $710.5 million and cost of sales rose 7.2 percent to $480.6 million. Same-store sales rose 10.6 percent. The jeweler increased profit to $26.1 million from only $6 million one year ago.

Signet’s gross margin was $229.9 million or 18.8 percent, a 220 basis point increase from one year ago due in part to lower store occupancy costs and an improved net bad debt to total sales ratio in the U.S. The net bad debt sales ratio was 5.4 percent for the U.S., down from 5.9 percent. In-house customer finance participation in the U.S. division was 61.3 percent, up from 60 percent in 2010. Total gross merchandise margin was down by 50 basis points, with the U.S. division down 40 basis points and the U.K. division was down 80 basis points. Gross merchandise margin was impacted by the higher cost of commodities and a one-time watch promotion in the U.S., largely offset by price increases.

During Signet’s third quarter, the average unit selling price for U.S. division chain-stores rose 12.4 percent to $544. Sales at Kay rose nearly 14 percent to $314 million and the average unit price rose 9 percent to $449; Jared reported an 18 percent jump in sales to $195 million and a 22 percent hike in average unit price to $1,055, and regional brand sales fell 4 percent to $54 million with average selling price up 7 percent to $443. U.K. total sales rose 2 percent to $148 million with the average selling price up by nearly 7 percent to GBP 99. Average unit selling prices rose 5 percent at H.Samuel to GBP 61 and jumped 12 percent at Ernest Jones to GBP 300.

Mike Barnes, Signet’s chief executive, said, strong sales and earnings momentum continued and earnings per share more than tripled. ”Our sustained positive performance is due to the excellent execution of our strategies by our team, and I would like to thank everyone at Signet who contributed to these results. We are pleased with the start of the fourth quarter, and with the majority of our sales ahead of us, believe the superior quality of our in-store experience, our well-tested merchandising programs, and the exciting new advertising support, have us well positioned for the remainder of the holiday season.”

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