Brands and bridal drive up Signet UK sales

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Like-for-likes up 2.1% with Ernest Jones leading the charge.

Signet’s UK sales dropped 1.7% to US$152 million (£95.7m) in the 13 weeks to July 28, although same stores sale increased 2.1%, said to be driven by sales of bridal jewellery and branded watches and jewellery.

In the UK Ernest Jones, incorporating Leslie Davis, exhibited the largest increase in same-store sales, up 4.4%, while H Samuel sales crept up just 0.1% in Q2. H Samuel’s sales totalled $78.7 million (£49.6m), while Ernest Jones were $73.3 million (£46.2m).

In the financial year to date Signet has closed eight H Samuel stores this year and six Ernest Jones branches.

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Gross margin in the UK fell by US$4.9 million (£3.1m) compared to Q2 2011, said to be a result of a decrease in gross merchandise margin of 210 basis points caused by customers’ preference for promotional merchandise and merchandise mix, which were partially offset by lower store occupancy expenses.

In the UK division, operating loss was US$300,000 or 0.2% of sales as compared to operating income of US$2.8 million (£1.8m) or 1.8% of sales in the second quarter of fiscal 2012.

Total Q2 sales at the watch and jewellery retail group worldwide rose 7.1% US$853.9 million (£537.8m) compared with $797.6 million in Q2 last year. Operating income rose 8.4% to US$110.9 million (£69.9m). Gross margin was $311.2 million (£196.1m) or 36.4% of sales as compared to $294.8 million (£185.7m) and net income for Signet as a whole was $70.7 million (£44.5m).

Signet’s e-commerce sales were US$24.2 million (£15.3m) in Q2 compared, up 39.9% on 2011’s Q2 sales of US$17.3 million (£10.9m).

Signet chief executive Mike Barnes said: “We delivered strong second quarter results driven by a 12.5% increase in same store sales at Kay [in the US] and positive same store sales in the UK.

“This combined with expansion in operating margin drove a double digit increase in earnings per share. As we begin the second half of the year, we remain focused on delivering an exceptional customer experience with exciting merchandise programs, new enhanced marketing programs, and further development of our digital sales capabilities; as always, driven by our talented team. We believe these strengths leave us well positioned to deliver our objectives for the year.”

Looking ahead, Signet said it expects same-store sales in the third quarter to be in the low to mid single digit range.

The third quarter results for the 13 weeks ending October 28 2012 are expected to be announced on Tuesday November 20.

 

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