Signet Jewelers has reported a slump in same-store sales for the fourth quarter fiscal 2017.
In a report on the company’s sales for the nine weeks ended January 28, 2017, Signet reported a 3.8% drop in same stores sales to $227.6m (£187m) across the UK jewellery division, which encompasses Ernest Jones and H. Samuel.
H Samuel and Ernest Jones same store sales dropped to $119.7m (£98m) and $107.9m (£88.7m) respectively.
The UK divisions average transaction value increased by 8.0%, and the number of transactions decreased 11.8%. Signet attributes this decline to lower sales in fashion jewellery, fashion watches and gifts, but says this was partially offset by stronger sales of prestige watches and bridal jewellery.
Elsewhere gross margin dollars in the UK Jewellery division decreased to $26.6m (£21m). The gross margin rate decreased 220 basis points driven principally by deleverage on lower sales and lower merchandise margins due to increased promotional activity.
Overall Signet’s total sales were $2,269.9 million (£1866m), down 5.1%, compared to an increase of 5.1% in the 13 weeks ended January 30, 2016 (“fourth quarter Fiscal 2016”). Same store sales decreased by 4.5%.
Mark Light, chief executive officer of Signet Jewelers, comments: “Signet had a challenging fourth quarter and fiscal year, but we delivered top-and-bottom lines for the fourth quarter within our revised expectations. This was driven principally by performance from select categories and collections including diamond fashion jewelry, bracelets, and earrings.
“We are adapting to a challenging retail environment and weak mall traffic. Given the importance of an omni-channel experience to jewelry customers, we have an intensive focus on an omni-channel approach to customer service supported by a significant increase in resources directed to our digital ecosystem. We have re-aligned our executive organization structure to sharpen our focus on our customers’ channel preferences. And we are making greater technology investments to improve customers’ on-line experience. Going forward, our digital marketing and presence on-line will be more pronounced than ever.”
The fourth quarter results led to Signet announced total sales were down 2.2% to $6,408.4m (£5,268m) in fiscal 2017 financial year. Merchandise categories and collections were broadly lower most notably in the mall selling channel, while select merchandise and selling channels performed relatively well such as diamond fashion jewellery, bracelets, earrings, and the off-mall and kiosk selling channels. E-commerce sales in the fiscal year were 1.0%.
The UK jewellery division’s same store sales increased 0.1%. Average transaction value increased 6.0% and the number of transactions decreased 6.3%. Higher sales of bridal and prestige watches was virtually offset by lower sales in other categories.