Sales increase for Signet UK, but possible store closures loom.
Signet Jewelers Limited, also known as Signet Group, has announced its Q1 results for the 13 weeks ending April 30 2011.
Highlights from the first quarter show that overall store sales are up 10.2%, with total sales up 10.2% to $887.3m (£543.8m).
Mike Barnes, chief executive officer, said of the results: “We are very pleased with our strong start to the year, leading to record results for the first quarter. Our performance was led by our US division, with the UK division continuing to operate well in a challenging economy. We believe we continued profitable market share gains due to favourable reception to our product offerings as a result of superior quality and craftsmanship, attentive customer service and memorable marketing campaigns. I would like to thank all at Signet that contributed to this great performance.”
Signet believes the momentum gained in Q1 will continue into the second quarter. “We remain well positioned to continue to increase sales productivity and achieve our financial objectives for this year”, concluded Barnes.
Income before income taxes and diluted earnings per share rose to $117.8 million and $0.87, up by 59.0% and 50.0% on last year’s figures.
Signet’s Q1 results for fiscal 2012 show that same-store sales were up 10.2%, compared to a rise of 5.8% in Q1 of last year. Total sales rose to $887.3 million.
In the UK, sales reached $149.3 (£91.5m), 16.8% of Signet’s overall $887.3m. There was 0.2% rise in same-store sales in the UK, reflective of continued slow growth seen in the UK market. In Q4 of last year, sales in for Signet in the UK totalled 20.7% of the group’s overall total.
The UK division’s gross merchandise margin declined by 30 basis points, with the impact of an increase in the cost of commodities, a higher value added tax rate, and currency hedging benefits in Q1 Fiscal 2011 that were not repeated, being largely offset by a number of price increases.
Gross margin also benefited from an improved net bad debt to total US sales ratio compared to Q1 fiscal 2011 and leverage on store occupancy costs in the US division.
The Q1 2012 results have shown that the UK division’s sales were up by 4.5% to $149.3m (£91.5m), down 1.3% at constant exchange rates. Same store sales increased by 0.2%, compared to a decline of 0.2% in Q1 Fiscal 2011.
Signet’s UK stores, which include Ernest Jones and H Samuel, showed positive results but face an uncertain future.
H Samuel achieved sales of $79.5m (£48.7m), with an average price at the till of £61, up 8.9% compared to Q1 of last year. Sales made up for 6.7% of Signed Group’s total.
Ernest Jones saw the average selling price reach £279, an improvement of more than 10%. Total sales for Ernest Jones peaked at $69.8m, (£42.7m).
With a view to store openings and closures in the UK, the group announced that is plans to close 12 of its H Samuel stores andseven of its Ernest Jones premises, bringing the total planned store closures to 19. Last year one store of each retailer was closed.
With the predicted number of closures, Signet’s total UK presence will sit at 522 outlets.