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Signet Comps Rocket; Investors Eye Stock Growth June 14, 2021 (0 comments)

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Akron, OH—Comparable-sales for Signet’s stores rocketed an impressive 27.2% over 2019 sales in the first quarter of fiscal 2022, which ended in May, and an increase of more than double the same period last year, when the jeweler’s stores—along with most of the rest of the country—was in lockdown. Compared to last year, e-commerce sales were up 110.3% and total brick-and-mortar sales were up 105.7%. Image: SIgnet CEO Gina Drosos

In actual numbers, the company posted $1.7 billion in sales for the 13-week period ending May 1. That represents an $835 million leap from 2020 but, more importantly, an increase of over $250 million from the same period two years ago, when business was in a normal phase. CEO Gina Drosos noted in her earnings summary that the numbers also are coming from 400 fewer stores (across all banners) than the company had in 2019. 

As a result, the company’s stock rose 14%. Wells Fargo analyst Ike Borochow was enthusiastic about the retailer’s proven ability to run leaner, including closing underperforming stores, boosting its online presence, and a data-driven, leaner inventory approach with more newness and fewer markdowns. 

All of Signet’s U.S. banners delivered double-digit revenue growth compared to two years ago, said Drosos, noting that new customers drove close to 2/3 (60%) of business for flagship brands Kay and Zales in the quarter. Its U.K. division, however, did not fare as well; comps there fell 12.2%.

"Our strong first quarter results demonstrate the momentum we are building as we continue Signet's transformation," said Drosos. "Thank you to all our team members for their relentless dedication to our customers and each other, and for embracing new capabilities with excellence as we drive innovation and sustainable long-term growth." 

"We delivered strong performance across our portfolio. While the jewelry category is experiencing meaningful growth, we are outpacing market growth and gaining share consistent with our Inspiring Brilliance strategy. Specifically, we are winning in our biggest banners through consumer-inspired differentiation, as evidenced by double-digit revenue growth in both Kay and Zales versus this time two years ago. We are successfully beginning to stretch the top and bottom boundaries of the mid-market as Jared continues to grow at higher price points and in custom design, and Piercing Pagoda delivered its best quarter ever accessing more value inspired self-purchasing shoppers.  Further, our Connected Commerce strategy is resonating, delivering higher conversion rates and growth both online and in-stores. And finally, we are building a more innovative and agile culture with investments in talent, digital capabilities, newness in product assortment, and modern content and marketing channels that give us distinct competitive advantages. As I look ahead, I'm confident in our people and our strategy and believe 2021 will be another transformative year for Signet."

The company’s upscale Jared chain is doing well with bigger diamonds and brands, said Drosos. In particular, its Chosen Platinum, Pnina Tornai, and Royal Asscher lines are performing well. The Jared division also announced a variety of initiatives earlier this year—like custom design—that will bring it more directly into competition with upscale independent jewelers. Zales, too, is focusing on adding contemporary jewelry designers like Alexis Mazza and Sarah Graham that have traditionally been the mainstay of independents.

Related: As Signet Successfully Expands Beyond Mall Mainstay to E-Commerce, Its Next Goal Is Affordable Luxury And Designer Jewelry

Finally, Drosos offered an upbeat but cautious outlook moving into the second quarter and the rest of the year, warning that consumers emerging post-pandemic may shift spending back to experiences they’ve been unable to have for the past 16 months.

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