Signet Revenue Drops in First Quarter

RAPAPORT... Signet Jewelers has lowered its sales outlook for the restof the year, after revenue fell in the first fiscal quarter. Total sales declined 3.3% to $1.43 billion in the threemonths ending May 4, the retailer reported Thursday. Same-store sales -at branches open for a year or more - slipped 1.3%.Signet now expects sales of $6 billion to $6.06 billion forthe current fiscal year ending January 2020, compared with its previousforecast of $6 billion to $6.1 billion. Same-store sales will decrease by 1.5%to 2.5%, it predicted, whereas it previously estimated they would range from a2.5% decline to flat. "Given the sales trends we experienced year to date, andsoftening retail traffic, we are narrowing our fiscal-2020 guidance, whilecontinuing to expect strong progress on cost savings across our business," saidSignet CEO Virginia Drosos. Sales in North America slid 3.5% to $1.3 billion, withdeclines at Kay Jewelers (-1.4%), Zales (-4.4%) and Jared (-4.7%). Legacycollections such as Ever Us and Le Vian recorded slowdowns, as did non-brandedbridal jewelry. Sales of new merchandise increased, with stronger performancesin the Enchanted Disney Fine Jewelry, Vera Wang Love, Neil Lane and Leocollections. The company is working on contingency plans to combat theimpact of potential 25% US tariffs on jewelry imports from China, Drosos said inan investor call following the release of its results. The higher rate couldaffect retail prices for its US customers, as China accounts for about 30% ofSignet's merchandise spending, she noted. E-commerce sales rose 5.3% to $154.3 million, contributingabout 11% of revenue, compared with 10% a year ago, the jeweler added. The company's net loss narrowed to $10 million for the year,versus a loss of $496.6 million a year earlier. Image: A Kay Jewelers store in New Jersey. (Shutterstock)