Signet Jewelers Says Weddings Will Hit a 40-Year High This Year
Signet Jewelers Says Weddings Will Hit a 40-Year High This Year
(Bloomberg) -- The owner of Kay Jewelers and Zales expects to further expand its market share this year, in part on the largest number of weddings in 40 years as pandemic-delayed couples rush to the altar.
“Weddings are back,” Signet Jewelers Ltd. Chief Executive Officer Gina Drosos told analysts during an earnings call Thursday. The company bases its matrimonial outlook on internal research and data on bookings at venues. Signet has an estimated 30% of the bridal jewelry market in the U.S.
Drosos said later in an interview that Signet doesn’t foresee trouble sourcing diamonds to meet the growing demand, despite the company’s ban on buying stones mined in Russia.
“If we don’t buy Russian diamonds ourselves and if we require our vendors to also certify that they are not buying new Russian diamonds, we still have sufficient supply for the year and into the holidays,” she said.
Last week, Signet told suppliers it will stop buying diamonds and precious metals that originate in Russia, the world’s biggest source of gems.
Most of Signet’s diamonds by value come from southern Africa, Australia and Canada, Drosos said, adding that she hasn’t seen a significant impact on the price of diamonds originating in those countries since Russia’s invasion of Ukraine.
Despite the potential economic damage from the war, Drosos said she expects Kay Jewelers, Zales and Signet’s other brands to continue to expand market share this year in the fragmented jewelry industry.
The company said it expects revenue in the current fiscal year of $8.03 billion to $8.25 billion, which would top analysts’ expectation of $7.89 billion. Signet also said it’s increasing its quarterly dividend to 20 cents a share for the first quarter, from 18 cents.
Signet shares were up 7.2% at 1:40 p.m. in New York. The stock had slipped 11% this year through Wednesday.
Hamilton, Bermuda-based Signet expanded its share of the U.S. jewelry market to 9.3% in 2021, a gain of 270 basis points compared with the previous year. This year, consumers’ discretionary spending is likely to decline as more people shift their dollars to travel and other activities as the pandemic fades, executives said.
While that could be a drag on demand for jewelry overall, Drosos said Signet will be able to counter that dip and seize on the expected surge in the number of people getting married.
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