Jeweler Signet Climbs on Surprise Profit as Holiday Begins
(Bloomberg) -- Signet Jewelers Ltd., the owner of Jared and Kay, rose after reporting a surprise profit and a robust start to the critical holiday season.
The company, which also owns Zales, posted earnings per share excluding some items of 11 cents for the third quarter ended Oct. 31. That’s well above the 66 cent loss analysts had been expecting. Comparable sales rose 15.1%. The company also said on Thursday it’s still on track to remove at least $100 million of structural costs this year.
Signet shares rose as much as 4% in New York trading. The stock had gained 37% this year through Wednesday’s close.
The positive trend has continued into the holiday period. Through the end of November, fourth-quarter same-store sales are up about 3% from a year earlier, Signet said, suggesting luxuries like earrings and rings are still on Americans’ wish lists this season. Still, during the Thanksgiving weekend, sales were down in the low-single digits as shoppers mostly stayed home.
Data show that consumers are “saving more and they’re spending on what’s most important to them,” such as on friends and family members, Signet Chief Executive Officer Gina Drosos said in an interview. “The things couples and families have been through this year are very different and I think there’s an opportunity for jewelry to play a special role in that.”
The timing of the most recent surge of coronavirus cases presents a clear risk, however. Signet’s strongest holiday sales have traditionally come the two weeks before Christmas, so new lockdowns or surges in the virus could have an outsized impact. The company isn’t providing financial guidance and will announce its holiday sales results on Jan. 14.
Drosos said the jeweler’s online growth can help mitigate possible store closures. The company also pushed customers to shop for their holiday gifts earlier than usual -- even as early as August. She added that Signet is well positioned to navigate this year’s delivery crunch, and it’s prepared to ship five times as many items this holiday compared to last year.
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