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Friday, August 27, 2010

Signet Sales Up 1.7%, Same Store Sales Up 4.5 Led by U.S. Performance


Signet Jewelers, the world's largest specialty retail jeweler, reported Thursday that total sales rose by 1.7 percent to $722.8 million and same-store sales rose 4.5 percent in second quarter, ended August 1. Income before taxes for the Bermuda-based jewelry retailer rose 48.8 percent to $57.3 million. Net income was $40.7 million, an increase of 47.5 percent.

“We are pleased with our performance in the second quarter,” Terry Burman, said Signet chief executive of the company which operates jewelry retail stores in the U.S. and U.K “The outlook for the rest of Fiscal 2011 is uncertain. However, we will continue to invest in the business, increase advertising during the holiday season and expand further the availability of differentiated merchandise, in an effort to continue to gain profitable market share."

Sales in the U.S. (which accounted for 80.4 of total group sales for the period) rose 5.1 percent to $580.8 million and operating income rose 26 percent to $63.3 million. Same-store sales rose 5.9 percent. Average unit selling price across all store brands rose 4.7 percent to $407. Kay jewelers reported sales of $325.4 million with same-store sales increasing by 2.6 percent. Jared reported sales of $190.7 million and same-store sales jumped 14 percent.

Sales in the U.K. (which accounted for 19.6 percent of total group sales for the period) fell 2 percent in constant exchange rates and same-store sales fell 0.5 percent. Operating income however rose to $4.7 million compared with only $1 million one year ago. Average unit selling prices increased 12 percent. A stronger dollar, record gold prices and higher tax rates drove gross margin lower by 30 basis points in second quarter. Signet observed no real change in economic activity during the second quarter compared with the first quarter in the U.K.

“The consumer environment in both the US and the UK remained challenging in the year to date, however the business continued to utilize its competitive advantages to improve sales, enhance margins, and strengthen its balance sheet,” the company said in its report.

Signet operates 1,893 stores, including 1,345 stores in the U.S., where it trades as Kay Jewelers, Jared The Galleria Of Jewelry and under a number of regional names. Signet also operated 548 stores in the UK division, where it trades as H.Samuel, Ernest Jones and Leslie Davis.

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