Signet Jewelers Ltd. (SIG: Quote, SIG.L) on Thursday reported a better than expected profit for the first quarter on higher sales at its U.S. division. However, revenues missed analysts' estimates, reflecting same-store sales that were negatively impacted by the calendar shift of Mother's Day to the second quarter.
Looking ahead, Signet forecast earnings for the second quarter below analysts expectations. The company's shares are down more than 11 percent in pre-market trading.
The specialty retail jeweler's same-store sales for the first quarter rose 1.2 percent and were adversely impacted by the previously disclosed calendar shift, estimated to have had an impact of $32 million or 370 basis points.
Mike Barnes, Chief Executive Officer of Signet, said, "We delivered strong financial results in the first quarter and increased our earnings per share by 10.3% to $0.96 as we anticipated the impact of the Mother's Day promotional calendar shift and managed our business accordingly."
About 83 percent of Signet's sales in the first quarter came from the U.S., where the year-over-year growth was 1.8 percent. Same store sales increased 1.2 percent and were impacted by 440 basis points due to the calendar shift. The Kay brand grew sales 4 percent, while sales at the more expensive Jared brand increased by 1.7 percent.
Sales at the U.K. Division, which accounted for about 17 percent of total sales, declined 0.5 percent. However, same-store sales at the division rose 1.2 percent.
Signet's gross margin rate for the quarter was 39.3 percent, compared to 39.4 percent in the same period last year.
The company's net income for the first quarter was $82.5 million or $0.96 per share, up from $75.4 million or $0.87 per share in the year-ago period.
On average, 9 analysts polled by Thomson Reuters expected earnings per share of $0.91 for the quarter. Analysts' estimates typically exclude one-time items.
Sales for the quarter edged up 1.4 percent to $900.0 million from $887.3 million in the year-ago period, but missed analysts' consensus estimate of $912.29 million.
Looking ahead to the second quarter, Signet forecasts earnings per share in a range of $0.78 to $0.84 and same-store sales in the mid to high single digit range. Analysts expect the company to report earnings of $0.90 per share for the quarter.
The company said the outlook is being provided due to the complexity of the calendar shift.
However, Signet said its second quarter benefited from the calendar shift. Same-store sales, including Mother's Day, were up strong double-digits.
SIG closed Wednesday's trading at $47.75, up $2.00 on a volume of 1.70 million shares. In Thursday's pre-market, the stock is down $5.50 or 11.52 percent to $42.25.
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by RTT Staff Writer
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