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Signet Jewelers Profit Tops Estimate; Stock Up - Update

Signet Jewelers Ltd (SIG) Thursday reported a better-than-expected rise in fourth-quarter profit, on robust sales growth in the U.S. and modest increases seen in the U.K. The company benefited from same-store sales growth at its Kay and Jared brands. Moving forward, Signet provided its earnings guidance for the first quarter, with same-store sales expected to increase 5 - 7 percent.

The Hamilton, Bermuda-based company also announced a 25 percent increase in its quarterly dividend. Buoyed by the results, shares of Signet Jewelers gained about 7 percent in morning trade on the New York Stock Exchange, while they were up nearly 8 percent in London.

"Our record performance continues to reflect the benefits of our competitive strengths and success of our growth initiatives," said CEO Mike Barnes.

"We will continue to advance our expansion goals as we integrate our recently acquired Ultra stores, execute on our multi-channel growth initiatives and expand our store base," added Barnes.

Signet reported sales of $1.51 billion in the fourth quarter of fiscal year 2013, up 12 percent from $1.35 billion in the prior year.

Analysts polled by Thomson Reuters estimated sales of $1.49 billion for the quarter.

On a same-store basis, sales were up 3.5 percent, on back of a nearly 7 percent increase in the prior year. Same-store sales at Kay brands grew 5.9 percent, and while at Jared, it was up 5.5 percent. The company's brands such as Jared and Ernest Jones are targeted at the upper middle market.

In the US division, which accounts for most of the business, sales were up 14.2 percent, and same-store sales increased 4.9 percent. Growth was led by strength across most merchandise categories in both Kay and Jared, and the Ultra acquisition.

UK division sales edged up 1.8 percent, while same-store sales fell 1.9 percent. Sales were impacted by lower store traffic and increased customer purchases of promotional merchandise.

Signet reported quarterly net income of $171.8 million or $2.12 per share, compared to $156.6 million or $1.79 per share last year.

Analysts on consensus expected earnings of $ 2.09 per share for the quarter. Analysts' estimates typically exclude special items.

For the first quarter, Signet expects earnings of $1.07 to $1.12 per share, while analysts currently expect earnings of $1.12 per share.

The company expects quarterly same-store sales to be positive 5 to 7 percent.

Signet also declared a quarterly dividend of $0.15 per common share, a 25 percent increase from the prior year. The dividend will be payable on May 29, 2013 to shareholders as of May 3, with an ex-dividend date of May 1.

Signet Jewelers stock is trading at $67.54, up 6.76%, on a volume of about 1 million shares on the NYSE. In London, the stock is trading at 4,446.93 pence, up 7.78%.

by RTT Staff Writer

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