Specialty retail jeweler Signet Jewelers Ltd. (SIG, SIG.L) Tuesday reported an increase in same store sales for the holiday season. The company added that it sees profitability in fiscal 2010, compared with a loss last year.
The Hamilton, Bermuda-based jeweler reported a 5.6% increase in same-store-sales for the 9-week period ended January 2. Total sales for the period grew 7.3% on a reported basis and by 5.1% at constant exchange rates.
Segment-wise, same store sales for the US division increased 7.6% for the nine-weeks period. Meanwhile, same store sales in the UK division was down 0.8%. Total sales increased 8.6% on a reported basis, and on a constant exchange rates sales were down 0.7%.
The company noted that charm bracelet category performed well in H.Samuel, as did diamonds. The charm bracelet category was also strong in Ernest Jones, as were prestige watches. Signet added that further improvement in customer service was achieved due to a focus on staff training throughout the year. For the 48-week period, same store sales dropped 0.1%. Total sales were up 0.6%. Net bad debt charge as a percentage of total sales for the period is anticipated to be about 5.7%, below the third quarter year to date rate of 6%.
In US division, same store sales for the 48 week period was down 0.1%, while total sales increased 0.6%. UK division recorded a 2.2% decline in sales for the period. Total sales were down 9.9% on a reported basis and was up 0.2% on a constant exchange rates.
Looking ahead to fiscal 2010, the company said it expects pre-tax income to be in the range of $222.5 to $232.5 million, and earnings per share to be in the range of $1.76 and $1.84. In fiscal 2009, the jewelry retailer reported a net loss of $393.7 million or $4.62 per share, compared to net income of $219.8 million or $2.55 per share in the previous year.
The company said that year-end net debt for the full year is now anticipated to be below $50 million. Net decrease in store space by end of January, 2010 is now expected to be 1%, compared to earlier outlook of 2% in comparison with 2009. Signet added that for the year it expect to have outperformed the financial targets set out in March 2009 and, in particular, to have very significantly exceeded free cash flow objective.
Signet said that in the forthcoming 2011, it will continue to seek to optimize sales by implementing additional differentiated product initiatives, improved customer service and best in class marketing. However, against a background of an uncertain economic outlook, the prime focus of management will remain on excellence in execution, and maximizing both profitability and free cash flow.
Although, the company anticipates that net cash generation for 2011 will remain strong, however substantially lower than in fiscal 2010 because of limited scope for a further reduction in working capital.
Further the company noted that its recruitment process for a new Group Chief Executive Officer will begin in February.
SIG is currently trading at $28.05 per share, down 2.71%, on the New York Stock Exchange.
SIG.L is currently trading at 1,717.00 pence per share, down 2.72%, on the London Stock Exchange.
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