Signet Jewelers Ltd. pleased Wall Street Thursday by outperforming its forecast for a bleaker third quarter.
The Sterling Jewelers Inc. parent company posted revenues of $1.19 billion in the quarter that ended Nov. 2, a period in which it recorded a net loss of $43.7 million and a loss per share of 84 cents.
But the company’s stock rose more than 7 percent Thursday after the results, as it exceeded its second-quarter guidance in September that had anticipated deeper earnings per share losses and lower sales in the $1.14 billion to $1.16 billion range.
Although its total sales were down 0.3 percent in the third quarter, its e-commerce sales shot up 11.4 percent from its third quarter last fiscal year to $139.3 million. Its same-store sales also rose 2.1 percent. In North America alone, its same-store sales increased 2.9 percent, with the brick-and-mortar component increasing by 1.6 percent and e-commerce portion rising by 13 percent.
“As we approach the key selling weeks ahead, we are focused on successfully executing our customer inspired holiday plans featuring new on-trend merchandise, enhanced e-commerce capabilities, and more relevant and targeted marketing campaigns,” chief executive officer Virginia C. Drosos said in a statement.
“Our financial guidance embeds the progress we have seen year-to-date balanced with our expectation for a competitive retail holiday environment,” she said.
Jared, part of the Signet portfolio, on Saturday will open a new concept store in collaboration with James Allen in Fredrick, Md. Jared is known for its diamond consultants and customer service and James Allen is known for its collection of more than 250,000 independently certified high-quality loose diamonds in popular shapes and different carat weights.
“Our collaboration with James Allen allows Jared the opportunity to create a new and richer experience for our customer and create a modern environment for jewelry shopping,” said Bill Brace, chief marketing officer of Signet and executive general manager of Jared.
The store is located in the Francis Scott Key Mall, 5617 Spectrum Drive. During the event, guests can enter to win a pair of earrings valued at more than $3,000 and the first 200 guests will receive a gift valued at more than $100.
While striving for enhance customer experiences, Signet is dealing with tariffs which looms large for many retailers. Signet said in September that its jewelry was affected by tariffs that went into effect that month. In August, President Trump tweeted that the U.S. tariffs on $300 billion in Chinese goods, which would start on Sept. 1, would be increased to 15 percent from 10 percent. The tariffs on some Chinese imports are expected to go into effect beginning Dec. 15, though that could change depending on whether the U.S. and China reach any agreement.
In September, its ceo said the company did not expect prices for its customers to increase as a result of tariffs in fiscal year 2020. Signet’s chief financial officer Joan Hilson told investors in a call Thursday that for now, the company expects to be relatively unscathed by tariffs in fiscal year 2020.
“At the end of fiscal 2020, we now expect our exposure to Chinese goods to be a low-teens percentage of our merchandise spend versus our previous guidance of mid-teens,” Hilson said on the call.
Signet, whose which portfolio includes mainstream jewelry brands Kay, Zales and Jared has also been dealing with separate legal disputes with women sales staff and investors involving workplace discrimination claims.