Despite reporting a 48.6 percent jump in fourth-quarter net income, Signet Jewelers Ltd. expressed caution given the volatile European economy, which accounts for nearly a fifth of the its sales.

For the quarter ended Jan. 28, Signet’s income increased to $156.6 million, or $1.79 a diluted share, compared with year-ago income of $105.4 million, or $1.21 a share. Sales for the period rose 6.6 percent to $1.35 billion from $1.27 billion.

Signet topped analysts’ earnings per share expectations of $1.77 by 2 cents.

Signet, which operates Kay and Jared in the U.S. and H. Samuel and Ernest Jones in the U.K., said: “Both the U.S. and U.K. economies could be adversely impacted by developments in the euro zone.”

Although Signet noted that the jewelry market in the U.S. is “showing signs of strengthening,” it pointed to the U.K.’s economy, which “is not projected to show any short-term improvement.”

In the U.S., which accounted for 80.5 percent of Signet’s sales for the quarter, comparable-store sales rose 8.3 percent and were bolstered by Kay’s 9.1 percent comp jump and Jared’s 8.5 percent comp increase.

At Signet’s U.K. business, which accounts for the other 19.5 percent of sales, quarterly comp sales edged up 1.7 percent, helped by 2.4 percent comp gain at Ernest Jones. Comps at H. Samuel rose 1.1 percent.

The company’s first-quarter outlook was weaker than hoped and shares fell 5.1 percent to $48.63 in midday trading. Signet projected a low-single-digit same-store sales gain in the first quarter and EPS of 88 cents to 93 cents — opening up some downside to the 93 cents analysts had penciled in.

Chief executive officer Michael Barnes said Signet isn’t “shying away” from the U.K. market, despite its relative weakness. The brand will invest more marketing dollars to help remodel stores in the region.

“We believe in the [U.K.] marketplace,” Barnes said on a conference call with analysts. “We think that we have a bright future there. And it’s tough time right now but hopefully it won’t always be that way, and we are preparing ourself for the future and making sure that we make the correct investments to get us there.”

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