The sparkle is returning to Signet diamonds — at least in the eyes of investors.
The American jewelry company reported its fourth-quarter fiscal year 2019 results Wednesday before the bell, reporting decreases on both top and bottom lines.
Total sales for the period ending Feb. 2 fell 6 percent to $2.15 billion, down from $2.2 billion a year earlier. The company’s bottom line turned red: a loss of $116.2 million for the quarter, compared with gains of $343 million a year earlier.
Same-store sales, across the entire company’s portfolio, which includes jewelry brands Kay, Zales, Jared, Piercing Pagoda, James Allen and Peoples, fell 2 percent. The company’s one bright spot was Piercing Pagoda, where same store sales shot up 17.1 percent during the quarter. Meanwhile, in-store sales at Kay, Jared and James Allen were all in the red.
Even so, the results were better than expected and the stock ticked ahead nearly 2 percent Wednesday morning after the market opened.
“We made progress on our Path to Brilliance initiatives,” Virginia Drosos, chief executive officer of Signet, said in a statement, referring to the initiative that began in fiscal year 2019. “However, we did not finish the year as strongly as expected due to a highly competitive promotional environment, continued consumer weakness in the U.K., and lower-than-expected customer demand for legacy merchandise collections that impacted our holiday fourth-quarter results.
“Using important learnings from year one of our transformation, as we look forward to fiscal [year] 2020, we are accelerating initiatives to further develop the seamless and personalized omnichannel jewelry experience that Signet can uniquely provide,” Drosos said.
She added on the conference call with analysts on Wednesday that the “multiyear journey” will include initiatives, such as adding more exclusive pieces, both in store and online, as well as customized products and full-service offerings, such as repairs and piercings. The company will also continue to invest in “modernizing content and messaging” and technology for its mobile and online platforms.
In fact, the executive said the company year will be the first time Signet spends more money on digital and social media marketing than television advertisements.
Signet will also continue to “optimize real estate, working toward a portfolio of fewer, better stores,” Drosos said. That includes exiting “lower-grade malls” and regional banners.
Still, the ceo pointed out that the company will continue to “see some headwinds from legacy brands” through the coming year, including same store sales flat to down and reduced revenues for the year.