LONDON (Alliance News) - Signet Jewelers Ltd Thursday said total sales rose 6.3% in the first quarter of its new financial year, driving growth in its gross profit margin, thanks to improving momentum in its UK division and a solid performance in the US.
The specialty retailer, which operates Kay Jewelers and Jared in the US, as well as H.Samuel and Ernest Jones in the UK, said that sales were up 6.3% in the 13 weeks to May 4 to USD1.06 billion, boosted by a 24% increase in online sales, which drove its gross profit for the period to USD407.2 million, or 38.6% of sales, up from USD382.8 million a year earlier, representing a gross margin of 38.5%.
Same-store sales increased 3.3% in the its 13-week first quarter, while its adjusted earnings per share increased 14% in the period.
Signet said that positive trading momentum has continued in its UK division, with a significant improvement in profitability, while its US division delivered a solid performance from both its Kay and Jared stores.
Signet said that as a result, it expects comparable store sales to increase by between 3% and 5% in the second quarter, with adjusted earnings per share growth of between 13% and 20%.
It said it expects to spend between USD180 million and USD200 million in capital expenditure for the full year, on new store openings in the US, store remodels, and improving its digital and information technology infrastructure.
"We remain pleased with our performance for the first several weeks of May, including Mother's Day. Customers have responded favourably to our new products and fresh collections, particularly in fashion jewellery. While we expect to end the quarter with mid single digit comps, our performance in the second quarter to date has actually been higher than that including a strong Mother's Day," said Chief Executive Mike Barnes in a statement.
Back in February, the group announced that it would buy US-based speciality fine jeweler Zale Corp for about USD1.4 billion in cash, a major deal that will significantly boost its revenues and profits.
The deal is due to be put to a vote to Zale shareholders next week.
Signet shares were up 2.8% trading at 6,039.00 pence Thursday afternoon.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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