Signet shines in Q4, ramps up store expansion

Signet Jewelers is already the world’s largest retailer of diamond jewelry and it plans to get even bigger in 2016 by accelerating new store and omnichannel growth. The news came as the chain reported a same-store sales increase of 4.9% in the fourth quarter.



Operating stores under banners such as Kay, Jared and Zale, Signet expects to increase square footage by 3% to 3.5% in 2016, compared to an earlier forecast of 2% to 3% growth. That translates to new store opening in the range of 145 to 178 units for a net increase minus closures of between 61 and 87 units on store based of 3,625 unit at the end of its fiscal year on Jan. 30.



Last year, Signet opened 108 stores, and closed 62 for a net increase of 46 units reported a 4.9% fourth quarter same-store sales increase, better than expected profits and said it would open more new stores in 2016 than it previously indicated.



The company said its capital expenditures would be driven primarily by new Kay and Jared stores, store remodels and information technology investments. Most of the square footage growth is slated for real estate venues other than enclosed malls.

“Signet had an excellent finish to another strong year with annual sales of $6.55 billion and comp sales growth of 4.1%,” said Signet Jewelers CEO Mark Light. “Once again, we delivered strong top and bottom line growth with results driven by product innovation, targeted marketing, and supported by delivering superior customer service by the best store teams in retail.”



Light believes those factors combined with the companies diversified real estate portfolio, customer finance programs, custom jewelry and repair business position Signet long term as a profitable growth company in the specialty retail sector. He also noted that Signet’s recent acquisition of Zale and integration continues to go well and prompted the company to increase its estimates about synergy benefits.



“We see an expanded and accelerated level of financial contribution from the deep pipeline of initiatives our teams are working on to unleash the long term potential of a fully integrated Signet,” Light said. “In Fiscal 2017, we will continue our disciplined execution of our focused strategies that include our omnichannel approach to customer service, product innovation and fresh line extensions and maximizing the effectiveness of marketing through the use of customer segmentation research.”



Signet’s total sales last year increased 14.2% to $6.55 billion and fourth quarter sales increased 5.1% to nearly $2.4 billion. In the fourth quarter, e-commerce sales increased 11.2% to $166.3 million and now represent nearly 7% of Signet’s total sales. Full year profits increased 22.7% to $467.9 million, or $5.87 a share, and fourth quarter profits increased 19.3% to $271.9 million, or $3.42 a share.