Akron, Ohio—Signet Jewelers Ltd. has reported a downturn in both total revenue and same-store sales for the fourth quarter and fiscal year 2024, attributing the decline to subdued demand for engagement rings and a sluggish holiday season.
The parent company of major jewelry store chains such as Zales, Jared, and Kay Jewelers experienced a setback due to the ongoing impact of the COVID-19 pandemic on engagement rates, compounded by subdued consumer spending during the holiday period. However, Signet remains optimistic about gradual improvements in the foreseeable future.
During an earnings call on Wednesday morning, CEO Virginia C. Drosos expressed confidence in the anticipated recovery of engagement rates. She foresees a gradual upswing over the next three years, with a projected 5 to 10 percent increase in U.S. engagement rates for fiscal 2025 compared to the previous fiscal year, despite a slow start to the current fiscal year.
Chief Financial Officer Joan Hilson provided insight into the current state of engagements, noting a low-to-mid single-digit decline in Q1 of the fiscal year.
The decline in the bridal market notably impacted Signet’s sales performance. In the quarter ending Feb. 3, the company recorded sales of $2.5 billion, marking a 6 percent decrease year-over-year, with same-store sales plummeting by 10 percent.
Signet attributed approximately $25 million in lost sales to the recent divestiture of 15 Ernest Jones stores to Watches of Switzerland.
For the full fiscal year, Signet reported sales totaling $7.2 billion, down 9 percent year-over-year, with same-store sales declining by 12 percent.
In addition to weak engagement ring sales, Signet faced challenges during the holiday season, witnessing a late surge in shopper activity and heightened demand for discounts, exacerbated by industry-wide overstocking and subsequent markdowns.
Despite these challenges, Signet remains optimistic about future prospects, anticipating an improvement in same-store sales through fiscal 2025, driven by engagement recovery, customer acquisition, and product innovation.
However, technical difficulties hindered sales performance in North America, where banners include Zales, Kay Jewelers, and Peoples in Canada. Fourth-quarter sales in the region totaled $2.4 billion, a 6 percent decline year-over-year, with same-store sales dropping by 10 percent due in part to integration issues at its digital banners, namely James Allen and Blue Nile.
Signet’s international banners, including Ernest Jones and H. Samuels, also experienced declines in sales and same-store sales, with efforts underway to optimize its store footprint.
Despite challenges in the engagement ring segment, Signet reported success in the low-priced fashion jewelry category, with Banter (formerly Piercing Pagoda) achieving the strongest same-store sales in the United States in Q4.
Looking ahead, Signet plans strategic investments in store renovations, e-commerce capabilities, and digital advancements, supported by planned capital expenditures of $160 million to $180 million.
With cautious optimism, Signet forecasts first-quarter sales in the range of $1.47 billion to $1.53 billion, with same-store sales expected to decline between 7 and 11 percent. Full-year sales are projected to range from $6.66 billion to $7.02 billion, with same-store sales down 5 percent to up less than 1 percent.
