The world’s largest retailer of diamond jewellery, Signet Jewelers, suffered a difficult end to 2022 in the key pre-Christmas holiday season leading to a drop in same store sales of 6.1% for the full financial year, which ended on January 28.
Including additional stores, sales were flat at $7.8 billion.
The company’s share price had been climbing from around $53 at the end of summer 2022 to a peak of $82 at the end of February this year, but has since dropped back to around $70.
Markets reacted well to a rise in profit margins, with Signet’s share price jumping 10% as the annual results were released.
Signet Chief Executive Officer Virginia C. Drosos gave an upbeat assessment on what was achieved in the United States and the UK.
“We delivered on our three key priorities of growing market share, achieving an annual double-digit non-GAAP operating margin, and leveraging capital allocation to drive shareholder returns despite headwinds and volatility throughout the year,” she says.
Looking ahead, the business expects to continue growing operating profits in the double digits, despite expecting sales to decline this year.
Sales in the fourth quarter were impacted by bad weather in the US in the peak selling period before Christmas, as well as labour strikes and the impact on the dollar-based business of the weak British pound.
Same store sales dropped by 9.3% in the fourth quarter in the United States and by 6.8% in the UK, where Signet operates under the H. Samuel and Ernest Jones retail brands.
For the full year, same store sales fell by 7% in the United States, but rose by 8.3% in the UK where higher average transactions values compensated for lower unit sales.
The UK operation is much more heavily weighted towards watch sales than in the United States, where Signet retail operations focus primarily on high volume jewellery.
