Signet Jewelers has ring-fenced $200m (£159m) for new capital projects this year despite year-on-year sales at the world’s largest diamond retailer plunging by $170m (£135m) during the first quarter.
Signet posted revenues of $1.7 billion (£1.35 billion) for the three months to the end of April, more than 9% less than it made in the same period last year.
GAAP operating income rose from $200,000 (£159,000) to $101.7m (£81m) during the same period, although last year’s results included $190m for settlement of a litigation matter.
CEO Virginia Drosos said macroeconomic headwinds had worsened late in the quarter, while there were fewer engagements resulting from Covid’s disruption of dating three years ago.
“As we look to the balance of the year, we’re leaning in to leverage our differentiated capabilities, widen our competitive advantages, and drive market share gains,” she commented.
“We are proactively addressing the dynamic retail climate, leveraging our team’s agility and flexible operating model to raise our cost savings target by up to $150m (£119m) while maintaining strategic investments.”
Looking ahead to the rest of the year, Signet said it is anticipating fiscal 2024 sales of $1.53 billion to $1.58 billion (£1.21 billion to £1.25 billion).
The company said it plans to make capital investments up to $200m (£159m), including in stores, connected commerce capabilities and digital and technology advancement.
Signet expects headwinds to continue in engagements with recovery later in fiscal 2024, and continue to rebound in fiscal 2025.
Bridal overall, inclusive of engagements, historically represents nearly 50% of Signet’s merchandise sales.
