• by Sarah Mahoney  @mahoney_sarah, June 10, 2021

Sales are up sharply at Signet Jewelers Limited. But while the world’s leader in diamond jewelry sales beat expectations, it’s predicting a downturn as consumers pivot back to experiences rather than the next shiny purchase.

“As the vaccine rollout matures, the company believes there will be a shift of consumer discretionary spending away from the jewelry category toward experience-oriented categories,” it says in its quarterly announcements.

Neither the timing nor magnitude of that change is easy to pin down. But Signet says it is “planning for increased marketing expenses to continue to fuel momentum, and proactively manage against shifts in consumer spending as the year progresses.”

Still, there was plenty to brag about in its financial report for the first quarter of the fiscal year, with comparable-store sales up 27%, and total sales rising to $1.7 billion. Ecommerce sales gained 110.3%.

Based in Hamilton, Bermuda, the company says it is especially pleased with double-digit sales increases at Kay and Zales versus the same period two years ago.

Its Jared chain also continues to gain, and Piercing Pagoda had its best quarter ever.

Companywide, same-store sales gained 117% in North America, with average transactions rising 15%. Still, Signet notes that physical traffic in its stores is down compared to the same period in 2019.

Internationally, same-store sales dropped 12%, reflecting mandated closures of its stores based in the U.K.

Operating income rose to $168.7 million, compared to an operating loss of $299.6 million a year ago, at the beginning of the pandemic, and a loss of $2.6 million in the same period of the year before that.

Signet says it still expects same-store sales to be negative in the second half of its fiscal year, although it believes its improved services and capabilities will help.

And it says it is increasing its investment in the future, and now plans to spend between $175 million and $200 million in technology and innovation.

It plans to close some 100 stores in the fiscal year while opening 100 new locations, primarily in kiosks.

 

 

 

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