Signet Sparkles, But Others Expect Jewelry Sales To Slow


Signet Jewelers, the diamond giant, surprised observers with extra-sparkly sales and profits. But other jewelry experts warn that after two years of pandemic-inspired sales gains, growth will likely slow in the months ahead.

Signet owns such brands as Zales, Kay Jewelers and Jared. Sales climbed 8.9% to $1.8 billion in the first quarter of its fiscal year as compared to the same period last year.

The company posted a loss of $92.1 million, compared to net income of $129.8 million a year ago. But excluding non-recurring items, such as litigation and buying out certain pension funds, its per-share profits came in well ahead of expectations. (In 2020, the Hamilton, Bermuda-based company agreed to pay $240 million in its “MeToo” settlement following charges of widespread sexual harassment.)

That strong performance came against some challenges, including decreased transactions in North American stores. The company says higher inflation and the absence of stimulus payments led to softer results, particularly at lower price points.



 “Customers responded to the breadth and newness within our assortment, particularly higher price point offerings, diamonds and precious metals,” said Virginia C. Drosos, chief executive officer, in its announcement. “Our scale, strong balance sheet, and diversified banner portfolio provide flexibility to navigate macro level uncertainties.”

Signet reaffirmed its sales outlook for the year ahead.

Others aren’t quite so upbeat. Experts expect a slowdown in jewelry sales following a two-year hot streak. In 2021, sales of jewelry and watches rose to $115.29 billion, up 51% from the prior year, according to industry reports. And initially, observers predicted a 9% gain this year.

But with inflation nibbling away at consumers’ discretionary funds, Fruchtman Marketing forecast for the second half of this year more subdued gains, with sales rising between 4% and 8%.

Fruchtman cites many wild cards. During the pandemic, luxury jewelry replaced travel for many affluent consumers. As consumers return to more elaborate vacations, that trade-off may evaporate.

Pressure on millennials may also hurt sales of engagement rings. The average purchaser of a ring is now 32. “This age group will be hyper-focused on value,” the report says. That means jewelers will likely see carat size go down and interest in lab-grown diamonds increase.

Rising mortgage rates and rents are also pressuring young buyers.

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