Signet Jewelers Limited
) posted third-quarter fiscal 2014 bottom-line results of 42
cents per share that came in line with the Zacks Consensus
Estimate but fell from the prior-year quarter by a penny.
Excluding the acquisition costs of Ultra stores, earnings per
share was 45 cents.
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Signet posted net sales of $771.4 million in the quarter, up 7.7%
from the prior-year quarter driven by healthy performance of
stores in the U.S. division. Total revenue came below the Zacks
Consensus Estimate of $778 million. Comparable-store sales
climbed 3.2% as against an increase of 1.4% in the prior-year
quarter. E-Commerce sales grew to $22.8 million, up 16.3% on a
By division, sales in the U.S. grew 9.8% to $632.1 million on the
back of strong performance in the bridal, colored diamonds and
watches collections. Comps rose by 4.2% while e-Commerce sales
grew 11.7% to $16.2 million.
Sales in the U.K. division fell 0.9% to $139.3 million due to
strong performance of bridal and diamonds, offset by lower sales
of watches. Moreover, comps dropped 0.9%; whereas e-Commerce
sales grew 29.4% to $6.6 million.
Consolidated gross profit for the quarter increased 1.6% to
$239.2 million, while gross margin contracted 190 basis points to
31% due to the incorporation of Ultra stores results.
Consolidated operating income was $51.6 million, down 1.7%, while
operating margin shriveled nearly 60 bps to 6.7%.
Signet ended the quarter with cash and cash equivalents of $87.8
million, net receivables of $1,123.5 million, while accounts
payable were $244.9 million. Moreover, net cash (used in)
provided by operating activities was ($80.4) million.
In the quarter, Signet bought back 371,713 shares at an average
price of $67.26 per share. As of Nov 2, 2013, the company has
$300 million worth of shares remaining under the share repurchase
As of Nov 2, 2013, the company operated 1,478 stores in the U.S.
and 496 outlets in the U.K., thereby bringing the total store
count to 1,974 across the U.S. and U.K.
Signet now projects fiscal fourth-quarter 2014 earnings to range
between $2.30 and $2.40 per share. The current Zacks Consensus
Estimate for fourth-quarter 2014 is $2.33 per share. Comps are
expected to increase in the low to mid single-digit range while
gross margin is anticipated to remain the same as in the prior
For fiscal 2014, Signet expects capital expenditure to be around
$180 million to $185 million, which includes expenses related to
the launch of 75-85 new Kay and Jared outlets, store remodeling,
enhancing digital and information technology infrastructure as
well as outlet channel development.
Signet currently has a Zacks Rank #3 (Hold). Some better-ranked
retail stocks that look promising and are expected to continue
with their upbeat performance include
Five Below, Inc
). While Hanesbrands has a Zacks Rank #1 (Strong Buy), DSW and
Five Below carry a Zacks Rank #2 (Buy).