Signet Jewelers Limited
) rose nearly 7% on the index before hitting an all-time 52-week
high of $107.38 on the back of better-than-expected
fourth-quarter fiscal 2014 results. The company's quarterly
earnings per share of $2.18 surpassed the Zacks Consensus
Estimate of $2.15 per share and grew 2.8% year over year.
For fiscal 2014, earnings came in at $4.56 per share, ahead of
the Zacks Consensus Estimate of $4.53 and up 4.8% year over year
Signet posted net sales of $1,564.0 million in the quarter, up
3.4% from the prior-year quarter driven by healthy performance of
stores in the U.S. and U.K. division. Total revenue came ahead of
the Zacks Consensus Estimate of $1,550 million.
For the full year, net sales came in at $4,209.2 million, which
was up 5.7% year over year and beat the Zacks Consensus Estimate
of $ 4,193 million.
For the quarter, comparable-store sales climbed 4.3% as against
an increase of 3.5% in the prior-year quarter. E-Commerce sales
grew to $79 million, up 23.6% on a year-over-year basis.
By division, sales in the U.S. grew 3.5% to $1,288.0 million on
the back of strong performance in the bridal, colored diamonds,
watches, fashion jewelry and beads collections. Comps rose 4.0%
while e-Commerce sales grew 21.4% to $61.9 million.
Sales in the U.K. division increased 1.4% to $272.2 million due
to strong performance of bridal and fashion diamond jewelry,
fashion and watches (excluding Rolex, which was offered in lesser
outlets in fiscal 2014). Moreover, comps grew 5.7% while
e-Commerce sales grew 32.6% to $17.1 million.
Consolidated gross profit for the quarter increased 1.8% to
$648.8 million while gross margin contracted 60 basis points to
41.5%. Operating income was $270.6 million, up 1.1% while
operating margin fell nearly 40 bps to 17.3%.
Signet ended the quarter with cash and cash equivalents of $247.6
million, net receivables of $1,374.0 million while accounts
payable were $162.9 million. Moreover, net cash provided by
operating activities was $257.4 million.
In the quarter, Signet bought back 1,557673 shares at an average
price of $67.24 per share. As of Feb 1, 2014, the company has $
$295.4 million worth of shares remaining under the share
As of Feb 1, 2014, the company operated 1,471 stores in the U.S.
and 493 outlets in the U.K., thereby bringing the total store
count to 1,964.
Moreover, Signet announced a 20% hike in its quarterly dividend
to 18 cents per share payable on May 28, 2014 to shareholders of
record on May 2, 2014,
Signet now projects fiscal first-quarter 2015 earnings in the
range of $1.14 to $1.20 per share, after including the impact of
) acquisition. The current Zacks Consensus Estimate for
first-quarter 2015 is $1.29 per share.
In Feb 2014, Signet had declared that it would acquire Zale for
$1.4 billion. This move is expected to result in combined sales
of $6.2 billion generating from approximately 3,600 retail
outlets and annual synergies of roughly $100 million within three
fiscal years, resulting from operational efficiencies.
For the first quarter, comps are expected to increase 3%-4%.
For fiscal 2015, Signet expects capital expenditure to be around
$180 million to $200 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 include
Barnes & Noble, Inc.
), both of which have a Zacks Rank #1 (Strong Buy).
BARNES & NOBLE (BKS): Free Stock Analysis
HANESBRANDS INC (HBI): Free Stock Analysis
SIGNET JEWELERS (SIG): Free Stock Analysis
ZALE CORP NEW (ZLC): Free Stock Analysis
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