Signet Jewelers Ltd. (NYSE: SIG) saw its shares drop early on Wednesday after the company reported its holiday sales. Signet joined the list of retailers that ultimately disappointed investors during this holiday season.
During this past quarter, the company reported that same-store sales (SSS) decreased 5.3%, while total sales decreased 3.1%. Signet also said that the implementation of strategic priorities drove double-digit e-commerce growth overall and an SSS increase of 4% in the Zales division.
In this holiday season, Signet’s total sales were $1.88 billion, compared to $1.94 billion in the prior year. Sales declines were primarily driven by weakness in the Sterling division, impacted mostly by the credit outsourcing that accounted for about two-thirds of the decrease.
Signet reiterated its SSS outlook and updated its guidance for the fiscal 2018 full year. The company expects to see SSS down by a mid-single-digit percentage, with earnings per share (EPS) in the range of $6.17 to $6.22. The previous guidance called for EPS between $6.10 and $6.50. Thomson Reuters consensus estimates call for $6.33 in EPS and $6.22 billion in revenue for fiscal 2018.
Virginia C. Drosos, CEO of Signet Jewelers, commented:
During the Holiday Season, we made positive progress on our strategic priorities, offset primarily by the negative impact of the credit outsourcing transition, as evident by the mixed performance across our banners and channels. Our overall eCommerce business grew double-digits, and our Zale division, where our strategic initiatives are beginning to take hold unencumbered by the credit transition, delivered same store sales growth with strength in both bridal and fashion. Conversely, progress in our Sterling division was overshadowed by the negative impact of the credit outsourcing transition in stores.
Shares of Signet traded down more than 3% early Wednesday to $54.70, with a consensus analyst price target of $60.64 and a 52-week range of $46.09 to $86.35.