Signet’s North American retail outlets saw same store sales fall by 0.7% the nine weeks ending January 5, 2019 and reported sales drop by 2.1% to $1.67 billion.
The company also issued forward guidance for the year ahead suggesting there will be little growth.
Shares of Signet Jewelers are down by more than 24% at around $25 since the holiday-season sales results were announced. Their value has more than halved since the 52-week high of $71 in September last year.
During the Holiday Season, the percentage of sales from new merchandise increased, according to a statement from Signet, but this performance was more than offset by declines in legacy collections.
The statement did not refer to watch sales in North America. The group’s UK retailers, H. Samuel and Ernest Jones, saw same store sales decline by 7.3%. The decline was due to lower sales in bridal jewelry, fashion jewelry and fashion watches, partially offset by higher sales in prestige watches.
Signet chief executive officer, Virginia Drosos, says of the results: “Our holiday season performance fell short of our expectations. Early improvements in refreshed merchandise assortment, digital marketing and omnichannel were more than offset by larger than expected declines in legacy product lines. In addition, the competitive promotional environment we saw early in the season intensified in December and, despite our increased promotional investments, we experienced reduced traffic during key December gifting weeks. Combined with higher than expected credit costs, these factors negatively impacted our profitability.”
“These holiday results reinforce the need to take even faster action to improve our financial and operational performance,” the CEO continues.”We will move decisively to improve profitability through aggressively optimising our cost structure and continuing to right-size our store base, as well as more effectively managing our inventory. As we enter the second year of our Path to Brilliance transformation, we expect to accelerate initiatives to enhance our product assortment, marketing personalisation and analytics, promotional effectiveness, service offerings, and e-commerce to deliver a more seamless and engaging omnichannel customer experience.”