Signet Jewelers reported first-quarter results Tuesday that beat analyst profit expectations as the jewelry retailer lifted the low end of its full-year guidance and announced a $50 million stock buyback.
The owner of Kay, Zales and Jared posted a profit of $31.7 million, or 78 cents a share, compared with $33.5 million, or 78 cents a share, a year earlier. On an adjusted basis, earnings came in at $1.56 a share, above the $1.38 consensus estimate from analysts polled by FactSet.
Sales rose to $1.55 billion from $1.54 billion a year ago, in line with analyst expectations. Same-store sales increased 1.8%, matching estimates but decelerating from 2.7% growth in the prior-year period.
CEO J.K. Symancyk said in an interview that the company is seeing a divergence by income level. Lower-income customers are trading down, while higher-end shoppers are spending more, which has helped push up average prices at Signet’s retail chains. “We see opportunities to sell more at the higher end,” Symancyk said.
Signet said the results provide early proof points of its “Grow Brand Love” strategy and that it is accelerating go-to-market plans for Kay, Zales and Jared.
The company lifted the bottom end of its full-year outlook. It now projects sales of $6.7 billion to $6.9 billion, up from $6.6 billion previously at the low end. Same-store sales growth is expected in a range from a 0.75% decline to a 2.5% increase, with the lower bound raised from a 1.25% decline. Adjusted earnings are now expected at $9.20 to $11 a share, compared with an earlier range of $8.80 to $10.74. The company said the improved guidance reflects additional stock buybacks since March.
For the current second quarter, Signet forecast sales of $1.5 billion to $1.53 billion and same-store sales growth of 0.5% to 2.5%. Analysts are expecting second-quarter sales of $1.54 billion and same-store sales growth of 1.73%.
Signet said it plans to buy back $50 million worth of stock as part of an accelerated share repurchase agreement later this month.