Signet Jewelers Q3 Profit Down, Sees Q4, FY Adj. Profit Above View; Stock Up

(RTTNews) - Signet Jewelers Limited (SIG) reported that its third-quarter net income attributable to common shareholders declined to $14.8 million from $15.0 million, while quarterly earnings per share rose to $0.20 from $0.19 last year. Third quarter Adjusted EPS was $0.30.

SIG is currently trading at $95.79, up $6.91 or 7.77%.

Net income attributable to common shareholders was unfavorably impacted by $2.2 million, non-cash, due to the pro-rated amount of the new preferred share dividend. Signet's accelerated share repurchase plan of $525 million should conclude next month. Upon initiation of the program, Signet received 4.7 million shares with the remainder to be net settled upon completion. The plan is proceeding in line with expectations and, combined with previous repurchase activity, is still anticipated to offset the impact on average diluted common shares outstanding from the preferred share offering.

Mark Light, Chief Executive Officer of Signet Jewelers said, "We expected challenging market conditions to result in a sales decline. However, our continuing ability to execute in a difficult environment led to results that were somewhat better than our expectations.

Signet's total sales were $1.186 billion, down 2.5% compared to $1.216 billion in the 13 weeks ended October 31, 2015. Total sales on a constant currency basis declined 0.5%. Same store sales decreased 2.0% compared to an increase of 3.3% in the third quarter Fiscal 2016. The sales declines were due to under performance in select stores (e.g. regionals, Jared); energy dependent regions which reduced SSS about 80 basis points; and declines in select collections such as Charmed Memories and watches. This was partially offset by better performance in fashion jewelry and select bridal. Ecommerce sales in the third quarter Fiscal 2017 were $51.6 million, or 4.4% of sales, up $1.1 million, or 2.2%, compared to $50.5 million in the third quarter Fiscal 2016.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.20 per share and revenues of $1.18 billion for the third-quarter. Analysts' estimates typically exclude special items.

For the fourth-quarter, the company expects earnings per share to be in the range of $3.91 to $4.13, Adjusted earnings per share of $4.00 to $4.20. Same store sales is expected to decline 2.0% to 4.0%. Analysts project fourth-quarter earnings of $3.97 per share.

Looking ahead for fiscal 2017, the company expects earnings per share to be in the range of $7.03 to $7.25, Adjusted earnings per share of $7.38 to $7.58. Same store sales is expected to decline 1.0% to 2.5%. Analysts expect annual earnings of $7.27 per share.