Signet Jewelers Loses Sparkle as Pandemic Pummels Sales

Signet Jewelers shares plunge after posting a wider-then-expected quarterly loss as same-store sales suffer a pandemic-induced plunge.
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Shares of Signet Jewelers  (SIG) - Get Report plunged on Tuesday after the company posted a wider-then-expected quarterly loss as same-store sales plunged amid closures of its brick-and mortar retail stores through the coronavirus pandemic and subsequent stay-at-home restrictions.

The Hamilton, Bermuda-based jewelry giant posted a fiscal 2021 first-quarter non-GAAP loss of $142.5 million, or $3.83 a share, vs. a loss of $2.6 million, or 35 cents a share, in the comparable year-ago quarter. Analysts polled by FactSet had been expecting a per-share loss of $2.97.

Sales under its Kay Jewelers, Zales, Jared and other brands came in at $852.1 million, down 40.5% from $1.43 billion a year earlier and below the $861 million in sales expected by analysts. 

Same-store sales plunged 38.9% vs. 1.3% in the same period a year ago.

CEO Virginia Drosos noted that strong Valentine's Day sales performance was quickly offset by stay-at-home restrictions that shuttered the company’s physical stores. The company did quickly pivot to an e-commerce operating model that included “virtual consultation and selling solutions,” resulting in online sales growth of 6.7%.

“We have moved forward in our digital journey while also making significant progress controlling costs, prioritizing investments to drive sustainable growth, and preserving liquidity," Drosos said.

Investors sold off shares of Signet following the results, with the stock down 15.71% at $14.22 in trading on Tuesday.

Separately, Signet said on Tuesday that it has reopened nearly 1,100 stores in the U.S.  including in Arizona, California, Georgia, North Carolina, Ohio and Virginia. As of June 2, more than three-quarters of Signet's reopened stores were open to the public.

Like other retailers, the company is instituting new sanitizing protocols, including a rethink of the jewelry try-on experience. 

"Each time someone tries on a piece of jewelry, an employee will use alcohol wipes to clean the item before and after. Employees are required to wear masks and, where appropriate, gloves," Signet said.