Signet Jewelers (SIG - Get Report) lost their sheen in early trading on Thursday, even after the Kays, Zales and Jared jewelry retailer reported surprise fiscal first-quarter earnings that countered analysts' expectations of a loss.
Signet reported non-GAAP operating income of $24.2 million, or 8 cents a share, vs. non-GAAP operating income of $24.1 million, or 10 cents a share, in the comparable year-earlier quarter, and well above the loss of 23 cents a share analysts polled by FactSet had been expecting.
Sales for the quarter dropped to $1.43 billion from $1.48 billion a year ago. Same-store sales, a key metric among retailers for measuring consumer traffic, dropped 1.3%.
"We delivered operating profit above our guidance range and strong free cash flow in the first quarter, with same-store sales at the low end of our guidance," Signet CEO Virginia Drosos said in a statement.
Still, "Given the sales trends we experienced year to date and softening retail traffic, we are narrowing our fiscal 2020 guidance while continuing to expect strong progress on cost savings across our business," she said.
For fiscal 2020, Signet lowered its adjusted earnings guidance to between $2.88 and $3.17 a share, vs. prior adjusted guidance of between $2.87 and $3.45 a share. It also revised its same-store sales outlook to down 1.5% on total sales of between $6 billion and $6.06 billion. The company now anticipates non-GAAP operating income of between $260 million and $280 million.
Shares of Signet were down 1.75% at $19.07 in early trading on Thursday. They ended the day Wednesday down more than 5% at $19.42 on the New York Stock Exchange.