Signet Jewelers (SIG) stock was trading 4.64% lower at $83.40 mid-morning Wednesday as weakness in the company's Sterling Jewelers e-commerce business contributed to "disappointing" holiday results, CEO Mark Light said in a statement.
The jeweler reported a same-store sales decline of 4.6% for the nine weeks ended December 31.
Total sales fell 5.1% year-over-year to $1.94 billion for the period.
In-store sales were largely in line with the industry's average single-digit percentage increase, while e-commerce sales significantly underperformed the industry's double-digit percentage increase, Light said on a conference call this morning.
Signet's e-commerce sales were down 2.4% to $142.5 million over the holidays, as certain enhancements to the Sterling e-commerce business proved unable to handle high holiday traffic.
These enhancements included improved product detail pages and better navigation, Light said on the call.
Also weighing on holiday sales was a decline in mall traffic that led to a "highly promotional retail environment," Light noted.
Signet chose not to participate in these steep discounts for fear of bolstering revenue at the expense of profitability, Light added.
He said this allowed the company to maintain the low end of its earnings per share guidance for the fourth quarter and fiscal 2017.
The Bermuda-based company now expects to report fourth-quarter adjusted earnings between $4 and $4.05 per share vs. past expectations between $4 and $4.20 per share.
Full-year earnings are projected to range between $7.38 and $7.43 per share, compared to the company's past outlook between $7.38 and $7.58 per share.
Analysts surveyed by FactSet are modeling adjusted earnings of $4.04 a share for the fourth quarter and $7.46 a share for the year.