27th Mar 2014 12:52
LONDON (Alliance News) - Signet Jewelers Ltd Thursday said it performed well in the fourth quarter with good growth in same-store sales, which boosted its overall profits and revenues for its recent financial year.
The specialty retailer, which operates Kay Jewelers and Jared in the US, as well as H.Samuel and Ernest Jones in the UK, said that same-store sales increase 4.4% in the its 13-week fourth quarter, while its earnings per share increased 4.8% in the period.
The company declared an increased quarterly dividend to shareholders of USD0.18 per share, up 20%.
Signet said that for the full year ahead, it expects capital expenditure to be in the range of USD180 million to USD200million, including costs relating to the opening of 75 to 85 new Kay and Jared stores in the US, store remodels, and investments to its digital and information technology infrastructure.
For the year ended February 2, Signet said that sales increase to USD4.21 billion, up from USD3.98 billion in 2012, while its income before taxes increased to USD566.5 million, compared with USD556.9 million a year earlier.
Basic earnings per share for the year rose to USD4.59, up from USD4.37 per share the prior year.
The group said sales in its US division in the last quarter were driven by a variety of merchandise categories, with bridal, coloured diamonds, fashion jewellery, beads and watches all performing well, and the number of merchandise transactions increasing in both its Jared and Kay stores.
For the year as a whole, Signet said the number of merchandise transactions increased in both Kay and Jared, while the average merchandise transaction value increased in Kay, but declined slightly in Jared primarily due to changes in sales mix.
In the UK division, it said the sales performance in the fourth quarter was primarily driven by growth in bridal and fashion diamond jewellery, fashion and prestige watches, exclusive of Rolex, which is being offered in fewer stores.
Signet said average merchandise transaction value was flat at H.Samuel, in both the fourth quarter and the year as a whole, while it declined slightly in Ernest Jones, primarily due to sales mix. It said the number of merchandise transactions increased at Ernest Jones due primarily to increased focus on the bridal business and sales mix in watches, and decreased at H.Samuel primarily due to its store closing programme.
Signet said that e-commerce sales rose in both the US and in the UK.
Last month the group announced that it wouldbuy US-based speciality fine jeweler Zale Corp for about USD1.4 billion in cash, a major deal that will significantly boost its revenues and profits.
The group said the transaction is subject to Zale stockholder approval, regulatory approvals and customary closing conditions, and warned that the acquisition will result in the realisation of incremental expenses in the current financial year, which will primarily be transaction-related costs, it said.
"As we complete the transaction and put in place our new capital structure, we expect to utilise approximately USD600 million of receivables securitisation and USD800 million of other debt financing," said Chief Executive Mike Barnes in a statement.
The group said its expects that the capital structure will be cost effective from both an interest expense and tax perspective.
Signet said that it expects same store sales to increase between 3% and 4% in the first quarter of the current financial year, with earnings per share for the quarter, prior to acquisition costs, expected to be in the range of USD1.24 to USD1.28.
Signet shares were up 2.7% or 161.00 pence Thursday, trading at 6,135.00 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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