Signet Jewelers Ltd., one of the main jewelry store chains in the United States and United Kingdom, posted fiscal fourth-quarter net income up 10 percent.
The jeweler said its results were boosted by an acquisition and customers buying more items at its U.S. Kay and Jared jewelry stores.
Signet posted profit of $171.8 million for the quarter ended February 2 from $156.6 million a year before.
Revenues surged 12 percent to US$1.51 billion from US$1.35 billion a year earlier, beating analysts' forecasts of US$1.49 billion in revenue. The company's results were beefed up from its US$57 million acquisition of the Ultra jewelry store chain last year. The firm said it will convert most of the Ultra stores to Kay outlets by the end of the second quarter.
As for same store sales, a key indicator for the retail industry relating to stores open for at least a year, they climbed 3.5 percent.
U.S. revenue at shops open at least a year jumped 4.9 percent. However, in the U.K. same-store sales declined by 1.9 percent, with fewer clients and increased purchases of discounted goods.
"The economic environment [in the U.K.] remained challenging and customer traffic was lower, particularly in the fourth quarter," says Chief Executive Officer Michael Barnes. "In addition, customers continued to gravitate to promotional merchandise which reduced the effectiveness of price increases in gross margins."
For 2012, profit rose 11 percent to $359.9 million, while revenue jumped 6 percent to $3.98 billion. Same-store sales open at least a year climbed by 3.3 percent.
For the current quarter, Signet forecasts same-store sales to jump 5 to 7 percent.
For the fiscal year, total e-commerce sales surged on the year by 40.6 percent to $129.8 million from $92.3 million. U.S. e-commerce sales jumped by 48.0 percent to $101.4 million from $68.5 million, while U.K. e-commerce sales rose 19.3 percent to $28.4 million from $23.8 million.
“One of the strongest initiatives that I have been driving in the last couple of years is e-commerce,” says Barnes. “And when you look at the growth, the long-term growth that we've had there, it's pretty astounding.”
Internet sales accounted for 3.3 percent of sales in fiscal year 2012 compared to 2.5 percent in the previous year. “I believe everything we're doing from a digital standpoint will continue to drive forward and we can expect to see continued gains in that area,” Barnes comments.
"We are also investing aggressively in growing our in-store technology, e-commerce and social media to build upon our multichannel offering. Kay and Jared stores went through their first holiday season in fiscal 2013 that they were armed with computer-assisted selling tablets. These touch screen devices were seen by both our associates and our customers as highly successful selling tools.
"In social media, we remain pleased with our customers' response to the content we're delivering. Our fan base and followers continue to climb and social media outlets are driving more traffic to our stores and our e-commerce sites. We'll continue providing customers who visit our digital environment with an outstanding shopping experience. For Kay and Jared, we operated newly relaunched websites as well as new mobile apps," Barnes adds.
Other significant drivers were colored diamonds, particularly our artistry and vivid diamond collections, as well as earrings and necklaces.