Signet Q3 Same Store Sales -5%, Lowers Whole Year Guidance
Signet Jewelers Limited announced its financial results for the third quarter of fiscal 2018 — the 13 weeks ended October 28, 2017. Same store sales were down 5 percent. Signet said the factors influencing the results included an estimated 120 basis point negative impact due to weather-related incidents and systems and process disruptions associated with outsourcing of the credit portfolio.
Saying that it is experiencing greater than anticipated disruptions related to the complex process of transitioning its credit portfolio to Alliance Data Systems and Genesis Financial Solutions, Signet said it expects the financial impact to carry forward into the fourth quarter given the significant changes to the credit-related processes.
As a result, the company has revised its guidance for the year, predicting a drop in same store sales by a mid-single-digit percentage figure.
Company CEO Virginia Drosos said, “Signet had a challenging third quarter. In addition to an anticipated sequential slowdown in our same store sales, unfavourable weather-related incidents, along with unexpected disruptions during the transition of our credit services, further negatively impacted results. Encouragingly, within this backdrop, we advanced our strategic priorities, which are beginning to deliver results.”
She went on to say, “We are seeing positive customer reaction to enhancements in our OmniChannel experience, as well as streamlined marketing messages and improved fashion assortment. We have also implemented several synergies from the R2Net acquisition ahead of plan. Unfortunately , these wins are being overshadowed by the systems disruptions and significant process changes associated with the outsourcing of our credit portfolio, with particular impact at Kay.”
She concluded, “While the identified systems issues are behind us, we expect some credit process disruption to continue and to negatively impact our fourth quarter and full – year performance. As a result, we now expect our fourth quarter same store sales to be down low-to mid-single digits, leading to Fiscal 2018 same store sales down mid-single digits and earnings ranging from $6.10 to $6.50 per share.”