Signet expects that jewelry sales will decline this year, by around a “mid single-digits” percentage, CEO Gina Drosos (pictured) told analysts on a conference call following release of the company’s financial results.
“We’re seeing consumers continue to be value-oriented,” she said. “That’s how they were during [the fourth quarter] and Valentine’s Day: a late shopper, highly focused on value.”
But Signet predicts a rebound in engagements in the second half of the year, which will fuel increased bridal sales.
“Engagements reached a trough [last year],” Drosos said. ‘We are seeing engagements recover, as we were expecting they would. We expect a gradual improvement in engagement trends over the next three years. It takes a bit to recover.”
She noted that the company’s data platform now includes information on 17 million consumers in romantic relationships, which allows the company to personalize its marketing and track engagement trends.
Drosos said Signet’s average sale has declined because of “significant discounting from independent jewelers on lab-created, both on bridal and fashion…. They didn’t predict the engagement trough as well as we did and were over-inventoried all year.”
She believes “consumers are becoming more aware that lab-created prices are falling, and while they may be great for fashion jewelry, we think there’s something rare and individual about a natural diamond, and we think that’s a potential tailwind for natural diamonds in the year ahead.”
Overall, Signet’s comps dropped 9.6% in the fourth quarter of fiscal 2024 (ended Feb. 3), compared with that period the previous year. Total sales for the quarter were $2.5 billion, down 6.3% year-over-year. GAAP operating income was up, however—hitting $416.3 million, compared with $369.5 million last year.
Signet is closing up to 30 Ernest Jones stores in the United Kingdom, and plans to focus on its H. Samuel banner in the U.K. going forward. In November, Signet sold 19 Ernest Jones locations to Watches of Switzerland.
The company also announced that H. Todd Stitzer, the former Cadbury CEO, will step down as board chair, having reached his 12-year term limit.
Helen McCluskey, former president and CEO of Warnaco Group, will succeed Stitzer as Signet’s non-executive chair.
Signet has raised its share buyback program from approximately $650 million to $850 million, and increased its common dividend. It repurchased $21.8 million in stock (approximately 246,000 shares) during the fourth quarter.
(Photo courtesy of Signet)
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