Even though Signet’s second-quarter comps fell 12%, its CFO tells JCK the company has spotted some positive signs for the holiday.
“We do anticipate a cautious consumer, but trends reflect modest improvement within the jewelry category,” says chief financial, strategy, and services officer Joan Hilson (pictured). “June and July [results] saw consequential improvement from earlier in the quarter.”
Hilson says that gifts moved to higher price points during the quarter and that sales of lower-price-point fashion also increased. Though the under-$1,000 category had been weak for a while, sales at that level recently improved, which Hilson attributes to a rebound in consumer confidence.
She expects that current macroeconomic pressures “are likely to drive holiday shopping later in the season,” but Signet will “use strategic levels of promotion to improve traffic and conversion” this holiday.
Among the bright spots Hilson notes in Signet’s most recent results: Average transaction value has stabilized, so it is now roughly in line with last year, and the company brought down inventory to 20% below pre-pandemic levels.
Hilson says engagements have fallen for the past few years—in part because of the COVID-19 pandemic—but company metrics indicate they will stabilize by the end of 2023 and increase over the next few years.
“While every couple is unique, dating and relationships tend to follow patterns,” said CEO Gina Drosos on the company’s conference call last week. “Not every couple experiences all of the 45 milestones we track. But we know that once they reach 25 to 30 of these milestones, they become statistically significantly more likely to move on to engagement.”
Drosos said that one “relationship trigger”—couples attending a sporting event or concert together—is up 7% over last year.
Signet’s expansion of its services business—reflected in its July purchase of SJR National Repair—is paying off, Hilson says. “Services is going very nicely,” she says. “They grew again in the quarter.”
She adds that the acquisition of SJR “went very well. We were able to bring watch repair in-house, and with the integration of the Blue Nile facility, it is instantly accretive.”
Signet also plans to open 20 more Diamonds Direct stores. It acquired the chain in 2021.
(Photo courtesy of Signet)
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