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Signet’s Q4 sales up 45.5%
The addition of Zale Corporation to its portfolio added to the increase in sales
By: Diamond World News Service
Mar 27 2015 9:59AM
Reference: 11313  

Commenting on the company’s performance in fiscal 2015 ending January 31, 2015, Mark Light , Chief Executive Officer of Signet, said, "We had an outstanding finish to another strong year of growth for Signet.”

The company has released its financial results for the fourth quarter period. The results reflect the addition of Zale Corporation, acquired on May 29, 2014, and the purchase accounting and transaction costs related to that acquisition.

In the fourth quarter, its sales were up 45.5 percent (on y-o-y basis) to $2.276 billion. The increase was primarily driven by the addition of the Zale division which added $636.7 million of sales to fourth quarter Fiscal 2015. Same store sales increased 4.2 percent compared to an increase of 4.3 percent in the fourth quarter Fiscal 2014. eCommerce sales were $149.6 million ($79.0 million in Q4 of fiscal 2014), up 89.4 percent, also due principally to the addition of Zale which added $54.8 million in eCommerce sales.

Bridal and higher price point fashion diamond collections drove the sales at Sterling Jewelers. The average transaction price in Sterling increased by 4.5 percent and the number of transactions decreased by 1.2 percent due to sales mix changes. Zale division sales were favorably driven by bridal, branded diamond collections and new marketing strategies. Sales were also favorably impacted by the removal of non-productive inventory, which allowed space for new merchandise. Total sales were unfavorably impacted by a deferred revenue adjustment of $12.8 million due to purchase accounting. UK Jewelry division sales increases were broad-based driven principally by strategic initiatives to grow diamond sales as well as strong sales of fashion watches. The number of transactions and average transaction price for the division increased by 1.6 percent and 7.0 percent, respectively, due to broadly strong performance across the merchandise portfolio -- watches, branded fashion, and branded bridal.

Mr. Light added, “Our newest division, Zale, delivered a 3.7% increase in fourth quarter same store sales.”

Michele Santana , Chief Financial Officer of Signet, said, "Confidence in our business model and the strength of our free cash flow enables us to commit to a comprehensive capital allocation strategy that provides for sustained revenue growth together with meaningful returns to our shareholders. We will continue to target investment grade ratings and up to a 3.5-times adjusted leverage ratio. In addition, as part of our capital allocation strategy for Fiscal Year 2016, we plan to repurchase $100 million to $150 million of our stock and increase our dividend."

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