Signet Group total sales down by 7.3%

22 Dec '08

5 min read

Signet Jewelers Ltd announced its third quarter unaudited results for the 13 and 39 weeks to November 1, 2008. These results are prepared under US GAAP. In the 13 week period to November 1, 2008, Group total sales declined by 7.3% to $629.3 million (13 weeks to November 3, 2007: $678.7 million) and by 4.3% at constant exchange rates (see note 11).

Same store sales decreased by 6.6%. Reflecting the broader retail and consumer environment net operating loss was $14.2 million (13 weeks to November 3, 2007: net operating income $10.1 million) and loss before income tax was $23.6 million (13 weeks to November 3, 2007: income before income tax $3.8 million). Net loss was $15.1 million (13 weeks to November 3, 2007: $2.5 million net income). Diluted loss per share was $0.18 (13 weeks to November 3, 2007: diluted earnings per share $0.03).

In the 39 week period, Group total sales decreased by 2.6% on a reported basis to $2,220.7 million (39 weeks to November 3, 2007: $2,280.5 million) and by 1.6% at constant exchange rates (see note 11). Same store sales were down by 4.3%. Net operating income was $69.2 million (39 weeks to November 3, 2007: $133.8 million) including items relating to the move in domicile of the Group of $10.5 million (2007/08: nil). Income before income tax declined to $47.1 million (39 weeks to November 3, 2007: $117.5 million).

The average exchange rate for the period was 1 pound Sterling/$1.92 (39 weeks to November 3, 2007: 1 pound/$2.00). Net income was $30.3 million (39 weeks to November 3, 2007: $76.8 million). Diluted earnings per share were $0.35 (39 weeks to November 3, 2007: $0.90). Diluted earnings per share before the items relating to the move in domicile of the Group were $0.44 (see note 11).

In the 13 week period to November 1, 2008, total sales decreased by 4.3% to $467.3 million (13 weeks to November 3, 2007: $488.2 million). Same store sales were down by 7.9%, with the last seven weeks of the quarter down by about 11% reflecting heightened consumer uncertainty. A net operating loss of $6.2 million was reported (13 weeks to November 3, 2007: net operating income $12.6 million) reflecting the impact of the same store sales decline.

In the 39 week period, total sales declined by 1.8% to $1,674.0 million (39 weeks to November 3, 2007: $1,705.1 million). Same store sales declined by 6.0%. US net operating income was $90.7 million (39 weeks to November 3, 2007: $142.5 million). The operating margin was 5.4% (39 weeks to November 3, 2007: 8.4%).

The net bad debt charge was 4.8% of total sales (39 weeks to November 3, 2007: 3.3%), with the increased rate somewhat offset by higher income earned on the receivables. As expected the merchandise gross margin rate was up by 80 basis points as a result of price increases which more than offset the rise in commodity costs and increased promotional activity. The division is on track to achieve a full year merchandise gross marginrate somewhat ahead of last year's level.

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