Signet Jewelers Limited has announced its financial results for the second quarter of Fiscal 2025, showing a mix of both positive and negative results as it continues to navigate a challenging market environment.
Revenue and Sales Performance
For the second quarter of Fiscal 2025, Signet reported total sales of $1.49 billion, a 7.6% decrease from the $1.61 billion recorded in the same period of Fiscal 2024.
Same store sales (SSS), which include both physical stores and online channels, declined by 3.4%. In North America, the company’s largest segment, total sales dropped 6.9% year-over-year to $1.4 billion. International sales fell by 15.2%, reaching $86.5 million, largely due to the sale of its prestige watch locations in the UK and a lower number of transactions.
The average transaction value (ATV) in North America increased by 1.6%, despite a lower volume of transactions. International same store sales also rose by 1.7%.
Margins and Profitability
Signet’s gross margin improved by 10 basis points to 38.0% of sales, largely due to a 120 basis point improvement in merchandise margins, resulting from a higher mix of services and fashion jewelry. This was partially offset by the impact of fixed costs, such as store occupancy. The company noted its strategy of introducing new merchandise at competitive price points as a contributing factor.
Signet posted an operating loss of $100.9 million, down from an operating income of $90.2 million in Q2 of Fiscal 2024. This loss was primarily due to $166 million in non-cash impairment charges related to the Blue Nile trade name and Digital Banners goodwill. On an adjusted basis, operating income was $68.6 million, down from $102.7 million the previous year.
Cost-Saving Measures and Guidance
Signet expects to achieve up to $200 million in cost savings for Fiscal 2025, up from its previous guidance of $150 to $180 million. These savings are intended to help the company manage competitive pressures in the second half of the year. The company also extended its asset-backed loan facility for three years, now scheduled to mature in 2029, which it expects will provide additional liquidity.
For the third quarter of Fiscal 2025, Signet is forecasting total sales between $1.345 billion and $1.380 billion, with same store sales expected to range between a decline of 1% and an increase of 1.5%. Adjusted operating income is projected to be between $8 million and $25 million.
For the full year, the company anticipates total sales between $6.66 billion and $7.02 billion, with adjusted diluted earnings per share forecasted to range from $9.90 to $11.52.
Implications
Signet’s results for the second quarter of Fiscal 2025 reflect challenges, including sales declines and impairment charges. The company is working to improve merchandise margins and control costs, while also continuing its share repurchase program. Engagement sales are showing some recovery, and the company has stated it expects to meet its full-year targets.
