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Kay Jewelers' sales gains lift Signet quarterly results
(Reuters) - Signet Jewelers Ltd (SIG.N) (SIG.L) posted a larger-than-expected quarterly profit on Thursday, with big gains at its mid-priced Kay Jewelers chain spurring renewed sales momentum.
Sales at all of its major chains rose and showed more vigor in the second quarter that ended July 28 than in the preceding quarter when U.S. consumer confidence waned and fears of a worsening eurozone crisis led many middle-class shoppers to hold off on buying jewelry.
At its U.S.-based Kay chain, which accounts for almost half of revenue and caters to more price-conscious shoppers, sales at stores open at least a year rose 12.5 percent, compared with a 2.1 jump in the first quarter. At Signet's higher-end Jared stores, they rose 2.4 percent, after barely rising in the spring quarter.
In the United States, Signet competes most directly with Zale Corp (ZLC.N) and Tiffany & Co (TIF.N), which both report results next week.
In Britain, sales continued to improve despite what Signet had warned in May would be a "promotional" quarter. Its Ernest Jones chain's same-store sales rose 4.4 percent. Still, the company's gross margin there took a hit from shoppers' preference for items that were on sale, Signet said.
Companywide, same-store sales rose 7.1 percent, compared with a slower 1.2 percent in the preceding quarter.
Signet said it expected companywide same-store sales to be up by a low- to mid-single-digit percentage rate this quarter.
The company forecast earnings of between 34 cents and 38 cents per share for the current quarter, compared with the 36 cents Wall Street was expecting, according to Thomson Reuters I/B/E/S.
Net income rose to $70.7 million, or 85 cents per share, from $66.3 million, or 76 cents per share, a year earlier, beating Wall Street forecasts by 2 cents a share.
Its shares rose 1.3 percent to $48.10 in premarket trading in New York, and were up 0.6 percent in London.
(Reporting by Phil Wahba in New York; Editing by Lisa Von Ahn and Maureen Bavdek)
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