UPDATE 2-Kay Jewelers parent Signet gets boost from new technology, ads

Thu Mar 28, 2013 11:34am EDT

* Sees first-quarter same-store sales up 5-7 pct

* Raises quarterly dividend by 25 pct to $0.15/share

* Fourth-quarter earnings/share $2.12 vs est $2.09

* Fourth-quarter sales rise 11.8 pct to $1.51 bln

* Shares rise to their highest in more than two decades

March 28 (Reuters) - Signet Jewelers Ltd reported better-than-expected quarterly results and raised its dividend by 25 percent, as sales at its Kay Jewelers chain got a boost from a new ad campaign and improved technology.

Shares of the company rose as much as 10 percent to $69.41, their highest in more than two decades.

Earlier this year, Signet reported impressive holiday season sales even as rivals Zale Corp and Tiffany & Co said sales growth had slowed.

The company invested in eight new TV ads in the holiday quarter, and deployed tablets at its Kay and Jared stores to aid shoppers, it added. It also launched new websites and mobile apps for the stores. eCommerce sales rose 47 percent in the quarter to $63.9 million.

Chief Executive Mike Barnes said the retailer had benefited from a wide range of technology initiatives.

"We are seeing the benefit online and in-store, and the technology that we have in store is just making that even stronger," Barnes said on a conference call.

Analyst Jennifer Davis of Lazard Capital Markets said the company should benefit from advantages such as differentiated branded merchandise and high customer awareness driven by national television advertising.

Signet, which also operates the higher-end Jared chain in the United States and the Ernest Jones stores in Britain, said sales at stores open at least a year are likely to rise 5 to 7 percent in the current quarter.

It reported a same-store sales increase 3.5 percent in the fourth quarter.

Same-store sales at Kay, which contributes about half of Signet's revenue, were up 5.9 percent, while at Jared, where items are about twice as expensive as at Kay, they rose 5.5 percent during the quarter.

Revenue rose 11.8 percent to $1.51 billion during the quarter ended Feb. 2, above analysts' average estimate of $1.49 billion, according to Thomson Reuters I/B/E/S.

The company forecast earnings of $1.07 to $1.12 per share for the first quarter, largely below analysts' expectations for $1.12 per share.

Net income for the fourth quarter, when jewelers typically make half their annual profit, rose to $171.8 million, or $2.12 per share, from $156.6 million, or $1.79 per share, a year earlier.

Analysts on average were expecting earnings of $2.09 per share.

Signet increased its dividend to 15 cents per share per quarter.

Shares of the company were trading up 7 percent at $67.70 on the New York Stock Exchange on Thursday.

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