* Signet U.S. same-store sales up 4.7 pct
* CFO says bodes well for Valentine's Day
* British same-store sales down 2.6 pct
* Shares up 8.4 pct, Tiffany, Zale also up (Adds comments from conference call, analyst comment, byline)
By Phil Wahba
Jan 8 Signet Jewelers Ltd reported brisk holiday season sales at both of its major U.S. chains, the mid-priced Kay Jewelers and the higher end Jared stores, and said business has remained good as the jeweler heads toward Valentine's Day.
The report eased concerns over whether slumping consumer confidence in December might dent sales of items shoppers can easily do without, such as jewelry, especially after signs of slowing sales in the autumn.
Signet shares were up 8.4 percent to $58.37 in morning trading, and shares of rivals Zale Corp and Tiffany & Co were up 2.2 percent and 1 percent, respectively. Those competitors are scheduled to report sales on Thursday.
Sales at Signet's U.S. stores open at least a year rose 4.7 percent in November and December, a period that can account for about half of a jeweler's annual profit and a third of sales.
At Kay, where Signet gets half of its revenue, same-store sales rose 5.8 percent, overcoming a dent in revenue early in the period because of Hurricane Sandy, helped by more transactions and higher average prices.
At Jared, sales rose 4.8 percent, after declining last quarter, suggesting more affluent shoppers have not pulled back on their consumption despite concerns they would.
"The strong performance in Kay and Jared bodes well for Valentine's Day," Chief Finance Officer Ron Ristau told Wall Street analysts on a conference call.
Valentine's Day is the third most important occasion for jewelers after Christmas and the engagement season in spring.
Signet, which has a 10.4 percent share of the U.S. jewelry market according to a report by IBISWorld last month, making it almost as big as rivals Zale and Tiffany put together, raised the lower end of its holiday quarter profit forecast range by 10 cents per share. The company now expects a profit of $2.05 to $2.10.
Chief Executive Mike Barnes said Signet had not had to resort to "overpromoting" during the Christmas period to generate those sales gains, a promising sign for archrival Zale, which caters to a price sensitive shopper.
New merchandise at Signet fueled the gains, while Zale's new diamond and bridal and colored diamond jewelry should lift its holiday sales for that retailer, Citi analyst Oliver Chen said in a note to clients.
Signet's numbers also suggested that Tiffany's sales from less expensive items, a weak point this year for the high end jeweler, could improve, Chen also noted.
In Britain, where Signet gets one-sixth of its revenues, it was a different story. Same-store sales resumed their downward trajectory of recent years over the holidays, after showing improvement last quarter. Same-store sales at its H.Samuel and Ernest Jones chains fell a combined 2.6 percent.
Barnes said British shoppers seemed to have shifted their spending to items like electronics, rather than jewelry. But he did say that business improved in Britain after the holidays. (Additional reporting by Maria Ajit Thomas in Bangalore; Reporting by Phil Wahba in New York; Editing by Theodore d'Afflisio and Marguerita Choy)