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UPDATE 2-Kay Jewelers parent Signet says Sandy weighing on sales
November 20, 2012 / 12:55 PM / 5 years ago

UPDATE 2-Kay Jewelers parent Signet says Sandy weighing on sales

* 3rd-qtr profit 43 cents/share vs 30 cents a year earlier

* Sees 4th-quarter profit $1.95-$2.10/share

* Shares down 1.3 pct in premarket trade

Nov 20 (Reuters) - Signet Jewelers Ltd reported a higher-than-expected quarterly profit on Tuesday, lifted by gains at its mid-priced Kay Jewelers chain and improved sales of higher-margin jewelry, but said Superstorm Sandy was weighing on business.

Signet shares were down 71 cents, or 1.3 percent, to $52.28 in premarket trading in New York. They were up 0.8 percent in London but had surrendered some earlier gains.

The company, which also operates the higher-end Jared chain in the United States and the Ernest Jones stores in Britain, said it expects sales at stores open at least a year to be up by a low-single-digit percentage rate in the current holiday quarter.

Chief Executive Mike Barnes said November has been “challenging” because of the disruption caused by Sandy, which hit the East Coast on Oct. 29, killing dozens and knocking out power to millions of homes and businesses.

Same-store sales at Kay, Signet’s biggest chain, rose 5.5 percent during the third quarter, ended Oct. 27. In Britain, where the company gets about 18 percent of its sales, same-store sales rose 2.3 percent, a marked improvement after several quarters of sluggish consumer spending in that market.

Companywide, same-store sales were up 1.4 percent. Overall revenue rose 0.1 percent to $716.2 million, coming in below analysts’ average forecast of $730.6 million, according to Thomson Reuters I/B/E/S.

Same-store sales at Jared, where items are about twice as expensive as at Kay, fell 4.1 percent because a Rolex watch line was discontinued. Otherwise, same-store sales would have been up 5.5 percent.

Net income for the third quarter rose to $34.9 million, or 43 cents per share, from $26.1 million, or 30 cents per share, a year earlier. Analysts’ average forecast was 37 cents a share.

The company forecast earnings of $1.95 to $2.10 per share for the holiday quarter, when Signet typically generates nearly half of its annual profit.

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