Signet Jewelers, the parent company of Zales and Kay Jewelers, has raised its sales and earnings outlook for the year after it beat market expectations in the third quarter.
The company saw its sales rise by 2.9% to $1.6 billion, with sales of its high-end products making up for lackluster demand among low-income shoppers.
The retailer reported adjusted earnings of $0.74 per share, which was higher than analysts’ expectations of $0.31 per share.
“Our strong third-quarter results exceeded guidance and evidence why we believe Signet is uniquely positioned to deliver consistent market share growth and value creation,” said CEO Virginia C. Drosos.
The company has also seemingly benefited from not having to deal with excess inventory — a challenge that has weighed down the performance of many other players in the retail landscape this past quarter. According to Signet CFO Joan Hilson, the company optimized its inventory levels by ensuring easy cross-channel access to its products, which helped turn inventory at “nearly double pre-transformation levels.”
“We are entering this holiday season with the healthiest and most consumer-inspired inventory in our history — down 2% despite tiering up our accessible luxury offering and with clearance at the lowest levels since our transformation began, excluding acquisitions,” Hilson said.
In August this year, the company acquired jewelry eTailer Blue Nile for $360 million in an effort to build out its eCommerce business and attract younger, more affluent and ethnically diverse shoppers.
Considering Blue Nile’s performance, Signet now expects its sales to be in the $7.77 billion to $7.84 billion range in fiscal 2023, which will be higher than the company’s previous estimate of $7.60 billion to $7.70 billion.