Signet Jewelers Limited announced that same store sales declined 11.5 percent during the first quarter of fiscal 2018 — the 13 weeks ended April 29, 2017.

Signet attributed the slide to the later timing of the Mother's Day holiday. The financial impact of Mother's Day is typically split between first quarter and second quarter. However, in fiscal 2018, it was entirely a second quarter impact. This timing was unfavourable to sales and earnings per share (EPS) in the first quarter and was favourable to sales and EPS in the second quarter.

Signet said the amount of the shift was unfavourable to same store sales by 330 basis points and to EPS by approximately $0.17. The company said it \ anticipates a commensurate favourable shift in the second quarter.
CEO Mark Light said, “As anticipated, we had a very slow start to the year as continued headwinds in the overall retail environment were exacerbated by a slowdown in jewellery spending and company specific challenges. However, Signet's Q1 same store sales improved sequentially, when normalised for Mother's Day, and we were pleased with the holiday's results.”

He added, “We continue to take decisive action to adapt our business to the current challenging retail environment and to position our company for long-term growth. Importantly, during the quarter, we made significant improvements to our online platforms and continued to accelerate our digital marketing efforts which resulted in a measurable sequential improvement in our e-commerce performance.”

Light also announced the phased, strategic sale of Signet’s consumer credit portfolio and the establishment of long-term partnerships to outsource its customer credit offerings. "In addition, today we announced the phased, strategic outsourcing of our credit portfolio through a structure that is designed to not only enable us to maintain our competitive credit offering and sales, but to also allow us to further increase our operational focus on the growth of our retail platforms,” he said.

Signet will sell $1 billion of its prime-only credit quality accounts receivable to Alliance Data Systems Corporation at par value. Additionally, under a seven-year agreement, Alliance Data will become the primary provider of credit funding, servicing and associated program functions to Signet’s Kay, Jared and Regional brands’ customers.

Signet will retain the existing non-prime accounts receivable on its balance sheet and continue to originate new accounts, while outsourcing the credit servicing functions of those accounts to Genesis Financial Solutions, with an initial term of five years.

Signet will also form a seven-year partnership with Progressive Leasing, a subsidiary of Aaron’s, Inc., to provide a lease-purchase payment program to Signet customers who do not qualify for Signet’s credit programs, or do not wish to pursue a credit option to access Signet’s merchandise.

Signet remains on-track to close approximately 165 to 170 stores in Fiscal 2018 and open about 90 to 115 stores for a net selling square footage change of flat to a decline of 1 percent. Store closures are primarily focussed on mall-based regional brands not meeting Signet's financial return expectations. Store openings will be primarily Kay off-mall.

https://www.gemkonnect.com/news/signet-q1-same-store-sales-slide-115-outsources-customer-credit