By Katie Byard
Beacon Journal business writer
Signet Jewelers Ltd., the parent of Sterling Jewelers, which is headquartered in Akron and operates Kay and Jared stores, saw its third-quarter profits drop slightly on costs related to its purchase of Ultra stores last year.
Meanwhile, sales rose, led by a 5.8 percent increase in sales at Kay stores open at least a year, the company said Tuesday.
Signet [NYSE: SIG], the largest operator of jewelry stores in the United States and the United Kingdom, generates the vast majority of its sales from stores such as Kay and Jared in the United States.
Profits for the third quarter were $33.6 million, or 42 cents a share, down from $34.9 million, or 43 cents a share, for the third quarter a year ago.
Signet pointed out in a statement that when results from its Ultra stores are excluded, earnings per share increased to 45 cents, up 4.7 percent from the same quarter a year ago.
The company last year purchased Ultra Stores Inc. of Chicago for $57 million. Ultra has stores mostly in outlet malls. Earlier this fall, the company said it had converted nearly 70 Ultra stores to Kay outlet stores, and was operating approximately 120 Kay outlets and 39 Ultra stores.
For the fourth quarter, which includes the all-important holiday shopping season, Signet said it expects stores open at least a year to see sales increase in the low to middle single-digit range.
Shares closed Tuesday at $77.81, up $1.34. Shares are up 47 percent, including reinvested dividends, since Jan. 1 and are up 50 percent from a year ago.
For the third quarter, sales totaled $771.4 million, up $55.2 million or 7.7 percent, compared to $716.2 million in the 13 weeks ended October 27, 2012.
U.S. division sales
In the United States division, total sales were $632.1 million, up $56.5 million or 9.8 percent, from sales totaling $575.6 million in the year-ago quarter.
Sales at U.S. stores open at least a year increased 4.2 percent compared to an increase of 1.2 percent in the year-ago quarter.
Signet said sales increases were driven by “particular strength” in bridal-related jewelry, watches and colored diamonds.
Kay and Jared stores saw increases in customers as well as the average amount each customer spent.
Signet’s online sales in the United States were $16.2 million, up 11.7 percent from $14.5 million in the third quarter a year ago.
The company said it expects capital expenses for the year to total $180 million to $185 million, including costs related to the opening of 75 to 85 new Kay and Jared stores, remodeling projects, digital and information technology expenditures, and developing its outlet stores.
The Sterling division of Signet operates more than 1,400 jewelry stores across the country. Earlier this year, Sterling reported it had more than 2,000 employees in the Akron area.
Rival jewelry retailer Zale Corp. of Irving, Texas, reported after the market closed Tuesday that it narrowed its quarterly loss to $27.3 million, or 83 cents per share, from $28.3 million, or 88 cents per share, last year. The prior year included a 6-cents-per-share benefit from the settlement of a lawsuit. Sales at Zale increased 1 percent to $362.6 million.
The Zale results exceeded market forecasts for a loss of 85 cents per share on revenue of $360 million.
Separately, Tiffany & Co., the New York-headquartered chain, reported that its quarterly net income climbed 50 percent, helped by gains in the Asia-Pacific region. It earned $94.6 million, or 73 cents per share, on revenue of $911.5 million, far exceeding analyst estimates of 58 cents per share on revenue of $888.4 million, according to FactSet.
Tiffany results are considered a barometer of luxury spending.
Katie Byard can be reached at 330-996-3781 or email@example.com. The Associated Press contributed to this report.