By Katie Byard
Beacon Journal business writer
Signet Jewelers Ltd., parent of Akron’s Sterling Jewelers, reported a slight decline in profit, but an increase in sales for the second quarter.
The company reported Thursday that net income was $67.4 million, or 84 cents a share. That’s down 1.2 percent from $70.7 million, or 85 cents a share, for the year ago quarter.
Signet [NYSE: SIG] is the largest operator of jewelry stores in the United States and the United Kingdom. Its Sterling division, based on Ghent Road in Akron, operates more than 1,300 stores nationwide, including the Kay and Jared chains.
CEO Michael Barnes said in a written statement, “We delivered solid second-quarter results as expected,” driven by increases in same-store sales — that is, sales at stores open at least a year.
Barnes said that the earnings of 84 cents per share were at the upper end of the company’s earlier earnings guidance.
Shares closed at $67 Tuesday, down $2.83 or 4.05 percent. Shares are up 26 percent, including dividends, since Jan. 1 and are up 47 percent from a year ago.
Barnes noted in a conference call with analysts the company saw an increase in profits when Ultra stores are excluded. Signet bought Ultra Stores Inc. of Chicago last year. Ultra has stores mostly in outlet malls. The company has converted nearly 70 Ultra stores to Kay outlet stores, and now is operating approximately 120 Kay outlets and 39 Ultra stores, Barnes told analysts.
Barnes also pointed out that as expected the company’s results were affected by Mother’s Day — a holiday that generates significant sales — being in the first quarter this fiscal year.
For the second quarter, sales at all of the company’s stores open at least a year increased 3.6 percent. Sales at U.S. stores open at least a year increased 4.9 percent, led by Kay stores, which had a 5.8 percent increase in stores open at least a year, and Jared, up 5.5 percent. Sales at U.K. stores open at least a year declined 2.4 percent.
Barnes told analysts that the increase in sales at Kay and Jared was driven in part by sales of bridal-related jewelry, colored diamonds and watches. Branded items continue to sell well, he said.
Online sales in the United States, he noted, increased 36 percent to $25.3 million.
Total sales companywide increased 3.1 percent to $880.2 million, compared to $853.9 million last year.
For the third quarter, Signet said it expects same-store sales to increase in the low single-digit range, and earnings per share of 37 to 43 cents.
For the full fiscal 2014 year, the company said it expects capital expenditures of $180 million to $195 million. Projects include opening 75 to 85 new Kay and Jared stores and remodelings.
U.S. sales represent more than 80 percent of Signet’s revenues.
Katie Byard can be reached at 330-996-3781 or firstname.lastname@example.org.