A sparkly fourth quarter for Signet Jewelers

Signet Jewelers attracted large numbers of Christmas shoppers over the fourth quarter as the parent company of Zales, Kay and Jared posted a jump in same-store sales.



The world's largest retailer of diamond jewelry reported that for the period ended Jan. 30, same-store sales increased 4.9%. Diluted earnings per share grew over 20%. Adjusted EPS increased over 18% and ahead of the guided range.



“Signet delivered outstanding fourth quarter results exceeding the high end of our adjusted EPS guidance with year-over-year growth of 18.6%, driven by a solid 4.9% increase in same-store sales," said Mark Light, CEO of Signet Jewelers. "Our business was strong in the fourth quarter as evidenced by our accelerating same-store sales performance. At the same time our credit metrics improved from the third quarter in line with expectations and we remain confident in the strength of our credit portfolio. We are pleased with our first quarter to date operating results and continue to see strength in the business including credit. We look forward to updating our Q1 performance on our full earnings call March 24. After having operated Zales for a full year we have identified a significant number of incremental synergy opportunities and are increasing our expectations for total synergies from $150 million - $175 million to $225 million - $250 million by the end of FY 2018 with a faster pace of synergy realization than previously guided."



Signet’s credit program contributed to profitability during the period, the company said.



Light added: “Confidence in our business and the strength of our cash position enables us to maintain our capital allocation strategy that provides for meaningful returns to our shareholders. We see substantial value in our shares and our share repurchase program begins this week. Our team is doing an outstanding job of driving growth and delivering results."



The company's board has approved a new share repurchase program of $750 million along with an 18% increase in its dividend. Signet raised its synergy guidance to between $225 million and $250 million from between $150 million and $175 million for the three years betwen Feb. 1, 2015 and Jan. 31, 2018 due to "incremental synergy opportunities" the company identified in its merger with Zales, Light said.



Signet operates approximately 3,600 stores primarily under the name brands of Kay Jewelers, Zales, Jared The Galleria Of Jewelry, H.Samuel, Ernest Jones, Peoples and Piercing Pagoda.