- Signet Jewelers (SIG.L), the Anglo-American jewellery retailer, reported on Thursday a sharp fall in fourth-quarter underlying sales and said it would outline plans to cut costs and generate more cash in March.
- The 1,959-store group, which owns Kay and Jared in the United States and Ernest Jones and H Samuel in the United Kingdom, said sales at stores open more than one year fell 14.9 percent in the 13 weeks to Jan. 31, reflecting subdued sales of gold, diamonds and wristwatches. Same-store sales fell 16.1 percent in the United States and were down 9.2 percent in the UK. Total fourth-quarter sales fell 18.9 percent to $1.124 billion.
- "On both sides of the Atlantic, we are reducing costs and focusing on cash generation," he said, adding that Signet would give more details on these areas when it published its full-year results on March 25.
- Signet forecast last month that pretax profit for the year to the end of January 2009 would be $180 million to $195 million. It said it would not be paying a dividend as it focused on reducing its debt, which was expected to be between $470 million and $490 million at the year end.
- The company also said it was in talks with its lenders about amending a banking covenant.
Technically the stock gapped up and is fast approaching the 20 day moving average; in a perfect world the stock jumps one more time to get to the 50 day moving average ($8.20s) which gives a much lower risk entry - however the stocks in trouble of late have not even been able to show that much strength...
On a related note - S&P warned of credit rating cuts on 6 more retailers yesterday (I have not looked at them individually but I am sure they are all flying higher today)- Macy’s Inc (M)., J.C. Penney Co.(JCP) and four other department-store chains may have their debt ratings cut by Standard & Poor’s as the U.S. recession worsens. Macy’s and J.C. Penney face being cut to non-investment grade, or junk, by S&P. Dillard’s Inc (DDS)., Neiman Marcus Group Inc., Sears Holdings Corp (SHLD). and Nordstrom Inc. (JWN) also might be downgraded, the firm said today in a statement.
- The S&P decisions “reflect our deepening concern about the impact of the U.S. recession on the increasingly troubled department store sector,” analyst Diane Shand said in the statement. Higher unemployment, the housing market and ongoing financial-market turmoil make it likely that the recession will get worse through the first half of the year, S&P said.
