Cheaper diamond prices helped H Samuel and Ernest Jones deliver a marked improvement in third quarter sales as consumers snapped up more affordable sparklers, parent company Signet said today.
The group, which also operates the Leslie Davis brand in the UK, reported a narrowing in same-store sales declines to 0.2% in the 13 weeks to October 31, from a 4.3% plunge in the previous three months.
Ernest Jones put in a “noteworthy” performance, reversing a 6.2% drop in the second quarter to a fall of 0.3% in the third, according to the group.
It said a tentative recovery in consumer confidence added to higher sales of diamond products as revenues improved.
The group has been able to use its buying power to take advantage of cheaper diamond prices this year.
The slight shift in the sales mix towards diamond products rather than gold contributed to an increase in average selling prices of 9.2% at H Samuel and 4.7% at Ernest Jones in the first half.
But despite the better third quarter result, Signet cautioned over the trading outlook.
Walker Boyd, group finance director at Signet, said: “Consumer confidence is perhaps becoming a bit more stable, but whether that can continue is where we have to be cautious.”
The group said it was “well prepared” for the Christmas selling season.
“We recognise consumers are looking for good value and we’ll very much cater for that,” said Mr Boyd.
Signet has 554 stores across the UK, while in the US it largely trades as Kay Jewellers and Jared the Galleria of Jewelry.
The US arm – by far the biggest in the group, contributing three quarters of total revenues – also narrowed sales declines, to 2.4% in the third quarter from 5.5% in the second quarter.
Signet’s third quarter result took sales in the nine months so far to £1.28bn at constant exchange rates.
David Jeary, Investec analyst, said third quarter sales figures were “encouraging”.
But added: “As ever, the full-year outturn is dependent on trading over the peak Christmas trading period, and in particular in the US division, where fourth quarter cumulative like-for-like declines over the past two years amounts to 25%.”
