Christmas Trading Statement
10 Januar 2008 - 1:36PM
PR Newswire (US)
LONDON, Jan. 10 /PRNewswire-FirstCall/ -- Signet Group plc (LSE and
NYSE: SIG), the world's largest speciality retail jeweller, today
announced its sales performance for the 8 and 47 weeks to 29
December 2007. Like for like sales 8 weeks to 29 December 2007
Group down 6.8% US down 8.1% UK down 3.1% Like for like sales 47
weeks to 29 December 2007 Group down 0.2% US down 1.0% UK up 1.8%
Terry Burman, Group Chief Executive, commented: "In a very
challenging consumer environment on both sides of the Atlantic,
Group like for like sales were down 6.8% over the eight week
period. Profit before tax for 2007/08 is currently expected to be
between $330 million and $340 million. Against the background of
more difficult economic conditions, the Group's strong balance
sheet, superior operating metrics and sector leading execution are
vital medium and long term competitive advantages." "In the US, the
like for like sales performance over the Holiday season was clearly
disappointing. We remain focused on implementing our proven
strategy and on gaining profitable market share." "In the UK, while
like for like sales declined in the Christmas period they are ahead
for the year to date reflecting improved execution in a difficult
market. Further enhancements to the basic retail disciplines are
planned for 2008, including the initial roll out of the new Ernest
Jones store design." "The consistent growth in the holding of US
beneficial shareholders has meaningfully accelerated in recent
weeks and as a result Signet may soon become a domestic issuer for
SEC purposes. The Signet Board has kept under close review the most
appropriate domicile and stock market listing for its shareholders
as a whole. In light of the recent changes in the shareholder base
of the Company, the Board will further consider these matters,
including seeking the views of its shareholders. There is no
certainty as to the outcome of this assessment, even in the event
of Signet becoming a domestic issuer." Enquiries: Terry Burman,
Group Chief Executive +44 (0) 20 7317 9700 Walker Boyd, Group
Finance Director +44 (0) 20 7317 9700 Tom Buchanan, Brunswick +44
(0) 20 7404 5959 Wendel Verbeek, Brunswick +44 (0) 20 7404 5959
Signet operated 1,971 speciality retail jewellery stores at 29
December 2007; these included 1,402 stores in the US, where the
Group trades as "Kay Jewelers", "Jared The Galleria Of Jewelry" and
under a number of regional names. At the same date Signet also
operated 569 stores in the UK, where the Group trades as
"H.Samuel", "Ernest Jones" and "Leslie Davis". Further information
on Signet is available at http://www.signetgroupplc.com/. See also
http://www.kay.com/, http://www.jared.com/,
http://www.hsamuel.co.uk/ and http://www.ernestjones.co.uk/. GROUP
In the eight week period to 29 December 2007 like for like sales
were down by 6.8%. Total sales fell by 3.7% at constant exchange
rates (see note 1) and by 2.8% on a reported basis. In the 47 weeks
to 29 December 2007 like for like sales declined by 0.2%. Total
sales increased by 3.7% at constant exchange rates (see note 1) and
by 5.6% on a reported basis. Profit before tax for 2007/08 is
currently expected to be between $330 million and $340 million. The
Group's operating margin is expected to be between 9% and 10%, with
a Return on Capital Employed of about 18%. The Group's cash flow
for the full year, reflecting an investment in new space of
approximately $200 million, is expected to show an outflow of about
$150 million before any changes in equity share capital. The
balance sheet remains strong. UNITED STATES (circa 74% of Group
annual sales) In the eight week period to 29 December 2007, US like
for like sales declined by 8.1% and total sales fell by 3.6%. The
average selling price marginally increased in both Jared and the
mall brand stores. Pricing discipline was generally maintained,
although in response to competition, additional promotional
activity within the Journey product category had some adverse
impact on gross margin. Overall the decline in gross margin,
including the impact of commodity cost increases, is likely to be
in line with expectations. In the 47 weeks to 29 December 2007,
like for like sales decreased by 1.0%, with total sales up by 4.8%.
Net new store space is expected to have increased by 10% during
2007/08. Bad debts as a percentage of credit sales for the year is
anticipated to be at the high end of the range of the last 10
years, reflecting the weak sales in the fourth quarter rather than
a material deterioration in the performance of the credit
portfolio. Although the divisional operating profit for 2007/08 is
expected to be below that of last year, the operating margin is
anticipated to be close to 10%, well above the typical level of the
US jewellery sector. UNITED KINGDOM (circa 26% of Group annual
sales) In the eight week period to 29 December 2007, UK like for
like sales declined by 3.1%, with total sales down by 3.8% at
constant exchange rates (see note 1) and by 0.3% on a reported
basis. The average selling price was up in both H.Samuel and Ernest
Jones. Watches continued to outperform but the diamond category
performance in Ernest Jones was disappointing. In a retail
marketplace that was highly promotional, pricing discipline was
maintained and the gross margin is anticipated to be in line with
last year's level. In the 47 weeks to 29 December 2007, like for
like sales rose by 1.8%. Total sales at constant exchange rates
increased by 0.7% (see note 1) and by 7.7% on a reported basis.
Divisional operating profit is forecast to be broadly in line with
last year's level on a 52 week basis; and the business continues to
achieve a healthy operating margin, a good return on capital and
strong cash flow. The breakdown of UK like for like sales
performance is shown below: Ernest Jones H.Samuel UK Period (c. 12%
of Group) (c. 14% of Group) (c. 26% of Group) 8 weeks to 29
December 2007 -4.4 % -2.0 % -3.1 % 47 weeks to 29 December 2007
+2.6 % +1.2 % +1.8 % Foreign Private Issuer Status The consistent
growth in the holdings of US beneficial shareholders has
meaningfully accelerated in recent weeks. As a consequence the
proportion of voting securities held by US residents in
mid-December was just below 50% compared to approximately 38% in
October 2007. If this percentage were to rise to above 50%, as
monitored on a quarterly basis, Signet would no longer satisfy the
definition of a "foreign private issuer" under the rules and
regulations of the US Securities and Exchange Commission (SEC) and
would become a domestic issuer for SEC purposes. In the event of
becoming a domestic issuer, Signet would work diligently to meet
additional US reporting and accounting obligations. Signet also
would continue to file financial statements in the UK under
International Financial Reporting Standards and to meet the
obligations of a public listed company on the London Stock
Exchange. The Signet Board has kept under close review the most
appropriate domicile and stock market listing for its shareholders
as a whole. In light of the recent changes in the shareholder base
of the Company, the Board will further consider these matters,
including seeking the views of its shareholders. There is no
certainty as to the outcome of this assessment, even in the event
of Signet becoming a domestic issuer. INVESTOR RELATIONS PROGRAMME
DETAILS There will be a conference call for all interested parties
today at 2.00 p.m. GMT (9.00 a.m. EST and 6.00 a.m. Pacific Time)
and a simultaneous audio webcast at http://www.signetgroupplc.com/.
To help ensure the conference call begins in a timely manner, could
all participants please dial in 5 to 10 minutes prior to the
scheduled start time. The call details are: European dial-in: +44
(0) 20 7138 0818 European 48hr. replay: +44 (0) 20 7806 1970 Pass
code: 4880615# US dial-in: +1 718 354 1171 US 48hr. replay: +1 718
354 1112 Pass code: 4880615# Fourth Quarter Sales Fourth quarter
sales figures are expected to be announced on 7 February 2008. Note
1 - Impact of constant exchange rates The Group has historically
used constant exchange rates to compare period- to-period changes
in certain financial data. This is referred to as 'at constant
exchange rates' throughout this release. The Group considers this
to be a useful measure for analyzing and explaining changes and
trends in the Group's results. The impact of the re-calculation of
sales growth at constant exchange rates is shown below: 8 weeks to
29 December Growth at Impact of Growth at 2007 actual exchange
constant exchange rate exchange rates movement rates (non- GAAP) %
% % Sales by origin and destination UK, Channel Islands &
Republic of Ireland (0.3) (3.5) (3.8) US (3.6) - (3.6) (2.8) (0.9)
(3.7) 47 weeks to 29 December Growth at Impact of Growth at 2007
actual exchange constant exchange rate exchange rates movement
rates (non- GAAP) % % % Sales by origin and destination UK, Channel
Islands & Republic of Ireland 7.7 (7.0) 0.7 US 4.8 - 4.8 5.6
(1.9) 3.7 This release includes statements which are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements, based
upon management's beliefs as well as on assumptions made by and
data currently available to management, appear in a number of
places throughout this release and include statements regarding,
among other things, our results of operation, financial condition,
liquidity, prospects, growth, strategies and the industry in which
the Group operates. Our use of the words "expects," "intends,"
"anticipates," "estimates," "may," "forecast," "objective," "plan"
or "target," and other similar expressions are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance and are subject to a number of
risks and uncertainties, including but not limited to general
economic conditions, the merchandising, pricing and inventory
policies followed by the Group, the reputation of the Group, the
level of competition in the jewellery sector, the price and
availability of diamonds, gold and other precious metals,
seasonality of the Group's business and financial market risk. For
a discussion of these and other risks and uncertainties which could
cause actual results to differ materially, see the "Risk and Other
Factors" section of the Company's 2006/07 Annual Report on Form
20-F filed with the U.S. Securities and Exchange Commission on May
4, 2007 and other filings made by the Company with the Commission.
Actual results may differ materially from those anticipated in such
forward-looking statements even if experience or future changes
make it clear that any projected results expressed or implied
therein may not be realised. The Company undertakes no obligation
to update or revise any forward-looking statements to reflect
subsequent events or circumstances. DATASOURCE: Signet Group plc
CONTACT: Terry Burman, Group Chief Executive, +44-20-7317-9700, or
Walker Boyd, Group Finance Director, +44-20-7317-9700, both of
Signet Group, or Tom Buchanan, +44-20-7404-5959, or Wendel Verbeek,
+44-20-7404-5959, both of Brunswick, for Signet Group Web site:
http://www.signetgroupplc.com/
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