Mar 25, 2009
Signet posts loss on writedown
Mar 25, 2009
NEW YORK (Reuters) - Signet Jewelers (SIG.N), the world's biggest specialty jeweler, reported a quarterly net loss on Wednesday March 25 versus a year-earlier profit, hurt by a one-time charge and a steep drop in sales during the key holiday shopping period.
The company, which runs Kay Jewelers and Jared The Galleria of Jewellery stores in the United States and Ernest Jones and H Samuel in Britain, also plans to cut costs to cope with the tough shopping environment.
Signet reported a loss of $424 million (289 million pounds), or $4.97 per share, for the fourth quarter ended January 31, compared with a profit of $143 million, or $1.65 per share, a year earlier.
Results for the latest quarter included a $516.9 million goodwill impairment charge.
Sales fell nearly 19 percent to $1.12 billion.
With its prospects for U.S. same-store sales "very uncertain", the retailer plans to cut U.S. costs by $100 million in its current fiscal year.
It also intends to further slow the rate of new store openings in the United States, and said the number of store closures this year will be a little higher than last year.
U.S. same-store sales for the first seven weeks of the new financial year were down 2.7 percent, although gross profit margins were "meaningfully up." U.K. same-store sales over the same period were down 3.8 percent, with margins up slightly, Signet said.
Signet's results came just days after high-end jeweler Tiffany & Co (TIF.N) posted a sharp drop in quarterly profit as consumers cut back on discretionary purchases.
For the full year, Signet said its loss was $393.7 million, including the goodwill impairment charge, versus a profit of $219.8 million the year before.
The group said the goodwill charge was linked to moving its primary listing to the United States and to the adoption of U.S. Generally Accepted Accounting Principles (GAAP).
Excluding the goodwill impairment, relisting costs and taxes, it said its the full-year profit was $200.9 million.
(Reporting by Nicole Maestri in New York and Mark Potter in London, Editing by James Davey)
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