=Signet Jewelers (SIG) reported earnings on Tue 11/22/16 (b/o)

Signet Jewelers beats by $0.10, reports revs in-line; guides Q4 EPS above consensus; Credit review process 'proceeding according to plan' :

• Reports Q3 (Oct) earnings of $0.30 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus of $0.20; revenues fell 2.5% year/year to $1.19 bln vs the $1.18 bln Capital IQ Consensus. Total sales on a constant currency basis declined 0.5%.
  • SSS decreased 2.0% vs. down 3-5% guidance, compared to an increase of 3.3% in the third quarter Fiscal 2016. The sales declines were due to under performance in select stores (e.g. regionals, Jared); energy dependent regions which reduced SSS about 80 basis points; and declines in select collections such as Charmed Memories and watches. This was partially offset by better performance in fashion jewelry and select bridal. Ecommerce sales in the third quarter Fiscal 2017 were $51.6 million, or 4.4% of sales, up $1.1 million, or 2.2%, compared to $50.5 million in the third quarter Fiscal 2016.
• Co issues upside guidance for Q4, sees EPS of $4.00-4.20, excluding non-recurring items, vs. $3.95 Capital IQ Consensus.  
• Credit Strategy Update:
  • Signet's credit review process is progressing well. As previously disclosed, the Company is reviewing a range of options from optimizing the current in-house credit business to seeking a partnership that would enable Signet to gain greater financial flexibility. Signet has identified opportunities to enhance its credit business and is pleased with the interest expressed by potential partners. Regardless of the credit review outcome, Signet believes shareholder value will be created.
• "We expected challenging market conditions to result in a sales decline. However, our continuing ability to execute in a difficult environment led to results that were somewhat better than our expectations. "Signet achieved some important wins during the quarter. Fashion diamond and gold jewelry performed well as did select branded bridal. We saw success in a variety of selling channels including kiosks, outlets, and on-line. In addition, our teams delivered solid expense and inventory management leading to strong free cash generation. The Zale integration is running well and synergies remain on target. "While near term headwinds may persist, we are confident that we made the right investments into initiatives designed to drive growth and deliver on our fourth quarter expectations."