12:49 PM EDT, 03/20/2024 (MT Newswires) -- Signet Jewelers' ( SIG ) fiscal fourth-quarter sales declined versus last year and missed market estimates, and the company issued a downbeat revenue outlook on Wednesday.

The owner of store chains including Kay Jewelers anticipates sales of $1.47 billion and $1.53 billion for the ongoing three-month period, while the Capital IQ consensus estimate is nearly $1.6 billion. Same-store sales are forecast to decline by 7% to 11%, while the Street is looking for a decrease of 3.4%.

The company saw a "soft start" to the quarter with trends "notably improving" since the middle of February. It expects US engagement incidents to be down low- to mid-single-digits on an annual basis. The stock tumbled 11% in midday trading.

For fiscal 2025, revenue is pegged at $6.66 billion to $7.02 billion with same-store sales ranging from a 4.5% drop to a 0.5% increase. Analysts currently estimate revenue of $7.12 billion for the year and same-store sales growth of 0.5%. The retailer projects a roughly 1.5% to 2% hit to sales due to integration issues with its digital banners, which it plans to resolve in the second half.

Signet expects earnings of $9.08 to $10.48 per share for the fiscal year, compared with the market view of $10.46. The company is targeting about $150 million to $180 million in new cost savings initiatives and continues to anticipate a three-year recovery in US engagement rates. "As we look to fiscal 2025, we are expecting sequential same store sales improvement over the year as engagements gradually recover," Chief Executive Virginia Drosos said in a statement.

For the quarter ended Feb. 3, sales fell 6.6% to $2.5 billion, missing the Street's view of $2.55 billion. Adjusted EPS advanced to $6.73 from $5.52, topping the Capital IQ-polled consensus of $6.39. Same-store sales fell 9.6%, worse than the 7.7% decrease modeled by analysts.

Revenue in North America moved 6.1% lower to $2.35 billion, with comparable sales down 10% due to a 1% headwind from digital banner integration issues. International sales slid 7.5% to $141.7 million, reflecting a 10% decline in average transaction value related to the previously announced sale of prestige watch locations, on a lower number of transactions, the company said.

"We drove gross margin expansion of 160 basis points and sustained average transaction value this quarter by executing on our strategy of building brand equity, customer experience innovation, and accelerated sell through on product newness as offsets to heavy discounting by competitors," Drosos said.

In a separate statement, Signet said H. Todd Stitzer will step down from his role as board chair. He will complete his term in June, immediately after the retailer's annual general meeting. Helen McCluskey, a member of the company's board, will succeed Stitzer as non-executive chair.

Price: 91.19, Change: -11.28, Percent Change: -11.00