Signet Jewelers Ltd (NYSE:SIG) Q1 2019 Earnings Conference Call - Final Transcript
Jun 06, 2018 • 08:30 am ET
[Operator Instructions] And your first question comes from the line of Brian Tunick with RBC. Your line is open.
Great, thanks. Good morning. And nice to see some stabilization there. I was curious about the Kay business. Maybe you could give us some underlying metrics maybe you could look at from an internal perspective. I guess, when we look externally at the shift in the promotion from Q4 and the credit outsourcing, obviously, a lot of noise there. Can you maybe give us sort of what you think are the key drivers, whether it was transactions or average ticket on the Kay business? And then maybe the second question, just how you're looking at the overall jewelry industry trends or any category growth you can comment on for Q1. Thank you very much.
Hi, Brian. Thanks for your questions. So I will start with the macro overview on Kay, turn it over to Michele for some details on the specific to US and then I will turn back on the jewelry industry question. I think in a macro sense what we have seen on Kay in the quarter is a couple of things. One is improved operational excellence on our credit transition issues. We worked very hard to get a number of important initiatives in place in stores, including retraining of our entire store staff around our different credit offerings and some important IT interventions and that's really helped us see some stabilization in that. The second is focus on innovation and bringing newness and merchandise to some of our core sub-brands. We saw some really nice growth in bridal behind Neil Lane as an example. We have brought in significantly newer better merchandise we feel in bridal and in fashion in both of those groups for Kay in the quarter. So in a macro sense what we are seeing on Kay I think is the very beginning of path to brilliance initiatives starting to come to life.
And also to add one additional comment to that, Brian, I know you mentioned the promotional shift that we talked about on the call. When you look at Kay's comp for the quarter at down 1.9% and factoring that promotional that we attributed 430 basis points too, it still showed strong sequential improvement over our Q4 period and the stabilization that Gina had talked to on the call was evident driven by the initiatives. I think on your question regarding macro jewelry trends, we see the category as healthy. Gina's data is hard to come by in this category, but it appears that we are still continuing to see growth in that 3% to 5% range that we have seen over the last number of years. So that's great. The biggest opportunity in my point of view is for a company like Signet to begin over our path to brilliance transformation to lead category growth as we access more events.
I gave the keynote address at J.C. Kay, which is our big industry