Signet Jewelers Ltd (NYSE:SIG) Q1 2019 Earnings Conference Call - Preliminary Transcript
Jun 06, 2018 • 08:30 am ET
results at Kay also improved sequentially reflecting some benefit from planned promotions as well as meaningful improvement in credit execution in our stores. We injected significant newness and focused on key brand propositions in the quarter leading to North America same-store sales up 0.6%, which included the positive impact of James Allen sales growth.
At the category level, in North America, fashion, bridal and watch sales each increased, while beads declined as we strategically reduced our participation in our own brands, including terms memories and persona. Bridal and fashion each had a higher percentage of new products in the quarter, which helped drive sales growth. Bridal performance also benefited from strengthened solitaires, Enchanted Disney, Neil Lane and Vera Wang love collections, partially offset by declines in EverUs. Fashion had strong performance in gold jewelry items and fashion rings. In the international division, which comprises our UK operations, overall macro conditions were unfavorable with continued declines in non-food consumer spending.
In our business, we saw lower sales of diamond jewelry and fashion watches somewhat offset by higher sales in prestige watches. As I mentioned, we continue to improve our e-commerce capabilities with strong sales in the quarter, up 81% on a reported basis. We saw growth in e-commerce across all banners in the quarter led by James Allen, which grew 29%. As you know, as part of our efforts to focus on our core business, reduce risk and lower our working capital needs, we began to transition to an outsourced credit model late in the third quarter of fiscal 2018. Upon conversion, we experienced some transition-related issues that impacted same-store sales.
We have implemented a comprehensive action plan to return to operational excellence and offering credit to our customers and we are seeing signs of stabilization versus the pre-outsourcing trend in the application volumes. We estimate that the negative impact of the credit transition issues on our total same-store sales was approximately 100 basis points in the first quarter, which is a significant improvement versus the approximately 300 basis point impact in the fourth quarter of fiscal 2018. While we believe that the issues related to the outsourcing are mostly behind us, we expect there maybe some remaining sales impact related to the transition in our second and third quarter sales results.
Going forward, our credit volumes and participation rates will continue to be subject to overall consumer health and mall traffic trends. We remain focused on providing category leading payment options for our customers and working to improve application volumes and participation rates. Now, I would like to discuss how our Signet path to brilliance transformation plan is coming to life strategically to reposition our business. In order to measure our progress and hold ourselves accountable as we move through this plan, we are working towards establishing baselines over the remainder of fiscal 2019, so that we can provide you with additional metrics to evaluate our progress going forward.
So, beginning with customer first. We are in the late stages