Pondering Signet Jewelers As A Short
Since I missed
Zale's (ZLC) journey to sub $1-ish (
Jan 23: Where You Won't Shop in 2009), I am pondering
Signet Jewelers (SIG) as a proxy. Very weird action today - it is up 14% based on a cost cutting report that happened yesterday - but the
report happened in the morning. So the stock did not react yesterday but reacted today. (I assume short covering today)
- Signet Jewelers (SIG.L), the Anglo-American jewellery retailer, reported on Thursday a sharp fall in fourth-quarter underlying sales and said it would outline plans to cut costs and generate more cash in March.
- The 1,959-store group, which owns Kay and Jared in the United States and Ernest Jones and H Samuel in the United Kingdom, said sales at stores open more than one year fell 14.9 percent in the 13 weeks to Jan. 31, reflecting subdued sales of gold, diamonds and wristwatches. Same-store sales fell 16.1 percent in the United States and were down 9.2 percent in the UK. Total fourth-quarter sales fell 18.9 percent to $1.124 billion.
- "On both sides of the Atlantic, we are reducing costs and focusing on cash generation," he said, adding that Signet would give more details on these areas when it published its full-year results on March 25.
- Signet forecast last month that pretax profit for the year to the end of January 2009 would be $180 million to $195 million. It said it would not be paying a dividend as it focused on reducing its debt, which was expected to be between $470 million and $490 million at the year end.
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