Signet Jewelers CEO sees a 'rising tide' of engagements amid COVID
Signet Jewelers (SIG) CEO Gina Drosos says there's a "rising tide" of wedding engagements on the horizon.
Signet, the world's largest seller of diamond jewelry, conducted its bespoke consumer insights research that indicates that 15% of committed couples, or approximately 2.3 million couples, plan to get engaged in the current calendar year, an increase of high single digits compared to a typical year before the pandemic, according to Drosos.
"People are really spending more on people they are closest to now. I think in part it's because they've had to narrow their focus during COVID and they spent more time with their loved ones, and the good news is that that has deepened relationships," Drosos told Yahoo Finance in a telephone interview on Thursday.
Signet's research found that over 90% of couples say their relationship is the same or better since the pandemic began.
"So that's definitely, I think, a heartwarming statistic about love," Drosos added.
The CEO pointed out that October "is always a big month" for shopping for engagement rings ahead of the holiday season.
According to Drosos, the company's consumer insights and data analytics capability implemented three years ago is "really paying off because we're getting out in front of consumer trends faster."
"It's also the cornerstone of how we differentiated our banners, which allows us to cast our net wide or bring in more new customers and grow our market share," Drosos added.
Signet is the parent company of well-known brands such as Kay Jewelers, Zales, and Jared: The Galleria of Jewelry, to name a few.
As consumers plan to shop before they pop the question, Signet has already added more fancy shapes like pear and marquise diamonds and high-quality metals like 14-karat white and yellow gold to its offerings. Drosos noted that Jared recently added platinum because of the customer requests.
The company is also seeing more customers consider lab-created diamonds to get more "bling for the buck" and a bigger center stone than they might from a natural diamond, the CEO explained.
"That's not for everybody, but it's something that we make available to our customers so that they always have a broad choice," Drosos added.
Signet reported better-than-expected second-quarter earnings results on Thursday, sending its stock as high as $88.50.
For the second quarter, Signet reported adjusted earnings per share of $3.57, handily beating analysts' estimates of $1.69. Revenue also topped forecasts, coming in at $1.79 billion, up more than $900 million compared to a year ago.
The closely followed same-store sales grew 97.4% during the quarter. On a two-year comparison, the quarter represented same-store sales growth of 38.1%.
Signet's focus on differentiating its banners for a specific consumer segment is already paying off. According to Drosos, Zales' new customers in the first half of the year are up 400 basis points as the so-called "bold expressionist" makes more self purchases for style and fashion. At Kay, new customers, categorized as the "generous sentimentalist," are up 700 basis points. Drosos also pointed out that Jared's average transaction value (ATV) during the quarter was more than 80% higher than Kay's, a statistic that was a little over 30% higher two years ago.
"So you can see we're really now differentiating Jared and Kay based on moving Jared toward more accessible luxury. And all of this, I mean, it's driving our business now, but it's also critically important to our future because we want to be a $9 billion company, not a $6.5 billion company. So, you know, we've got to be able to cast our net wider and appeal to a broader group of customers," Drosos said.
Signet raised its fiscal 2022 guidance and now expects revenue in a range of $6.8 billion to $6.95 billion, up from the prior outlook of $6.5 billion to $6.65 billion.
Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.
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