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(Sharecast News) - Shares in American jewellery retail giant Signet Jewelers were sliding on Tuesday, after the company revised its fourth-quarter guidance downward on the back of weaker-than-expected holiday sales.
The Bermuda-domiciled, Ohio-based company - the world's largest diamond jewellery retailer, which counts chains including Kay Jewelers and H Samuel among its divisions - now forecast total sales of $2.32bn to $2.34bn for the quarter, compared to its earlier projection of $2.38bn to $2.46bn.
Same-store sales were expected to decline by 2% to 2.5%, a significant downgrade from the previous forecast of flat to 3% growth.
Over the 10 weeks ended 11 January, same-store sales fell by about 2%.
The company also cut its adjusted operating income outlook to between $337m and $347m, down from $397m to $427m.
Signet said its underperformance was driven primarily by weaker results in fashion gifting, where consumers gravitated to lower price points more than expected.
Chief financial and operating officer Joan Hilson put the shortfall down to gaps in the company's merchandise assortment, which hindered its ability to meet demand in key price ranges.
"Merchandise margin expanded, but less than expected due to the lower fashion mix and a stronger customer response to promotional items," Hilson explained.
"These dynamics are reflected in our updated guidance."
Despite the challenges, the company reported strength in engagement and service sales, alongside a 5% increase in average unit retail (AUR) across both the bridal and fashion categories.
However, that was insufficient to offset the broader trend of cautious consumer spending.
Chief executive officer JK Symancyk expressed optimism about Signet's long-term potential, emphasising plans to refine customer-facing strategies in marketing, product design, and assortment innovation.
"I see meaningful potential to unlock shareholder value through the strength of both our brand portfolio and financial foundation," Symancyk said.
"We can build on our industry leading position in bridal while dramatically accelerating our reach into the larger fashion categories of self-purchase and gifting to drive sustainable organic growth."
At 0858 EST (1358 GMT), shares in Signet Jewelers were down 15.6% in premarket trading in New York, at $64.49.
Reporting by Josh White for Sharecast.com.