May 23--Signet Jewelers Ltd., the parent of Sterling Jewelers of Akron, reported higher quarterly profits Thursday on strong sales.
Signet [NYSE: SIG], which said earlier this year it plans to buy rival Zale Corp. of Texas, posted first-quarter profits totaling $96.6 million, or $1.20 a share, up from $91.8 million, or $1.13 a share a year earlier.
Signet, whose Sterling Jewelers in Akron operates the Kay Jewelers and Jared the Galleria of Jewelry chains, is seeking to acquire Zale for $21 a share.
The hedge fund TIG Advisors _ a large Zale investor _ has criticized the purchase and wants Zale shareholders to vote against it.
Zale shareholders will vote on the proposed acquisition Thursday.
Signet said in a statement Thursday, "We believe our offer provides compelling and immediate value to Zale stockholders while eliminating business execution risk."
Meanwhile, proxy advisory services company Institutional Shareholder Services (ISS) Inc. recommended Thursday that Zale shareholders approve the purchase, saying there would be "significant downside risk if the deal breaks and the current [Zale] management and board continuing to execute on a strategic plan with significant challenges ahead of it."
Zale stock has traded above the $21-a-share purchase price recently, with stock buyers hoping for a higher offer. On Thursday, Zale shares closed down 86 cents to $21.83.
Signet shares closed up $5.01 to $104.65. Signet shares are up 47 percent from a year ago and up 33 percent in 2014.
Zale shares are up 230 percent from a year ago and up 33 percent in 2014.
Signet's Sterling division is headquartered on Ghent Road in Akron. Signet, which has its financial base in Bermuda, is the largest operator of jewelry stores in the country and the United Kingdom.
The U.S. stores, which include regional stores, generate the vast majority of sales for Signet. The company has more than 2,600 employees in Summit County.
Signet said total sales for the third quarter rose 6.3 percent to $1.056 billion, up $62.5 million from sales for the 13 weeks ended May 4, 2013. Same-store sales _ or sales at stores open at least a year _ increased 3.3 percent.
Signet said its second-quarter adjusted earnings per share are expected to be 95 cents to $1.01, an increase of 13.1 percent to 20.2 percent. Signet said its per-share earnings on an adjusted basis _ excluding various items _ were higher than the company's forecast. Adjusted per-share earnings were $1.29 a share, up from $1.13 a share. The company had anticipated adjusted per-share earnings of $1.24 to $1.28.
Katie Byard can be reached at 330-996-3781 or email@example.com.
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