US jeweller Signet has said it expects profits to be within market forecasts despite revealing that like-for-like sales slumped over the Christmas period.

In the nine weeks to January 3, same-store sales fell 15.2 per cent, representing a 16.4 per cent decline in the US and a 10.9 per cent drop in the UK. In the UK, which represents about 25 per cent of annual sales and comprises the H Samuel, Ernest Jones and Leslie Davis brands, total sales fell 33.4 per cent on a reported basis and 9.7 per cent at constant exchange rates. Gross merchandise margin is forecast to be about 110 basis points below last year.

During the period same-store sales fell 13.2 per cent at Ernest Jones, dropped 9.2 per cent at HSamuel and slumped 10.9 per cent at the rest of the group.

Over the 48 weeks to the same date group same-store sales dropped 8.1 per cent, or 9.5 per cent in the US and 3.5 per cent in the UK.

Signet group chief executive Terry Burman said that full-year profits are expected to come in within the range of market forecasts “despite an extremely challenging environment on both sides of the Atlantic”.

He added that gross merchandise margin was “substantially ahead of last year” and costs were “very tightly controlled”.

Income before income tax for the 2008/2009 year is forecast to be between US$180 million and US$195 million£118.3 million and£128.2 million) after costs of US$10.5 million (£6.9 million) relating to the change in domicile of the company.

Burman added: “The prime focus of management will be on reducing debt by maximising gross merchandise margin dollars, achieving meaningful expense reductions, executing inventory efficiencies and reducing capital expenditure."

Investec analyst Katharine Wynne said the results were worse than expected. However, she said: “We think the company remains well and tightly managed, and over the longer term should be able to benefit from the inevitable capacity withdrawal in the broader jewellery sector.”

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