US jewellery giant Signet’s UK division saw second quarter net operating income plummet 40% to $2.8m (£1.7m) in a “challenging market”.
The UK underperformed compared to the rest of the group, where net operating income surged 69% to $102.3m (£62.5m).
However, UK like-for-likes climbed 1.4% in its second quarter to July 30, while total sales came in at $154.6m (£94.5m), a rise of 8.8%, or flat at constant exchange rates.
At the retailer’s H Samuel arm, second quarter total sales rose 10.8% or 1.9% at constant exchange rates to $81.4m (£50m), while like-for-likes increased 3.3%.
Ernest Jones like-for-likes fell 0.7%. Total sales jumped 6.7% to $73.2m (£45m). However, at constant exchange rates, this represents a fall of 1.8%.
The UK division’s gross merchandise margin declined by 40 basis points as rising costs hit the retailer, including an increase in the cost of commodities, and a rise in Vat.
Operating margin in the UK division declined by 150 basis points to 1.8%.
Across the group, same store sales surged 9.9%, with total sales up 10.8% to $797.6m (£484.7m).
Signet chief executive Mike Barnes said the retailer had achieved “record results” across the group.
He said: “During the quarter, our branded jewelry initiatives drove strong US same store sales performance and assisted our UK division’s sales to outperform a challenging retail marketplace.”