ICE SALES NOT HOT

Struggling jeweler gets infu$ion from buyout firm

On second thought, maybe spending like a bunch of drunken sailors on stock repurchases wasn’t such a good idea.

Signet Jewelers, its sales, margins and profits slipping in the second quarter, finished off spending $375 million on stock repurchases in the period.

The company even dipped into its revolving credit facility to complete the repurchase of 4 percent of their outstanding shares.

The average purchase price was $95.49, the company said Thursday in a regulatory filing.

Chief Executive Mark Light said the purchases demonstrated the board’s “confidence in our company.”

Well, after announcing on Thursday that same-store sales fell 2.3 percent and that total sales and adjusted profit missed Wall Street expectations, investors pummeled the stock, sending it down 12.6 percent, to $83.44 — nearly 13 percent below that average buyback price.

As trading begins on Friday, investors — nursing a deflated portfolio, in part, because the CEO lowered the company’s full-year profit forecast — may be wondering if Light’s buybacks were such a bright idea.

Signet, the parent of Kay, Zales and Jared jewelry chains, plus Piercing Pagoda, blew through 26 percent of its cash on hand — and dipped into its credit facility to buy — as it turns out — overvalued shares.

Adjusted earnings this quarter were $1.14 a share on $1.37 billion in sales, falling short of analysts estimates of $1.45 a share on sales of $1.43 billion.

The company attributed its lackluster performance to a host of events, including Br- exit, the contentious US presidential election and a weak economy in Texas’ oil patch.

The company has many stores in the UK and in Texas.

In an effort to boost its falling stock price, Signet also announced Thursday that private equity firm Leonard Green & Partners will buy $625 million of convertible preferred shares.

The proceeds of the investment will be used — you guessed it — to repurchase more Signet stock, which is down 33 percent this year.

The shares are down 32 percent over the past year from their 52-week high of $152.27.

Meanwhile, Fitch downgraded Signet’s credit rating further into junk territory, to BB+ from BBB-.

As part of the deal, Jonathan Sokoloff of Leonard Green will gain a seat on Signet’s board.

The jeweler is currently looking for ways to optimize or sell its credit portfolio, which has come under fire by short sellers who question the creditworthiness of Signet customers.

Also not helping, Signet suffered reputational damage earlier this summer after Kay’s customers alleged that their diamonds were swapped for lesser-quality or man-made stones during routine cleanings.

Management denied the allegations, but said on Thursday that it is testing new technology to better identify and track stones.