Signet, the jeweller behind the Ernest Jones and H Samuel chains in the UK, reported a rise in first quarter sales, but said profits had been held back by an increase in marketing costs.

The retailer said like-for-like sales were up 3.1 per cent in the 13 weeks to May 5, helped by a 3.2 per cent sales increase in the US, which accounts for 75 per cent of revenues.

Signet said trading in the UK, which recorded a 2.6 per cent increase in like-for-like sales in the period, had shown further improvements in the second quarter.

Shares in the company slipped over 2 per cent in morning trading to 107.5p, on news of a 5.5 per cent decline in first quarter profits to $50.8 million, due to an increase in US marketing costs.

Operating profits fell to $54 million from $56.3 million last time, on a 10.9 per cent increase in turnover to $814.4 million.

“In the first quarter the US trading environment weakened and the UK marketplace was a little stronger,” said Terry Burman, chief executive.

He added that sales growth in the US was weak over the Mother’s Day period at the start of the second quarter, but had since returned to the levels seen in the first quarter.

Signet is planning to invest $1 billion into its US operations by 2011, in a bid to double its store count there. Last month, the retailer said sales growth had showed signs of cooling in the first quarter, on a drop in footfall at shopping malls.

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