Shares of Signet Jewelers (NYSE: SIG) fell 12% on Thursday after the diamond retailer warned investors that inflation was driving some consumers to pare back their spending on jewelry. 

The owner of brands like Zales, Jared, and Kay Jewelers saw its sales decrease by 1.9% year over year to $1.8 billion in its fiscal 2023 second quarter, which ended on July 30. Signet's same-store sales sank 8.2%. This decline was only partially offset by Signet's acquisition of jewelry chain Diamonds Direct in November. 

During an interview with Bloomberg, CEO Gina Drosos said higher energy and housing costs drove lower-income shoppers to spend less on jewelry. In turn, Signet's sales of items priced under $500 fell sharply compared to the earlier stages of the pandemic, when stimulus checks helped to bolster consumer spending.

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Source Fool.com