Shares of Signet Jewelers (SIG) are in focus on Tuesday morning after the company said in a regulatory filing that its chief operations officer had resigned due to violations of company policy. Signet, the owner of Zale and Kay Jewelers, last month reported quarterly earnings below expectations and announced plans to outsource its credit portfolio.

COO RESIGNATION: Signet Jewelers said yesterday in a regulatory filing that COO Bryan Morgan resigned on June 2 due to violations of company policy "unrelated to financial matters." The filing did not contain further details about the circumstances of Morgan's resignation. In January, Signet announced several senior organizational changes to drive growth, including promoting Morgan to COO from executive vice president, Supply Chain Management and Repair.

WHAT'S NOTABLE: Last month, Signet reported first quarter earnings that fell below analysts' expectations. CEO Mark Light said the company had a "very slow start" to the year as headwinds in the overall retail environment were exacerbated by a slowdown in jewelry spending and company-specific challenges. Light said same-store sales improved sequentially when normalized for Mother's Day and backed fiscal 2018 EPS guidance of $7.00-$7.40 and comp sales down low-to-mid single digits. In conjunction with its earnings report, Signet said it would sell $1B of prime only credit quality accounts receivable to Alliance Data (ADS) and form a seven-year partnership with Progressive Leasing, a subsidiary of Aaron's, Inc. (AAN). As part of the second phase of the strategic outsourcing of the in-house credit program, Signet said it plans to fully outsource its secondary credit programs, including the sale of the remaining receivables on its balance sheet, as well as funding for new non-prime account originations. Light said the moves are expected to unlock "significant value." Signet shares are down about 44% year-to-date as the jeweler deals with declining sales. The company has said it would step up efforts to restore its reputation following allegations of sexual harassment at its Sterling Jewelers unit and diamond swapping allegations. Signet last month said it reached an agreement with the EEOC to resolve claims related to pay and promotion of female retail sales workers. Signet has said allegations of sexual harassment have no merit, calling them "distorted and inaccurate."

PRICE ACTION: Signet Jewelers is down about 1% in pre-market trading.