Why Signet Jewelers Is Thursday's Big Earnings Winner

Signet Jewelers Ltd. (NYSE: SIG) released its fiscal second-quarter financial results before the markets opened on Thursday. The jeweler posted $0.52 in earnings per share (EPS) and $1.42 billion in revenue, while consensus estimates had called for $0.20 in EPS on revenue of $1.34 billion. In the same period of last year, the company said it had EPS of $1.33 and $1.4 billion in revenue.

During the most recent quarter, same-store sales increased 1.7% from the prior-year quarter.

In terms of its segments, the company reported as follows:

  • Kay net sales decreased 3.2% year over year to $546.0 million.
  • Zales net sales increased 3.5% to $278.5 million.
  • Jared net sales decreased 1.8% to $271.2 million.
  • Piercing Pagoda net sales increased 8.5% to $67.6 million.
  • James Allen net sales totaled $54.4 million.
  • Peoples net sales decreased 3.2% to $47.7 million.
  • Regional banners net sales decreased 48.4% to $21.3 million.

Separately, Signet announced that Chief Financial Officer Michele Santana will leave the company in 2019 after eight years of service to pursue other opportunities. Signet has initiated an external executive search and expects to appoint a new CFO by the end of the company’s fiscal year. Santana will continue as CFO until her successor is appointed and will remain with Signet in an advisory role until next year to ensure a smooth transition.

Looking ahead to the fiscal full year, the company expects to see EPS in the range of $4.05 to $4.40 and revenues between $6.2 billion and $6.3 billion. Consensus estimates call for $4.06 in EPS and $6.13 billion in revenue.

CEO Virginia C. Drosos commented:

During the second quarter, we continued to see stabilization in same store sales, and we remain confident that we have the right strategies in place to continue to drive operational improvement over the long-term. To reflect our improved second quarter performance, we are modestly raising our revenue and earnings guidance for the year. For the fourth quarter, however, where a vast majority of our annual operating profit is generated, we are remaining appropriately cautious in our outlook as many of our Path to Brilliance initiatives are being launched later in the year.

Shares of Signet were last seen up about 28% at $70.11, with a consensus analyst price target of $57.71 and a 52-week trading range of $33.11 to $77.94.