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Signet Jewelers
beat earnings expectations in the fourth quarter and issued solid guidance for the year ahead in the face of a challenging period for the industry.
The stock climbed more than 2% in premarket trading as its guidance suggested it can outperform the wider U.S. jewelry sector. Its outlook for full-year sales to be flat, or slightly down, looks robust given the jeweler expects a continued shift in consumer discretionary spending away from jewelry amid pent-up demand for experiences and further impacts of inflation.
Signet (ticker:SIG), owner of the Zales and Jared jewelry chains, beat earnings and revenue expectations in the fourth quarter despite several headwinds on both sides of the Atlantic.
The company reported sales of $2.66 billion in the three months ended Jan. 28, a 5% drop from the year-ago period but narrowly beating analysts’ estimates of $2.65 billion. Same-store sales fell 9.1%.
The company said its quarterly sales were hit by bad weather in the U.S. in the peak holiday selling period, as well as labor strikes and a weaker British pound in the U.K. Adjusted earnings per share of $5.52 beat the
FactSet
consensus of $5.43.
Signet’s outlook for the fiscal 2024 first quarter and full year came in slightly below expectations but appears to have buoyed investors. Signet expects revenue in the U.S. jewelry industry to fall by a mid-single digit percentage in the full year but said it can gain market share against that performance.
“Our fiscal 2024 guidance reflects confidence in our ability to deliver an annual double-digit non-GAAP operating margin despite a jewelry retail environment that we estimate will decline mid-single digits through the year,” Chief Financial Officer Joan Hilson said.
The retailer sees revenue of $1.62 billion to $1.65 billion in the first quarter, against the consensus of $1.8 billion, while full-year guidance for $7.67 billion and $7.84 billion fell below analysts’ forecasts of $7.89 billion. Signet guided for full-year adjusted earnings per share of $11.07 to $11.59, the midpoint of which is below estimates of $11.42.
Write to Callum Keown at callum.keown@barrons.com
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