Signs of optimism at Signet Jewelers drive shares higher

Key conclusions

Jewelry company Signet Jewelers topped profit forecasts and provided an upbeat assessment of sales at its stores.
The jewelry chain’s same-store sales fell, but less than expected, and Chief Executive Virginia Drosos said results were positive in the current quarter.
Stocks that rose on Thursday will continue to fall in 2024.

Shares of Signet Jewelers (SIG) rose on Thursday as the jewelry retailer beat earnings estimates and gave an upbeat assessment of store sales.

The operator of Zales, Jared and Kay Jewelers reported diluted earnings per share (EPS) of $1.25 in the second quarter of fiscal 2025, $0.09 above the average estimate of analysts surveyed by Visible Alpha. Revenue fell 7.6% to $1.49 billion, falling short of forecasts.

Same-store sales fell 3.4%, better than Wall Street expected. Same-store sales “have been positive so far in the third quarter,” said CEO Virginia Drosos. The company expects them to end in a range of 1.0% decline to 1.5% growth. Wall Street was expecting a 1.2% decline, according to Visible Alpha data.

In the second quarter, North American sales fell 6.9% to $1.4 billion due to lower transaction volume. International sales fell 15% to $86.5 million, also due to lower transaction volume, as well as the previously announced sale of prestige watch locations.

Signet forecasts current quarter sales of $1.345 billion to $1.380 billion, while Visible Alpha estimates them at $1.35 billion.

Despite today’s gains, when shares were up about 12%, Signet Jewelers stock is expected to remain lower in 2024.

Commercial View