Signet Jewelers sparkles after beating 4Q expectations amid turnaround plan

Shares of Signet Jewelers Ltd (NYSE:SIG) sparkled Wednesday after posting fiscal fourth-quarter results that beat on revenue and earnings but fell year over year.

The owner of stores including Kay, Zales and Jared brought in earnings of $3.96 per share, beating Street projections of US$3.81 but down from US$4.28 a year ago. Revenue came in at US$2.15 billion, ahead of analysts’ expectations of US$2.14 billion yet not living up to the US$2.29 billion the jeweler earned the previous year. Same-store sales fell 2%.

Investors are glad to have clarity, boosting the share price nearly 1% to $27.90.

Including one-time charges, the Bermuda-based company suffered a $116.2 million loss, worth $2.25 per share.

Looking forward

The company is in the midst of a three-year plan called “Path to Brilliance” that it began in March 2018. CEO Virginia Drosos noted that the company made progress, including achieving double-digit e-commerce growth, but that the holiday season fell short.  

“We did not finish the year as strongly as expected due to a highly competitive promotional environment, continued consumer weakness in the UK, and lower than expected customer demand for legacy merchandise collections that impacted our holiday fourth quarter results,” Drosos said.

Next quarter, the jeweler expects a loss between $0.17 and $0.28 per share, while analysts expect an average loss of $0.14 per share. Revenue is expected to be between $1.42 billion and $1.44 billion, right in line with expectations from the Street of $1.43 billion. Sales stores sales are expected to drop between 0.5% and 1.5%.

For fiscal 2020, earnings between $2.87 and $3.45 EPS are expected on revenue between $6 billion to $6.1 billion. Analysts are looking for $3.12 EPS on revenue of $6.1 billion. Same-store sales are expected to be between flat and down 2.5%.

Contact Andrew Kessel at [email protected]

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Story by ProactiveInvestors