Signet Jewelers Drops 12% Following Disappointing Earnings

Signet Jewelers Ltd. SIG delivered worse than expected results for the second quarter sending the stock down by over 10 percent.

The company reported net income of $81.9 million, or $1.06 a share, in the second quarter. On an adjusted basis, it would have earned $87.9 million, or $1.14 a share. In the year-ago quarter, its net income was $62.2 million, or $0.78 a share, and adjusted net income was $102.6 million, or $1.28 a share. Street analysts expected the company to report EPS of $1.34.

Signet generated adjusted sales of $1.376 billion, down from $1.42 billion in the previous year quarter thus missing the analysts' predictions of $1.44 billion.

CEO Mark Light said, "We saw success in a variety of selling channels including outlets, kiosks, and on-line due to improvements in our consumer websites and mobile sites. The Zale integration is running well and synergies remain on target. We remain confident in the medium and long-term prospects of our business."

Going forward, the company expects adjusted EPS to be $0.17-$0.25 for the third quarter while Street analysts estimate $0.50. For the full year, Signet expects adjusted EPS between $7.25 and $7.55, which is sharply below the analysts' predictions of $8.22 a share.

In the pre-market trading, the stock dropped $12.03, or 12.6 percent, to $83.47.