Why Diamond Jewelry Retailer Signet's Shares Are Gaining Today

Zinger Key Points
  • Signet witnesses 12.1% sales drop and trims FY24 topline outlook.
  • CEO notes positive Black Friday trends, strong holiday outlook; CFO emphasizes cost savings and healthy inventory.

Signet Jewelers Ltd SIG shares are trading higher by around 4% after it reported Q3 FY24 results. Sales declined 12.1% YY to $1.392 billion, marginally beating the analyst consensus of $1.390 billion. Same-store sales were down 11.8% versus last year.

North America segment sales amounted to $1.3 billion, an 11.9% decrease Y/Y. Same-store sales for the segment decreased 12.3% versus last year. International segment same-store sales decreased 4.6%, and sales fell 1.4% Y/Y to $94.0 million.

Gross margin of 36.0%, up 110 basis points Y/Y. The operating income for the quarter was $13.3 million versus $48.4 million last year, with an operating margin of 1.0%.

Adjusted EPS of $0.24 beat the analyst consensus estimate of $1.18. 

"Trends through Black Friday weekend, including sequential improvement in engagement trends, are performing in line with guidance expectations for the fourth quarter. As we enter the holiday season, jewelry remains a top of mind gifting category for consumers in a value conscious shopping environment," commented Virginia C. Drosos, CEO. 

Signet's operating cash flow used year-to-date was $(205.3) million versus $(155.5) million in the prior year. It held cash and equivalents of $643.8 million as of October 28, 2023.

Inventory ended the quarter at $2.1 billion, approximately 14% below Q3 of FY23.

RelatedSignet Jewelers' Engagement Sales Set to Rebound In Q4: Analyst Asserts

Dividend: Signet's Board declared a quarterly cash dividend of $0.23 per share, payable on February 23, 2024, to shareholders of record on January 26, 2024.

As of December 1, Signet has repurchased approximately 1.8 million shares for $128.5 million, including $35.1 million during the third quarter. It had shares around $672 million remaining under the multi-year authorization.

Guidance: Signet expects Q4 sales of $2.40 billion - $2.60 billion, versus the consensus of $2.55 billion.

SIG lowered the outlook for FY24 sales to $7.07 billion - $7.27 billion from $7.10 billion - $7.30 billion (vs. consensus of $7.22 billion).

Signet revised FY24 adjusted EPS outlook to $9.55-$10.18 from $9.55 - $10.14, against the Street view of $9.81.

"Cost savings initiatives are on track and healthy inventory enables product newness as we enter the holiday season and improved free cash flow, allowing Signet to return nearly $160 million to shareholders already this year," said Joan Hilson, Chief Financial, Strategy & Services Officer.

Price Action: SIG shares are up 3.73% at $87.95 on the last check Tuesday.

Photo Via Company

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsEquitiesMid CapNewsGuidanceDividendsBuybacksMarketsMoversBriefswhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!