Why Is Signet Jewelers Stock Losing Its Shine Today?

Signet Jewelers Ltd SIG reported a fourth-quarter fiscal 2024 sales decline of 6.3% year-over-year to $2.498 billion, missing the consensus of $2.547 billion. Same-store sales for the quarter were down 9.6%.

North America segment sales amounted to $2.35 billion, a 6.1% decline Y/Y. Same-store sales for the segment decreased 10%. International segment same-store sales decreased 1%, and sales fell 7.5% Y/Y to $141.7 million.

Gross margin expanded 160 bps to 43.3%, driven by a 130 bps of merchandise margin expansion.

Adjusted operating income for the quarter was $409.7 million versus $404.7 million last year, with an operating margin of 16.4%, up from 15.2% YoY.

Adjusted EPS was $6.73, up from $5.52 a year ago, beating the consensus of $6.37. 

At the end of the quarter, Signet’s cash and equivalents were $1.4 billion. Operating cash flow for the fiscal totaled $546.9 million, compared to $797.9 million in 2023.

During the fourth quarter, the company repurchased $21.8 million, or ~246,000 shares. Inventory ended the year at $1.94 billion, down $213.7 million from last year.

“Fueled by robust cash conversion, we are raising our share buyback program from approximately $650 million to $850 million, increasing our common dividend, and maintaining ample financial capacity to address maturities this fiscal year,” commented Joan Hilson, Chief Financial, Strategy & Services Officer.

“Our Fiscal 2025 guidance reflects the beginning of the three-year engagement recovery, investments in our strategic initiatives, and continuing cost diligence to drive operating income, including $150 million to $180 million in cost savings this year,” added Joan.

Dividend: Signet’s Board increased its quarterly cash dividend by 26% to $0.29 per share, payable May 24, 2024, to shareholders of record on April 26, 2024.

Q1 Guidance: Signet expects first-quarter sales to be $1.47 billion-$1.53 billion, versus the consensus of $1.61 billion, and same store sales of (11%) – (7%).

The company sees operating income for the quarter of $40 million-$60 million and Adjusted EBITDA of $87 million-$107 million.

FY25 Guidance: SIG expects sales of $6.66 billion-$7.02 billion versus the consensus of $7.17 billion and EPS of $9.08-$10.48, below the consensus of $10.57.

Signet sees operating income for the fiscal year of $590 million-$675 million and Adjusted EBITDA of $780 million-$865 million.

Management Change: Signet has appointed Helen McCluskey to succeed Todd Stitzer as its non-executive Chair.

The company stated Todd Stitzer would be completing his term as Chair and member of the Board in June, as its Director Tenure Policy includes a 12-year term limit, which Stitzer will meet as of the 2024 Annual General Meeting.

Price Action: SIG shares are trading lower by 11.6% at $90.61 on Wednesday.

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