- Telsey Advisory Group analyst Dana Telsey has reiterated a Market Perform rating on the shares of Signet Jewelers Ltd SIG with a price target of $72.00.
- The company reported a 2.9% growth in Q3 revenue of $1.58 billion and an adjusted EPS of $0.74, beating the estimate of $0.31.
- The analyst said the upside was driven by stronger topline growth as well as better expense control, while gross margin was largely in-line for the period.
- The analyst added that a lower tax rate relative to consensus benefitted EPS by ~$0.06.
- Within the topline, total comparable sales fell 7.6%, including relatively balanced decreases in North America and the International business of 7.6% and 6.7%, respectively.
- The gross margin contraction, the analyst said, could be attributed to occupancy cost deleverage and the impact of the lower margin bridal businesses at Diamonds Direct and Blue Nile.
- Q4 sales are expected to decline in the 5%-8% range to $2.59 billion-$2.66 billion vs. $2.811 billion in 4QF22.
- The analyst said while the sales guide was a touch light, likely speaking the challenges and uncertainties in the current macro-operating environment for the holiday season, the operating income outlook was stronger at $363 million - $404 million versus $411 million last year, above the prior consensus of $364 million.
- The analyst maintained the Market Perform rating, given the uncertainties surrounding the health of the mass consumer heading into the holiday season.
- Price Action: SIG shares are trading higher by 18.7% at $68.66 on the last check Tuesday.
- Photo Via Company
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