Signet Jewelers Balances Resilient Demand With Cautious Holiday Outlook

Signet Jewelers Ltd. (NYSE:SIG) shares were up on Wednesday as investors weighed a stronger quarter against a cautious holiday outlook.

• SIG shares are advancing steadily. Check the analyst take here.

The jewelry retailer, which owns Zales, Kay Jewelers, Jared Jewelers, among other stores, highlighted resilient demand, firmer pricing and cost discipline while signaling continued pressure on value-conscious shoppers.

On Tuesday, the company reported third-quarter adjusted earnings per share of 63 cents, beating the Street view of 29 cents.

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Signet delivered higher earnings and wider margins, supported by firm pricing, improved assortments, and tighter cost controls, signaling a more resilient business heading into the holiday season.

The firm expects fourth-quarter sales of $2.24 billion to $2.37 billion.

Analyst Weighs In

Telsey Advisory Group analyst Dana Telsey reiterated the Market Perform rating on the stock, raising the price forecast from $92 to $96.

Holiday guidance was trimmed as weak consumer confidence and a late-third-quarter slowdown pressured expectations, Telsey writes.

She noted that traffic softened from late October through November, especially at banners serving lower- to middle-income shoppers.

This trend shaped Signet's below-consensus fourth-quarter comp outlook, which ranges from a 5% decline to a 0.5% increase.

At the low end, bridal and fashion units would fall by mid-single digits.

Telsey added that Signet has often seen its run rate improve after Thanksgiving and remains hopeful this year follows that pattern. November accounts for only a quarter of quarterly sales, and the most critical period remains the 10 days before Christmas.

She said last year's run-up disappointed because the company lacked depth in lower-priced gifting items.

Management kept a cautious tone for the rest of the holiday season due to external pressures, soft consumer sentiment and expectations that shoppers will seek value.

The fourth-quarter outlook assumes merchandise margin stays flat to slightly higher year over year, which offers flexibility during peak selling.

Telsey said she raised her EPS estimate for fiscal 2026 to $9.33 from $8.91 after the third-quarter beat and updated guidance. She now models fiscal 2027 EPS at $10.24, compared with her earlier estimate of $9.69.

Telsey said management is directing more of its marketing budget toward streaming platforms. She noted that more than 70% of adults now rely on streaming as their main video source.

That shift, she added, is designed to improve reach and efficiency in a weak confidence backdrop.

SIG Price Action: Signet Jewelers shares are trading higher by 1.59% to $90.61 at publication on Wednesday.

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Photo: Zales, Courtesy Signet Jewelers