Signet Expects Upbeat 4Q Sales Boosted By Holiday Demand; Shares Gain


Shares of Signet Jewelers Ltd. are up about 2% in Thursday’s pre-market session after the company reported projected better-than-expected sales for the fourth quarter, following a robust holiday season. Signet expects to report its 4QFY21 results in March.

Signet (SIG) said that its preliminary holiday sales stood at $1.8 billion, flat from the year-ago quarter. While its brick-and-mortar sales dropped 4.1% in the holiday season, e-commerce sales spiked 60.8%. Same-store sales (comps) grew 5.6% during the holiday period.

Meanwhile, Signet now expects its 4Q comps to be in the range of 4% to 5%, more than double compared to the 1.8% growth analysts had been looking for. The company further expects to generate 4Q sales of between $2.10 billion to $2.12 billion, compared to the Street consensus of $2 billion. (See SIG stock analysis on TipRanks)

The company said that it closed 355 stores out of the 380 stores planned for closures in fiscal 2021.

Citigroup analyst Paul Lejuez upgraded Signet Jewelers to Hold from Sell and more than doubled the stock’s price target to $40 (2.5% upside potential) from $17. Despite long-term concerns, the analyst said in a note to investors that holiday sales trends were favorable.

Like Lejuez, the rest of the Street is sidelined on the stock with the analyst consensus of a Hold based on 2 Holds, 1 Buy and 1 Sell. Following the sharp 103% rally over the past year, the average analyst price target of $37.25 implies downside potential of about 4.5% to current levels.

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