Signet Jewelers’ Sales Outlook Tops Estimates After 4Q Beat; Shares Jump Pre-Market

Signet Jewelers forecasted better-than-expected sales in the first quarter and the fiscal year 2022 after fiscal 4Q results (ended Jan. 30) topped consensus estimates. Shares of the world’s largest retailer of diamond jewelry surged almost 8% in the pre-market trading session.

Signet Jewelers’ (SIG) 4Q adjusted earnings rose 13% to $4.15 per share on a year-over-year basis and easily beat the Street estimates of $3.54 per share. Revenues inched up 1.5% to $2.2 billion and outpaced analysts’ expectations of $2.1 billion.

The company’s eCommerce sales surged 70.5% year-over-year, while same-store sales were up 7%. (See Signet Jewelers stock analysis on TipRanks)

Signet Jewelers CEO Virginia C. Drosos said, “We are capitalizing on our momentum as we move into the next phase of our growth strategy called ‘Inspiring Brilliance.’ It is focused on winning in our big banners, categories and countries; accelerating Services revenue; broadening our mid-market with expansion in the Accessible Luxury and Value segments; and accelerating Digital Commerce, all with an emphasis on leading innovation in the jewelry industry and growing the scope of Signet’s market.”

For the fiscal year 2022, the company projects revenue to be in the range of $5.85 billion to $6 billion, versus analysts’ expectations of $5.74 billion.

For the first quarter of 2022, revenue is expected to be between $1.42 billion and $1.46 billion, well ahead of analysts’ expectations of $1.28 billion.

Recently, Citigroup analyst Paul Lejuez increased the stock’s price target to $45 (24.2% downside potential) from $40 and maintained a Hold rating.

In a note to investors, Lejuez said, “While there is significant uncertainty about how spending will shake out in 2021, management is moving in the right direction by closing stores, adding newness across its assortment, adding omni-channel capabilities, and managing expenses prudently.”

Overall, the stock has a Hold consensus rating based on 1 Buy, 2 Holds, and 1 Sell. The average analyst price target of $49.67 implies 16.3% downside potential from current levels.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Signet is currently Neutral, with 4 hedge funds decreasing their cumulative holdings of the stock by 907,600 shares in the last quarter.

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