Signet Jewelers Limited SIG posted fourth-quarter fiscal 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. However, both revenues and earnings declined year over year. Also, same-store sales fell 1.1% from the year-ago period.
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This Zacks Rank #4 (Sell) company’s shares have lost 40.5% in the past three months compared with the industry’s 35.7% decline.
Signet Jewelers Limited Price, Consensus and EPS Surprise
SIG reported adjusted earnings of $6.62 per share, surpassing the Zacks Consensus Estimate of $6.39. However, the bottom line declined 1.6% from adjusted earnings of $6.73 in the year-ago period.
This jewelry retailer generated total sales of $2,352.6 million, beating the consensus estimate of $2,330 million. However, the top line fell 5.8% year over year. The metric also declined 5.7% at constant currency.
Insight Into SIG’s Margins & Expenses
The gross profit in the fiscal fourth quarter amounted to $1 billion, down 7.4% from $1.08 billion in the year-ago quarter. The gross margin declined 70 basis points (bps) year over year to 42.6% in the quarter under review. The gross merchandise margin increased 30 bps, largely offset by the deleveraging of fixed costs.
Selling, general and administrative (SG&A) expenses were $639.2 million, down 4.9% from the prior-year quarter. Meanwhile, SG&A expenses, as a percentage of sales, were 27.2%, which deleveraged 30 bps year over year. The increase was primarily driven by higher advertising expenses amid lower sales.
SIG reported adjusted operating income of $355.5 million, down 13.2% from $409.7 million in the year-ago quarter. As a rate of sales, the adjusted operating margin decreased 130 bps to 15.1%.
Update on Signet’s Segmental Performance
Sales in the North American segment fell 5.6% year over year to $2.22 billion, which beat the Zacks Consensus Estimate of $2.19 billion. Same-store sales tumbled 1.1% year over year.
Sales in the International segment decreased 10.9% year over year to $126.2 million, lagging the consensus estimate of $137 million. Same-store sales slipped 1.5% year over year. Sales fell 11% on a constant-currency basis.
Update on SIG's Stores
As of Feb. 1, 2025, the North American segment had 2,379 stores, a decrease from 2,411 in February 2024 due to 18 openings and 50 closures. The International segment had 263 stores, down from 287 after 24 closures and no openings. Overall, Signet had 2,642 stores, down from 2,698, following 18 openings and 74 closures.
SIG ended the fiscal fourth quarter with cash and cash equivalents of $604 million, and inventories of $1.94 billion. Total shareholders’ equity was $1.85 billion at the end of the fiscal fourth quarter.
As of Feb. 1, 2025, net cash provided was $590.9 million in operating activities.
In fiscal 2025, Signet repurchased 1.6 million shares for $138 million, including $24.2 million in the fourth quarter. At the end of the fiscal year, the company had approximately $723 million remaining under its share repurchase authorization.
SIG Stock Past Three-Month Performance
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SIG’s Q1 Guidance
For the first quarter of fiscal 2026, total sales are expected between $1.50 billion and $1.53 billion, with same-store sales projected to be flat to an increase of 2%. Adjusted operating income is forecast between $48 million and $60 million. Adjusted EBITDA is expected to be $94-$106 million.
What to Expect From Signet in FY26?
For fiscal 2026, total sales are projected between $6.53 billion and $6.80 billion, with same-store sales expected between a decline of 2.5% and an increase of 1.5%. Adjusted operating income is anticipated between $420 million and $510 million, while adjusted EBITDA is forecast to be $605-$695 million. Adjusted EPS is expected between $7.31 and $9.10.
The company's fiscal 2026 guidance is based on several key assumptions. Total sales projections account for a measured consumer environment, considering potential fluctuations in consumer spending throughout the year.
The guidance does not incorporate any significant impact from new tariffs or regulations, as the company actively manages tariffs and collaborates with vendors as needed. Planned capital expenditure is expected to be $145-$160 million, with a net square footage decline of 1% to flat for the year.
Stocks to Consider
Some better-ranked stocks are The Gap, Inc. GAP, Deckers Outdoor Corporation DECK and Urban Outfitters Inc. URBN.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It flaunts a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Gap’s fiscal 2025 earnings and revenues indicates growth of 7.7% and 1.5%, respectively, from the fiscal 2024 reported levels. GAP delivered a trailing four-quarter average earnings surprise of 77.5%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for DECK’s fiscal 2025 earnings and revenues implies growth of 21% and 15.6%, respectively, from the year-ago actuals. Deckers delivered a trailing four-quarter average earnings surprise of 36.8%.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift items. It has a Zacks Rank of 2 at present. The company delivered a 16.9% earnings surprise in the last reported quarter.
The consensus estimate for URBN’s fiscal 2025 earnings and revenues indicates growth of 11.8% and 6%, respectively, from the fiscal 2024 reported levels. URBN delivered a trailing four-quarter average earnings surprise of 28.4%.
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