Signet Jewelers Limited’s SIG strong strategic initiatives and commitment to innovation have solidified its market leadership. SIG is well-positioned for sustainable growth through effective inventory management, real estate optimization and operational efficiency enhancement. As it continues to adapt to consumer trends and drive shareholder value, the company remains poised for long-term success in an evolving retail environment.
SIG’s Strength in Bridal & Fashion Jewelry Segments
Signet experienced significant growth in its bridal and fashion jewelry segments in the fourth quarter of fiscal 2025. Bridal jewelry, which constitutes nearly half of the company’s merchandise sales, recorded a 2% increase in average unit retail (AUR), marking its strongest performance in two years. This growth reflects the effectiveness of the company’s pricing strategies and product innovations, which have resonated with high-spending customers.
Fashion jewelry also demonstrated robust performance, with an 8% increase in AUR. A key driver behind this rise was the 60% surge in lab-grown diamond sales as of March 19. This segment not only contributed to a more premium product mix but also increased its market penetration by five percentage points. By catering to both traditional and emerging consumer preferences, Signet has solidified its ability to attract and retain a diverse customer base, ensuring a steady upward trend in AUR across these key categories.
SIG Stock Past Three-Month Performance
Zacks Investment Research
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Operational Efficiency & Restructuring Initiatives of Signet
In an effort to drive operational efficiency, SIG undertook a significant organizational restructuring in the fiscal fourth quarter. The company transitioned from a traditional banner-oriented approach to a more dynamic, brand-centric strategy. This restructuring involved a 30% reduction in senior leadership and the centralization of key functions, such as merchandising, media buying and repair services, to achieve cost efficiencies.
Signet focused on controlling store labor costs and streamlining SG&A costs, which declined 4.9% year over year to $639.2 million. While there was a slight percentage increase due to advertising investments, management expects to realize $50-$60 million in annual cost savings from these initiatives.
Over the long term, the company aims to achieve at least $100 million in SG&A improvements. This restructuring is designed to enhance decision-making, improve accountability and ultimately boost profit margins, positioning Signet for sustainable growth.
SIG’s Optimistic Outlook for FY26
Signet’s fiscal 2026 guidance underscores confidence in its solid performance. For the first quarter, the company anticipates total sales of $1.5-$1.53 billion, with same-store sales between flat and a 2% increase. This follows total sales of $1.5 billion and an 8.9% year-over-year decline in same-store sales in the prior-year period. Adjusted operating income is projected at $48-$60 million, while adjusted EBITDA is expected to be $94-$106 million, whereas it reported $57.8 million and $101.5 million, respectively, in the first quarter of fiscal 2025.
For fiscal 2026, revenues are forecast between $6.53 billion and $6.8 billion, with same-store sales fluctuating between a 2.5% decline and a 1.5% increase. This compares with fiscal 2025 total sales of $6.7 billion and a 3.4% drop in same-store sales.
Management expects adjusted operating income between $420 million and $510 million, driven by cost savings from ongoing restructuring initiatives. Adjusted EBITDA is estimated at $605-$695 million, and adjusted earnings per share (EPS) is projected between $7.31 and $9.10, whereas it reported fiscal 2025 adjusted EBITDA of $666.1 million and EPS of $8.94.
SIG Stock’s Attractive Valuation
From a valuation perspective, the stock presents an attractive opportunity, trading at a discount relative to the industry benchmark. With a forward 12-month price-to-sales ratio of 0.38, which is below the industry’s average of 0.64 in the past year, the stock offers compelling value for investors seeking exposure to the sector. It currently has a Value Score of A, further validating its appeal.
SIG Looks Attractive From a Valuation Standpoint
Zacks Investment Research
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Signet’s North America & International Units: a Key Hurdle
SIG faced a significant decline in both North American and International segments. North American sales dropped 5.6% year over year to $2.22 billion in the fiscal fourth quarter, leading to a 1.1% drop in same-store sales. International sales fell 10.9% year over year to $126.2 million. Same-store sales slipped 1.5%, with sales down 11% on a constant-currency basis. This weaker-than-expected sales performance signals potential headwinds in maintaining revenue growth moving forward.
Shares of this Zacks Rank #3 (Hold) company have lost 28.5% in the past three months compared with the industry’s decline of 25.5%.
Stocks to Consider
Some better-ranked stocks are The Gap, Inc. GAP, Deckers Outdoor Corporation DECK and G-III Apparel Group, Ltd. GIII.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It sports a Zacks Rank #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 1.6%, 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 has a Zacks Rank of 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. DECK delivered a trailing four-quarter average earnings surprise of 36.8%.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for GIII’s fiscal 2025 earnings and revenues implies declines of 4.5% and 1.2%, respectively, from the year-ago actuals. GIII delivered a trailing four-quarter average earnings surprise of 117.8%.
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