Briefly –
- Signet Jewelers announced strong Q1 earnings.
- The company’s management revised financial guidance.
- Signet announced a $0.20 quarterly share dividend.
Signet Jewelers Limited announced steady Q1 earnings this month, though the company’s stock is yet to stabilize. The shares trade under NYSE: SIG ticker. Meanwhile, the firm’s management updated fiscal guidance for the Q2 and the entire 2021 financial year.
Store Sales Remain Elevated
Signet Jewelers is a leading diamond jewelry retailer that runs nearly 2,800 stores. It boasts brands in the United States, Canada, and the United Kingdom. Some renowned brands by Signet Jewelers include Ernest Jones, H.Samuel, Peoples Jewellers, Rocksbox, JamesAllen.com, Banter Piercing Pagoda, Jared, Diamonds Direct, Zales, and Kay Jewelers.
Signet Jewelers announced Q1 earnings at the start of the month. Overall revenue saw an 8.9% Y/Y increase to 41.84 billion. Meanwhile, the non-GAAP results per share stood at $2.86 ($0.48 beat).
Optimistic news is that store sales surged 2.5% from the past year as global sales flourished while growing supply chain issues and inflation has the non-GAAP operating margin expanding.
Virginia C. Drosos, the CEO, said the company’s scale, diversified banner portfolio, and massive balance sheet. That helps it traverse macro uncertainties, ensure a stable yearly double-digit margin, and invest in various capabilities to expand its competitive edge.
The firm’s management updated monetary guidance for Q2 and the 2023 financial year. It expects Q2 total revenue at $179 – $1.82 billion vs. $1.81 billion in consensus, whereas earnings from operations should range from $188M – $204M.
Overall revenue for the entire financial year should range between $8.03B and $8.25B vs. a consensus of $8.03B. Meanwhile, earnings from operations need to stand at $921M – $974M. Furthermore, Signet revealed a $0.20-quarterly share dividend, payable to shareholders on 26 August.
Fundamentally, Signet’s market cap stands at $2.74 billion. Moreover, it trades less than 3-times TTM EBITDA. That makes the company’s shares a lucrative buy for long-term traders.
Technical Analysis
Signet Jewelers (SIG) lost over 25% from the latest peaks beyond $80, recorded in April. The current price might be a lucrative entry for investors with long-term goals. An uptick past $65 will signal ‘trade,’ and SIG will target $70. Meanwhile, the crucial support sits at $50, and falling beneath it would present a sell signal, opening the path to $45.
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