Holiday Sales, Consumer Spending Trends Weigh On Signet Jewelers’ Stock Ahead Of Q4 Earnings, But Retail’s Optimistic

Shares of Signet Jewelers Ltd (SIG) have increased nearly 1% in the past five trading days ahead of the company’s fourth-quarter earnings, lifting retail sentiment.

Wall Street analysts expect the company to post a 72% increase in revenue to $2.3 billion and a 2,500% rise in earnings per share to $6.25 for the fourth quarter, according to Koyfin.

Signet has beaten EPS estimates thrice in the past four quarters but missed revenue projections all four times in the same period.

Last week, Telsey Advisory lowered the price target to $55 from $65 with a ‘Market Perform’ rating following the company’s disappointing holiday sales and Q4 guidance, when compared to most other retailers’s better-than-expected or in-line holiday sales, Fly reported.

The brokerage is also cautious about the ongoing macroeconomic uncertainty and consumer spending.

In January, Signet, which owns such brands as Kay Jewelers, Zales, Jared, Banter by Piercing Pagoda, said its holiday same store sales fell by 2% from a year ago.

"Fashion gifting underperformed as consumers gravitated to lower price points even more than anticipated in a continued competitive environment,” Joan Hilson, Signet’s CFO and COO, said at the time, adding merchandise assortment gaps at key gifting price points impeded its ability.

Signet has said it expects Q4 comparable sales growth to decline between 2% to 2.5%, compared to its earlier projection of flat to 3% growth. Total sales are expected to be $2.32 billion to $2.34 billion, compared with its earlier projection of $2.38 billion to $2.46 billion.

Retail sentiment on Stocktwits, however, improved to ‘bullish’ from ‘neutral’ a week ago. Message volume was in the extremely high zone compared to extremely low.

Signet’s stock is down 40% year-to-date.

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