Shares of Signet Jewelers (NYSE: SIG) rose 27% in premarket trading Thursday after the company posted upbeat second-quarter earnings and lifted its full-year guidance.
The diamond jewelry retailer, however, reported a wider loss compared to the year-ago period as result of goodwill impairment charges and higher costs. Signet Jewelers stock has lost 55% so far this year.
SIG Earnings & Outlook
Net loss for the quarter ended August 3 widened to $44.3 million or $0.86 per share, from $31.2 million or $0.56 per share a year earlier. Adjusted for items such as good will impairment charges, earnings came to $53.1 million or $0.51 per share.
Revenue fell to $1.36 billion from $1.42 billion in the year-ago period. Analysts polled by Refinitiv had expected adjusted earnings of $0.24 per share on sales of $1.34 billion.
Same store sales declined 1.5% but beat expectations of a 3.1% drop. E-commerce sales rose 4.4% to $156.9 million. North America segment revenue was $1.24 billion, while International segment revenue came in at $113.9 million. North America same store sales fell 1% while International same store sales dropped 7%.
Looking ahead, Signet Jewelers expects adjusted EPS of between $2.91 to $3.23 for fiscal 2020 from the previous guidance of $2.88 to $3.17. The company also affirmed its full year revenue outlook of between $6.0 billion to $6.03 billion and same store sales to drop between 1.5% to 2.5%. Wall Street expects full-year adjusted EPS of $2.91 on sales of $6 billion.
Signet Jewelers CEO Comments
Signet Jewelers Chief Executive Virginia C. Drosos said, “We continue to gain traction on our transformation initiatives and delivered second quarter results that exceeded our same store sales, non-GAAP operating profit, and non-GAAP earnings per share expectations. Our continuing cost control and disciplined inventory management also led to improved adjusted free cash flow generation in both the second quarter as well as year to date. We remain on track to deliver our full year non-GAAP financial guidance.”
“As we enter the competitive holiday season, we believe we are positioned to execute our product strategy by launching additional flagship brands, delivering relevant on-trend new merchandise and offering a highly competitive assortment for value-oriented shoppers,” added Drosos.
Signet Jewelers Limited Profile
Signet Jewelers Ltd is a retailer of diamond jewelry. Its merchandise mix includes bridal, fashion, watches and others. The bridal category includes engagement, wedding and anniversary purchases. Its segments are the Sterling Jewelers division, the Zale division, and the UK Jewelry division.
The Sterling Jewelers division consists of the stores which operate in malls and off-mall locations as Kay and Jared. The division also operates mall-based regional brands and the JamesAllen.com website.
The Zale division consists of the two reportable segment, Zale Jewelry, and Piercing Pagoda. The UK Jewelry division consists of the stores operating as H. Samuel and Ernest Jones. It has business operations in the US and other countries and derives key revenue from the Sterling Jewelers division.