Signet Jewelers Limited SIG, the largest retailer of diamond jewelry globally, released its preliminary sales results for the 10 weeks ending Jan. 11, 2025, covering the holiday season. The company, which owns well-known brands like Jared, Zales and Kay Jewelers, experienced a decline in same-store sales during the holiday season. Softer-than-expected sales compelled management to trim its fourth-quarter fiscal 2025 view. As a result, shares of Signet nosedived 21.7% during the trading session yesterday.

Signet’s Performance Insights for the Holiday Period

The company reported a same-store sales decline of approximately 2% compared to the prior-year period. The period leading up to Christmas saw weaker-than-anticipated performance, which impacted overall sales despite higher average unit retail (AUR). While engagement and service sales met expectations, the fashion gifting segment underperformed as consumers shifted toward lower price points. Merchandise assortment gaps at key price levels limited the company's ability to capitalize on this demand.

Despite lower traffic and conversion, merchandise AUR rose approximately 5%. The Bridal and Fashion categories showed positive growth in AUR. While merchandise margin improved, it fell short of expectations due to greater customer focus on promotional items and a lower fashion mix.

SIG Stock Past Three-Month Performance

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SIG Trims Q4 Guidance

Signet has adjusted its projections for the fourth quarter of fiscal 2025, signaling a tempered outlook. Total sales are now expected to range between $2.32 billion and $2.335 billion, down from the previously forecasted range of $2.38 billion to $2.46 billion. The company has also revised its same-store sales forecast, projecting a decline of 2% to 2.5% year over year, compared to earlier expectations of flat to a 3% increase.

Adjusted operating income is now expected to range from $337 million to $347 million, down from the previous estimate of $397 million to $427 million. Similarly, adjusted EBITDA is now estimated between $381 million and $391 million, lower than the earlier range of $441 million to $471 million.

Nonetheless, the company continues to emphasize strategic adjustments aimed at improving customer engagement and addressing evolving consumer preferences. By refining its product assortment and pricing strategies, the company seeks to strengthen its market position and drive sustainable growth in the future.

Final Words on Signet Stock

Shares of this Zacks Rank #5 (Strongly Sell) company have been struggling on the bourses, declining 42.9% in the past three months as compared with the Retail – Jewelry industry's 38.9% decline. Jewelry purchases are discretionary, and as sentiments remain volatile, the company’s exposure to fluctuating spending patterns poses significant challenges. However, Signet remains committed to leveraging its brand strength and operational foundations to adapt to changing market dynamics while delivering value to its stakeholders.

Key Picks

We have highlighted three better-ranked stocks, namely The Gap, Inc. GAP, Abercrombie & Fitch Co. ANF and Deckers Outdoor Corporation DECK.

Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It presently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Gap’s fiscal 2025 earnings and sales indicates growth of 41.3% and 0.8%, respectively, from the fiscal 2024 reported figures. GAP delivered a trailing four-quarter average earnings surprise of 101.2%.

Abercrombie is a specialty retailer of premium, high-quality casual apparel. It currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for ANF’s fiscal 2025 earnings and sales indicates growth of 69.3% and 15%, respectively, from the fiscal 2024 reported levels. ANF delivered a trailing four-quarter average earnings surprise of 14.8%.

Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It flaunts a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for DECK’s fiscal 2024 earnings and sales indicates growth of 14.2% and 13.6%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 41.1%.

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