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Signet Jewelers Stock Loses Shine, Falls 30.4% on Weak 3Q Results

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Sluggish fiscal 3Q18 results

Signet Jewelers (SIG) stock fell 30.4% on Tuesday, November 21, following the company’s weaker-than-expected fiscal 3Q18[1. fiscal 3Q18 ended October 28, 2017] results. The company missed analysts’ estimates and reported a loss in fiscal 3Q18, as analysts expected Signet Jewelers to report a profit.

Lower sales and disruptions due to its credit portfolio transition adversely impacted the company’s bottom-line results. Signet Jewelers recently completed the first phase of this transition, moving its prime-only in-house accounts to Alliance Data Systems (ADS). Its non-prime accounts were transitioned to Genesis Financial Systems.

Signet Jewelers’ (SIG) sales fell in fiscal 3Q18, reflecting decreased customer transactions. Weather-related headwinds and the negative impact of its credit portfolio transition further pressured its top-line growth. However, fashion jewelry generated higher sales.

The company lowered its sales and EPS (earnings per share) outlook as low customer transactions and disruptions from the transition of the credit portfolio are expected to remain a drag. Plus, an unfavorable mix due to low-margin R2Net sales is projected to its hurt margins.

However, cost-saving initiatives, a focus on fast-growing fashion assortments, and a lower share count are expected to supplement the company’s EPS.

YTD stock performance

Signet Jewelers (SIG) stock has fallen 44.0% on a YTD (year-to-date) basis. Soft sales, an intensified promotional environment, and sluggish margins have dented investors’ confidence in the stock. Rival Tiffany & Co.’s (TIF) stock price has risen 20.8% on a YTD basis. Plus, the S&P 500 Index (SPX) has risen 16.1% during the same timeframe.

To read more about Signet Jewelers’ fiscal 3Q18 bottom-line performance, continue to the next part of this series.

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