What’s Next for Signet Stock?

Sales and earnings are expected to remain weak

Signet Jewelers’ (SIG) top and bottom lines are likely to remain low in fiscal 2020. The company’s management expects its same-store sales to fall 1.5% or remain flat in fiscal 2020. However, its net sales are expected to be in the range of $6.0 billion–$6.1 billion, lower than the $6.2 billion it reported in fiscal 2019.

A decline in Signet’s comps led by a lower number of transactions is expected to hurt its top line. Meanwhile, Signet’s adjusted EPS are expected to be in the range of $2.87–$3.45, lower than its adjusted EPS of $3.72 in fiscal 2019. Soft sales and pressure on its margins are expected to take a toll on the company’s bottom line.

What’s Next for Signet Stock?

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For the first quarter of fiscal 2020, Signet’s same-store sales are expected to fall 0.5%–1.5%. Meanwhile, Signet Jewelers is expected to report a loss in the first quarter. Signet stock is expected to benefit from its better-than-expected fiscal 2019 fourth-quarter earnings results. However, the projected weakness in its sales and earnings is expected to limit its upside.

Rating summary

Analysts continue to recommend “holds” on Signet stock, as its sales and EPS are expected to remain low in the coming quarters. Meanwhile, analysts have “buy” ratings on rival Tiffany & Co. (TIF) stock. Signet stock is down ~13% on a year-to-date basis as of April 2.