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Signet Jewelers Beats Q1 Estimates

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Jun. 6 2019, Updated 12:53 p.m. ET

Key takeaways from the first quarter

On June 6, Signet Jewelers (SIG) posted better-than-expected fiscal 2020 first-quarter results. Its top line came in ahead of Wall Street analysts’ consensus estimate thanks to the shift in the timing of promotions at Jared. Its net sales also benefited from growth in e-commerce sales.

However, its net sales continued to decline, reflecting lower same-store sales. A decrease in transactions and a challenging operating environment in the United Kingdom dragged its sales down. Currency volatility further pressured its net sales.

Signet’s adjusted operating income improved on a YoY (year-over-year) basis, reflecting the benefits of its outsourcing of credit. However, increased advertising expenses remained a drag.

Signet Jewelers’ bottom line came in well ahead of analysts’ estimate thanks to its better-than-expected sales and aimproved operating income. However, its adjusted earnings fell 20% on a YoY basis, reflecting a higher adjusted effective tax rate.

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First-quarter financials in brief

Signet Jewelers posted revenue of $1.43 billion in the quarter, higher than analysts’ estimate of $1.42 billion. However, its net sales fell 3.3% on a YoY basis, reflecting a 1.3% decline in same-store sales. Meanwhile, adverse currency rates had a negative impact of 0.7% on Signet’s top line.

Signet Jewelers posted adjusted EPS of $0.08 in the quarter, reflecting a fall of 20% on a YoY basis and a higher effective tax rate. However, its earnings handily surpassed Wall Street’s consensus estimate. Analysts had expected Signet Jewelers to report negative EPS.

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