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Will Signet Stock Get a Boost from Its Q1 Beat?


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

Challenges persist

Signet Jewelers (SIG) stock is expected to benefit from its better-than-expected performance in the first quarter of fiscal 2020. However, persisting challenges could limit its recovery. Signet Jewelers’ top line is expected to continue to fall, reflecting lower same-store sales. Meanwhile, challenges in the United Kingdom and adverse currency rates are expected to remain a drag.

The company’s management expects its same-store sales to decrease 2.5%–3.5% in the second quarter of fiscal 2020. Meanwhile, its full-year same-store sales are expected to mark a decrease of 1.5%–2.5%. Signet’s adjusted EPS are also expected to stay low. Its management expects its adjusted EPS to be in the range of $0.23–$0.30 in the second quarter. It posted adjusted EPS of $0.52 in the second quarter of fiscal 2019.

The continued weakness in Signet’s sales and earnings and the challenging operating environment, including the US-China trade spat, could limit the recovery in its stock. However, the company’s multiyear low valuation provides some comfort.

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Stock performance

Shares of Signet Jewelers have underperformed the broader markets so far this year and have fallen 38.9% on a YTD (year-to-date) basis as of June 5. The fall in SIG’s price reflects the company’s continued weak financial performance. In comparison, shares of Tiffany & Co. (TIF) are up 14.8% YTD.


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