Signet Jewelers stock soars after holiday sales, new strategy boosts results

Takeaways

• Signet Jewelers announced better-than expected results and issued a rosy forecast on strong sales after the holidays and its strategy to expand the business.
• The owner of Zales, Jared, and Kay Jewelers has benefited from the demand for products at key prices points and improved bridal trends.
• Signet has also announced plans to reduce its number of stores in shopping malls.

Signet Jewelers (SIG) shares soared more than 20% Wednesday after the jewelry retailer posted better-than-anticipated profit and sales, issued a rosy outlook, and announced plans to reduce its real-estate footprint.

VisibleAlpha surveyed analysts who expected $6.25. The owner of Zales Jared Kay Jewelers reported fiscal 2020 fourth-quarter adjusted earnings (EPS) of 6.62. The company beat expectations despite revenue falling 6% to $2.35 billion, and same-store sales declining 1.1%. 

CEO J.K. Symancyk credited the performance to Signet's "depth of assortment at key price points while also benefiting from improved Bridal trends." Symancyk added that the company benefited from its "Grow Brand Love" strategy to expand its business.

Signet Expects to 'Transition Over 10% of Mall Locations to Off-Mall' in Next 3 Years

COO and CFO Joan Hilson said as part of the reorganization plan, Signet was "focused on real estate optimization and (expects) to transition over 10% of mall locations to off-mall and the eCommerce channel over the next three years."

The company predicts that current-quarter revenues will range from $1.50 billion up to $1.53 Billion, with same-store sales remaining flat or increasing by 2.0%. Visible Alpha forecasts $1.51 Billion and 0.65% respectively.

Even with today's 22% increase, Signet Jewelers shares are down more than 40% over the last year.