Signet Jewelers Ltd (SIG) Q1 2026 Earnings Call Highlights: Strong Growth in E-commerce and ...

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04-06-2025

Revenue: $1.5 billion for the quarter.
Same-Store Sales Growth: 2.5% increase.
E-commerce Sales Growth: Double-digit growth for Kay, Zales, and Jared.
Merchandise Average Unit Retail (AUR): Increased approximately 8% overall; fashion up 10%, bridal up slightly.
Gross Margin Expansion: 100 basis points increase from last year.
Adjusted Operating Income: $70 million, up more than 20% from last year.
Adjusted EPS: $1.18, above last year.
Inventory: $2 billion, up approximately 1%.
Cash Position: $264 million, with total liquidity of $1.4 billion.
Share Repurchases: Approximately 2.3 million shares repurchased year-to-date.
Store Closures: 14 stores closed in the quarter; plan to close just under 100 stores within the fiscal year.
Guidance for Q2 Sales: $1.47 billion to $1.51 billion.
Full-Year Sales Guidance: $6.57 billion to $6.8 billion.
Capital Expenditures: Expected to be $145 million to $160 million.
Warning! GuruFocus has detected 7 Warning Sign with DG.
Release Date: June 03, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Signet Jewelers Ltd (NYSE:SIG) reported same-store sales and operating income growth above their guidance range for the first quarter.
The company's 'Grow Brand Love' strategy is showing early signs of delivering long-term sustainable growth by aligning brands with customer expectations.
Signet Jewelers Ltd (NYSE:SIG) achieved a more than 30% increase in impressions for its three largest brands with only a low single-digit increase in ad spend.
The company reported a 60% increase in lab-grown diamond (LGD) fashion sales, contributing to an 8% increase in average unit retail (AUR) for fashion.
Signet Jewelers Ltd (NYSE:SIG) expanded its gross margin by 100 basis points year-over-year, driven by refined promotional strategies and inventory management.
James Allen, one of Signet Jewelers Ltd (NYSE:SIG)'s digital brands, created 140 basis points of pressure on comps due to lower brand awareness and positioning challenges.
The company faces potential cost impacts and supply chain disruptions due to tariffs, particularly with imports from India and China.
Signet Jewelers Ltd (NYSE:SIG) is closing up to 150 underperforming stores over the next two years, reflecting challenges in certain retail locations.
The company anticipates slightly higher SG&A as a percentage of sales year-over-year, partly due to incentive compensation resets.
Signet Jewelers Ltd (NYSE:SIG) is navigating a dynamic macroeconomic landscape, which includes potential consumer spending variability and tariff uncertainties.
Q: Can you quantify the unmitigated tariff pressure and discuss the actions being taken to mitigate these pressures? Also, how are pricing trends in lab-grown and natural diamonds within the bridal and fashion categories? A: J.K. Symancyk, CEO, explained that the company is focusing on design and assortment architecture to maintain margin structure amidst tariff pressures. The tariffs primarily affect imports from India, and the company is leveraging its long lead times and strong inventory position to adjust assortments. Lab-grown diamonds (LGD) have seen continued deflation but are contributing to an increase in average unit retail (AUR) due to consumer trade-ups. Joan Hilson, CFO, added that the guidance includes the current impact of tariffs, with flexibility for unforeseen changes.
Q: How is the performance of fashion compared to bridal, and have you seen an increase in new customers due to lab-grown diamonds? A: J.K. Symancyk, CEO, noted that while bridal trends are improving, fashion has shown sequential improvement, particularly in the sub-$500 price point. The introduction of new collections has helped drive positive same-store sales. Lab-grown diamonds have indeed attracted new customers, contributing to growth in both bridal and fashion categories.
Q: What are you seeing in terms of consumer health across different brands, and how are you preparing for the upcoming holiday season amidst tariff concerns? A: J.K. Symancyk, CEO, stated that consumer resilience is evident, with AUR growth driven by aligning with consumer trends. For the holiday season, the company plans to focus on targeted marketing and reducing promotional noise, leveraging increased digital reach to expand their customer base.
Q: Could you provide details on the penetration of lab-grown diamonds and the implications for your guidance? A: J.K. Symancyk, CEO, mentioned that lab-grown diamonds now represent about 20% of their business, up 5 points from last year. This growth is aligned with their strategic positioning and is expected to drive gross margin expansion. Joan Hilson, CFO, added that the current quarter's performance is near the high end of their guidance range, with flexibility built in for consumer variability.
Q: How does the company view the risk of increased tariffs on lab-grown diamonds from India, and what is the outlook for the bridal category? A: J.K. Symancyk, CEO, emphasized that the company is actively managing tariff risks through a task force and leveraging its scale with partners. The lab-grown diamond category is less pressured due to controllable input costs. In the bridal category, unit growth has exceeded industry trends, supported by improved assortment architecture.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.