CORRECTED-Signet Q4 revenue slightly beats estimates

Overview

• US jewelry retailer's Q4 revenue slightly beat analyst expectations, adjusted EPS beat estimates

• Q4 operating income missed analyst estimates, reflecting modest merchandise margin decline and fixed cost deleverage

• Company raised quarterly dividend nearly 10% and repurchased $27 mln shares in Q4

Outlook

• Signet sees Q1 sales of $1.53 bln to $1.57 bln and SSS growth of 0.5% to 2.5%

• Company expects FY27 sales of $6.6 bln to $6.9 bln and SSS change of (1.25%) to 2.5%

• Signet forecasts FY27 adj diluted EPS of $8.80 to $10.74

Result Drivers

• SAME STORE SALES DECLINE - Q4 same store sales fell 0.7% year-on-year, indicating lower transaction volumes despite higher average unit prices

• MARGIN PRESSURE - Gross margin rate declined 60 basis points due to modest merchandise margin decline and deleverage of fixed costs

• HIGHER SG&A COSTS - SG&A expenses rose as a percentage of sales, driven by a reset of short-term incentive compensation

Company press release: ID:nBw454WFSa

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the apparel & accessories retailers peer group is "buy"

• Wall Street's median 12-month price target for Signet Jewelers Ltd is $101.50, about 28.9% above its March 18 closing price of $78.77

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