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Signet (SIG) Posts Stellar Holiday Results & Raises View

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Signet Jewelers Limited (SIG - Free Report) delivered a stellar performance this holiday season. Solid gains from growth initiatives like unique banner value propositions and advanced connected-commerce capabilities drove the holiday performance. SIG’s innovation efforts also bode well. Backed by an impressive holiday performance, this currently Zacks Rank #1 (Strong Buy) SIG hiked its view for the fiscal fourth quarter and fiscal 2022. You can see the complete list of today’s Zacks #1 Rank stocks here.

Management cited that sales in January were up in high-single digits. This reflected certain shifts owing to the earlier customer shopping. Around 10 shopping days remaining in the fourth quarter of fiscal 2022, management expects delivering a sequential same-store sales (SSS) acceleration in the same quarter. Signet increased the share repurchase authorization by $500 million. SIG has approximately $184 million available for repurchases under its existing share buyback program approved on Aug 23, 2021.

Shares of the renowned jewelry retailer have surged 49.8% in the past six months, outperforming the industry’s 25.6% rally.

Delving Deeper

Signet’s preliminary total same store sales for the nine-week period ended Jan 1, 2022, or the holiday season increased 30.4% to $2.4 billion. Preliminary SSS rose 25.2% year over year and 35.1% on a two-year basis. Broad-based sales across all the banners and merchandise categories grew in double digits.  E-commerce sales were up $52.1 million year over year while brick-and-mortar sales soared $499.9 million.

Segment wise, same store sales in North America improved 30.2% year over year and 33.1% from the two-year ago reading to $2.2 billion. The segment’s SSS, including physical store sales and e-commerce sales, rose 24.8% year over year and 37.8% from the two-year ago actuals. Transactions climbed 8% while the average transaction value jumped 16.3% from the year-ago period’s reported figure. We note that SSS excludes the Diamonds Direct buyout.

Revenues at the International segment increased 30.5% year over year and decreased 3.6% from the two-year ago actuals to $144 million. The unit’s SSS climbed 31.3% from last-year levels and 6.2% from the two-year ago tallies. Transactions increased 27.2% while average transaction value inched up 2.2% from the year-ago period’s figures.

Raised Outlook

Signet now projects total revenues of $2.77 billion and SSS of 22% for the fiscal fourth quarter. SIG expects an adjusted operating income of $388 million. Management had earlier predicted revenues of $2.40-$2.48 billion, SSS of 6-9% and an adjusted operating income of $280-$317 million for the same quarter.

For fiscal 2022, SIG expects total revenues of $7.78 billion, indicating a rise from $7.41-$7.49 billion projected earlier and $5.23 billion generated last fiscal. It predicts an SSS of 48%, implying growth from the earlier view of 41-43%. Adjusted operating income is now forecast at $885 million, suggesting a rise from the prior projection of $777-$814 million.

The Zacks Consensus Estimate for revenues is currently pegged at $2.45 billion for the fourth quarter of fiscal 2022 and $7.46 billion for fiscal 2022. These estimates are likely to see higher revisions in the coming days.

Management looks forward to building sustainable growth in the jewelry category and grab a higher market share. Signet expects to boost its operating margin over time. Signet is benefiting from e-commerce growth and advancements in the Inspiring Brilliance strategy.

3 More Retailers’ Holiday Sales Reports

Zumiez (ZUMZ - Free Report) delivered sales and comparable sales growth during the holiday period despite the ongoing supply-chain headwinds. ZUMZ’s net sales grew 9% during the nine weeks ended Jan 1, 2022, from the level noticed in the nine-week period ended Jan 2, 2021.

Zumiez’s comparable sales jumped 6% for the holiday period. In the aforementioned period, ZUMZ’s Men’s category registered largest comparable sales growth followed by Footwear, Accessories and Women’s.

Five Below (FIVE - Free Report) posted sturdy holiday sales results. FIVE efficiently managed the product flow and remained proactive in meeting consumer demand.

Five Below’s net sales for the holiday period, spanning from Oct 31, 2021 through Jan 1, 2022, climbed 20.6% to $870.9 million from $722.3 million reported in the comparable nine-week period from Nov 1, 2020 through Jan 2, 2021. FIVE’s comparable sales for the holiday shopping season rose 7.7%.

General merchandising retailer Big Lots performed well during the holiday period. BIG’s two-year comps for fiscal November and December grew 9% during the holiday period.

However, Big Lots has been witnessing soft traffic and sales trends since early January 2022. Given the persistence of the existing trends with bad weather conditions, BIG anticipates registering a two-year comps rise in flat-to-low-single-digit percentage for fiscal January.


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