Signet Jewelers Limited (SIG) is a retailer of diamond jewelry. Its merchandise mix includes bridal, fashion, watches, and others. The bridal category includes engagement, wedding, and anniversary purchases. You may know its brands that include Kay, Jared, Zales, and Piercing Pagoda.
Its Canadian stores operate as Peoples Jewellers and Mappins Jewellers. Outside of North America, is legacy UK Jewelry division operates stores in the United Kingdom, Republic of Ireland, and the Channel Islands. These stores operate as H.Samuel and Ernest Jones in shopping malls and off-mall locations.
The company had strong fiscal 2022 first-quarter results where both revenue and earnings topped analyst expectations and rose year over year. This was the company’s fourth straight quarter, where sales and earnings beat estimates. These results were driven by robust growth in its e-commerce channel.
E-commerce sales came in at $346.3 million, up 110.3% from the prior year quarter. SIG also saw broad growth across most regions, channels, and categories. Sales during the quarter were also supported by higher conversion and higher average order value. In fact, same-store sales surged 106.5% year over year.
These results also led to improved guidance for the second-quarter fiscal 2022. Management now expects revenues in the range of $1.6 to $1.65 billion. This is significantly higher than the $888 million generated in the year-ago quarter.
The company also expects same-store sales between 76% and 82% in the second quarter and has raised projections for fiscal 2022. Management now expects revenues in the range of $6.50-$6.65 billion, higher than the previous projection of between $6 and $6.14 billion.
Like many other companies now, SIG has invested in boosting its online shopping experience. The company is even on track to lead digital commerce in the jewelry industry. Management has been looking into combining the digital and in-store experience to help it gain a competitive edge.
It has been integrating its physical stores into the digital customer experience through data-driven in-store consultations and options such as buy online pickup in-store and curbside. SIG is also making interaction a part of its websites, stores, and inventory pipeline.
So far, the company has added more than 100 features and capabilities across its digital platforms. It also rolled out the Google Business Messages and Apple Business Chat features. This allows customers to engage in virtual jewelry consultants in real-time or offline from search results or maps.
Plus, the company has been introducing technology tools such as conversational messaging, improved text search, and virtual try-on and consulting. SIG also recently bought Rocksbox, a jewelry rental subscription service. This should also provide a boost to the company’s online service offerings.
The buyout lines up with SIG’s Inspiring Brilliance strategy. This growth strategy focuses on expanding its big banners, boosting its service revenues, and broadening the Accessible Luxury and Value segments.
SIG has an overall grade of A, translating into a Strong Buy rating in our POWR Ratings system. The company has a Growth Grade of A, which makes sense as analysts expect earnings to rise 301.4% in the current year.
The company also has a Value Grade of B due as its forward P/E is a paltry 11.95. We also provide Momentum, Stability, Sentiment, and Quality grades for SIG, which you can find here. SIG is ranked #7 in the A-rated Fashion & Luxury industry. For more top stocks in this industry, click here.
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SIG shares were trading at $74.91 per share on Wednesday afternoon, down $3.07 (-3.94%). Year-to-date, SIG has gained 175.46%, versus a 21.29% rise in the benchmark S&P 500 index during the same period.
About the Author: David Cohne
David Cohne has 20 years of experience as an investment analyst and writer. He is the Chief Value Strategist for StockNews.com and the editor of POWR Value newsletter. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers. More...
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