Updated 4:16 p.m. ET June 3
Signet Jewelers, reporting sales gains for the first quarter and displaying confidence in its transformation efforts, saw its share price spike 12.5 percent on Tuesday.
Net income was $33.5 million, or 78 cents per diluted share for the quarter ended May 3, when results were pulled down by tax changes and restructuring charges totaling 46 cents per share. A year ago, earnings stood at $52.1 million, or 90 cents.
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Adjusted operating income, which the company considers a clearer indication of its financial performance, increased to $70.3 million from $57.8 million.
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Sales rose 2 percent to $1.54 billion from $1.51 billion, while comparable-store sales increased 2.5 percent. The average unit retail price increased approximately 8 percent.
The results, as well as a slightly elevated outlook on sales for 2025, pushed shares up $8.32 to $75.13 on Tuesday.
“We really saw balanced growth across all categories,” chief executive officer J.K. Symancyk told WWD.
He attributed much of the sales gain to bridal jewelry, which has continued to show growth since the fourth quarter, and fashion jewelry, where there has been “early wins” in jewelry priced between $250 to $500, a range that Signet in the past did not emphasize enough.
During the interview, the CEO characterized the consumer as “resilient and smart.…They are making choices, but if the design and value proposition are right, and you are connecting in the right emotional ways as a brand, we see the consumer willing to invest and spend. But we certainly recognize it’s a dynamic environment. We don’t take that for granted.”
Symancyk also gave WWD a progress report on Signet’s “Grow Brand Love” transformation strategy, which was completed in the first quarter and involved some reduction in staff size and the elimination of some layers of management.
The headcount reduction was not disclosed because, as Symancyk said: “It wasn’t big enough. It was more about being more efficient and effective and really aligning our structure behind the strategy.”
He also said the reorganization enables management to “speed the clock on how we make decisions, particularly when you speak about being relevant in trend and fashion,” and brings the teams across the Signet portfolio of brands closer to the consumer.
As part of the transformation, Symancyk said he sees fewer than 200 stores across the entire Signet portfolio closing this year.
Another aspect of the strategy calls for the company to be innovative “in three ways,” Symancyk said.
- Developing more design-led assortments that are on-trend and convey greater newness.
- “Dimensionalizing the customer experience” across the brands and no longer taking a standardized approach to store operations.
- Elevating the marketing. “You will see different personalities for each brand,” said Symancyk, adding that the company’s marketing spend grew by 2 percent last quarter, helping drive impressions up 30 percent.
Overall, the strategic plan is intended to accelerate growth in several ways after the company experienced a difficult 2024. Also on the agenda: expansion into new categories such as gifts, building brand loyalty and creating compelling experiences for customers including new store designs. Among the best-performing collections last quarter were Unspoken at Jared, and the Stellar Allure and Whimley collections at Zales.
In his prepared statement, Symancyk said: “While we’re in the early innings of Grow Brand Love, our strategy is already driving growth in both bridal and fashion.
“We delivered positive same-store sales growth each month of the quarter, and into May, by bolstering our offerings at key price points and continuing the evolution of our assortment. Our three largest brands — Kay, Zales and Jared — all saw sequential comp sales improvement from the fourth quarter on higher margins, highlighting the impact of our outsized focus on our larger brands.” Signet also operates Banter by Piercing Pagoda, Diamonds Direct, Blue Nile, JamesAllen.com, Rocksbox, Peoples Jewellers, H. Samuel and Ernest Jones.
Joan Hilson, chief operating and financial officer, said in her prepared statement: “Our renewed promotional strategy and inventory management delivered both gross merchandise margin and adjusted operating margin expansion in the quarter with sales improvement outpacing inventory growth. Given our positive performance, we are increasing the low end and maintaining the high end of our fiscal 2026 operating guidance. This outlook reflects the current macro environment and current tariffs as well as on track cost savings initiatives. Further, we are raising our adjusted EPS guidance to reflect the repurchase of more than 5 percent of outstanding shares year to date.”
Signet brought up the bottom-end of its guidance for 2025 and is now forecasting $6.57 billion to $6.8 billion in sales, from its previous projection of $6.53 billion to $6.8 billion in sales. Same-store sales are now seen ranging from down 2 percent to up 1.5 percent, versus the previous guidance of down 2.5 percent to up 1.5 percent.
Adjusted operating income is seen ranging from $430 million to $510 million, versus the earlier projection of from $420 million to $510 million.
The total sales outlook anticipates a “measured consumer environment, providing for variability in consumer spending over the year,” the company said. Signet also indicated that it expects to absorb current tariffs within the adjusted operating income range provided, and that the forecast excludes any potential impact resulting from any new tariffs and the potential outcome of reciprocal tariffs.
In other first-quarter results, gross margin was $598.8 million, up approximately $26 million from the first quarter last year. Gross margin rate grew 100 basis points to 38.8 percent, driven by gross merchandise margin expansion and leverage on fixed costs.
SG&A was $526 million, or 34.1 percent of sales, up from $515.4 million, and flat to the year-ago first quarter, as a percentage of sales.