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Signet (SIG) Benefits From Its Sturdy Digital Endeavors

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Signet Jewelers Limited SIG has been benefiting from its solid digital efforts. The company is reinforcing its online shopping experience with advanced virtual and digitally native experiences.

Following the successful execution of its Path to Brilliance initiative, the company entered into the next phase of its growth strategy, which is Inspiring Brilliance. Markedly, its Inspiring Brilliance growth strategy, which focuses on expanding big banners, boosting service revenues, broadening the Accessible Luxury and Value segments, and accelerating digital commerce, bodes well.

Let’s Delve Deeper

Speaking of e-commerce, we note that online sales contributed 23.4% to the company’s total sales during fourth-quarter fiscal 2021. In the same quarter, e-commerce sales skyrocketed 70.5% from the prior-year quarter’s level. Notably, this upside was driven by the company’s continued efforts to bolster its omni-channel capabilities. The company is constantly introducing technology tools like conversational messaging, improved text search, virtual try-on and consulting. It also added several new search browse and checkout features.

Signet, which shares space with Guess? GES, Envela ELA and Movado Group MOV, is focused on developing the channel-agnostic retailer capabilities. In addition, Signet bought Rocksbox, a jewelry rental subscription service, which is likely to expedite the company’s online service offerings. This buyout is in sync with Signet’s latest Inspiring Brilliance strategy, which will aid growth in the services category. Through the acquisition of Rocksbox, the company is able to reach out to self-purchasing women customers.

As part of the company’s Inspiring Brilliance policy, Signet will leverage data-driven insights for targeting new and existing customers. It is steadily working toward evolving its Customer First strategy into a consumer-inspired experience, which includes tailored merchandise assortments and expanded service offerings. The company also plans to boost its omni-channel capabilities by focusing on better connection between physical and digital footprints. Furthermore, it is on track with its store-optimization initiatives including transitioning to off-mall formats alongside making efforts toward achieving capital efficiency.

Upbeat Outlook

Buoyed by the aforesaid tailwinds, Signet also raised its first-quarter and fiscal 2022 outlook last month. Management highlighted that strategic efforts and gains from stimulus, tax refunds plus consumer enthusiasm on vaccine rollouts are acting as positives. Also, sturdy conversion and average ticket values were robust.

Encouragingly, the company now projects total revenues in the bracket of $1.57-$1.60 billion and same-store sales of 97-99% for the fiscal first quarter. It currently anticipates an adjusted operating income of $85-$100 million for the same quarter. In the year-earlier quarter, the company generated revenues worth $852.1 million and saw a same-store sales decline of 38.9%.

For fiscal 2022, Signet now forecasts total revenues in the band of $6-$6.14 billion and same-store sales of 17-20% while adjusted operating income is estimated at $335-$364 million. In fiscal 2021, the company reported revenues of $5.23 billion and a same-store sales drop of 10.8%. It continues to anticipate a stronger sales performance during the first half of fiscal 2022.

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Guess, Inc. (GES) : Free Stock Analysis Report
 
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