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Signet (SIG) to Post Q1 Earnings: What Awaits the Stock?

·4 min read

Signet Jewelers Limited SIG is likely to register top- and bottom-line growth when it reports first-quarter fiscal 2022 results on Jun 10, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $1,602 million, which indicates a surge of 88% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings has moved up 6.8% in the past 30 days to $1.41 per share. In the prior-year quarter, the company had reported a loss of $1.59 per share. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by 15.6%. This renowned jewelry and accessories retailer has a trailing four-quarter earnings surprise of 52.5%, on average.

Key aspects to Note

Signet’s top line is likely to have gained from growth in e-commerce sales, backed by efficient omni-channel capabilities. In fact, omni-channel capabilities are a key aspect of the company’s ‘Signet Path to Brilliance’ plan. Markedly the company has been introducing technology tools like conversational messaging, improved tech search, virtual try-on and consulting. Encouragingly, management added several new search browse and checkout features during the second half of fiscal 2021.

Additionally, the company is likely to have gained from efforts to boost assortments, especially its big banners as well as the Accessible Luxury and Value categories. It also focuses on boosting customer’s shopping experience as well as tailored merchandise assortments and services. Apart from these, gains from stimulus, tax refunds and increased vaccine rollouts are likely to have acted as tailwinds in the reported quarter.

On Apr 12, 2021, management stated that for the first quarter total revenues are expected in the bracket of $1.57-$1.60 billion and same-store sales between 97% and 99%. Further, adjusted operating income is anticipated in the range of $85-$100 million.

However, we cannot ignore the concerns surrounding soft brick-and-mortar operation. Soft traffic trends in combination with strategic promotions are likely to have been a drag on the company’s margins.

Signet Jewelers Limited Price, Consensus and EPS Surprise

Signet Jewelers Limited Price, Consensus and EPS Surprise
Signet Jewelers Limited Price, Consensus and EPS Surprise

Signet Jewelers Limited price-consensus-eps-surprise-chart | Signet Jewelers Limited Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Signet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Signet has a Zacks Rank #2 and an Earnings ESP of +2.84%.

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Yum Brands, Inc. YUM currently has an Earnings ESP of +1.86% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shake Shack, Inc. SHAK currently has an Earnings ESP of +5.71% and a Zacks Rank #3.

Dave & Busters Entertainment, Inc. PLAY currently has an Earnings ESP of +107.90% and carries a Zacks Rank #3.

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