Signet's (SIG) Omnichannel Endeavors Appear Encouraging
Signet Jewelers Limited SIG looks well-poised for growth, thanks to its sturdy digital endeavors and smooth progress in its Inspiring Brilliance strategy. The company has been making smart moves to enrich customers’ experience. Sturdy gains from growth initiatives like unique banner value propositions, marketing efforts and advanced connected-commerce capabilities are aiding its performance. SIG’s innovation efforts also bode well.
Buoyed by the aforesaid endeavors, shares of this jewelry retailer have gained 5.1% in the past year against the industry’s 16.5% decline. Analysts seem optimistic about the company. The Zacks Consensus Estimate for fiscal 2025 sales and earnings per share (EPS) is currently pegged at $7.38 billion and $10.46, respectively. These estimates show corresponding increases of 2% and 7.9% year over year.
Let’s Delve Deeper
We note that Signet is consistently integrating its physical stores with advanced virtual experiences through data-driven in-store consultations and services like buy online pickup in-store and curbside options. The company’s connected commerce strategy helps in combining customer experiences, leveraging in store and online as well as mobile and ubiquitous delivery. This is helping the company cater to customers’ needs more aptly.
Image Source: Zacks Investment Research
Digital business is the key growth driver. The company remains focused on enhancing its data-analytics capabilities with higher precision. It is leveraging the analytics capability to optimize the process of adding product assortments. Markedly, the company had added several features and capabilities across its digital platform to offer a seamless customer experience. It has rolled out Google Business Messages and Apple Business Chat features, which allow customers to engage with virtual jewelry consultants in real time or offline from search results or maps. Such efforts indicate that Signet has been focusing on evolving its channel-agnostic retailer capabilities.
Further, the company’s loyalty program is progressing well. It has introduced the option to enroll in the loyalty program while making an account on one of its banner sites, creating a frictionless point of entry for customers. This addition has enabled a more than 50% increase in members during the first quarter of fiscal 2024. Also, the company has implemented over a dozen new priority feature launches and is on track for 20 more in the fiscal second quarter. These features include enhancements to the online merchandise presentation, messaging, appointment booking and services.
As part of the company’s ongoing evaluation of underperforming stores, management expects to close up to 150 stores in the next 12 months, mainly at expiration. Most of the closures will be in traditional mall locations. Management is also focused on differentiating banners by optimizing the company’s store footprint. It has shut over 1,000 underperforming stores in the past six years. Signet expects capital investments of up to $200 million, along with investments in banner differentiation including stores, connected-commerce capabilities, and digital and technology upgrades.
We note that Signet’s Inspiring Brilliance strategy appears encouraging too. This growth strategy focuses on expanding big banners, boosting services, broadening the Accessible Luxury and Value segments, as well as accelerating digital commerce, among others. As part of the Inspiring Brilliance growth strategy, the company makes use of data-driven insights for targeting new and existing customers.
This current Zacks Rank #3 (Hold) company has an expected earnings growth rate of 8% and a Value Score of A, which further demonstrates strength.
Solid Picks in Retail
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch ANF, Urban Outfitters URBN and American Eagle Outfitters AEO.
Abercrombie & Fitch, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 3.4% and 732%, respectively, from the year-ago reported figures. ANF delivered a trailing four-quarter earnings surprise of 480.6%, on average.
Urban Outfitters, the lifestyle apparel and accessories retailer, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 12.2%, on average.
The consensus estimate for Urban Outfitters’ current financial-year sales and EPS suggests growth of 5.1% and 57.1%, respectively, from the year-ago reported figures.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy). AEO delivered an average earnings surprise of 9.2% in the trailing four quarters.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year EPS suggests growth of 4.1% from the year-ago reported figure.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
Signet Jewelers Limited (SIG) : Free Stock Analysis Report
