Signet (SIG) Up 8% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Signet Jewelers has reported strong second-quarter fiscal 2026 results, with both revenues and earnings exceeding estimates, leading to an upward revision of its fiscal outlook [2][11]. Financial Performance - Adjusted earnings per share for Signet were $1.61, surpassing the Zacks Consensus Estimate of $1.21, and reflecting a 28.8% increase from $1.25 in the previous year [3]. - Total sales reached $1,535.1 million, exceeding the consensus estimate of $1,498 million, and showing a 3% year-over-year increase [4]. - Same-store sales increased by 2% compared to the previous year [2][6]. Margins and Expenses - Gross profit for the quarter was $591.9 million, a 4.5% increase from $566.3 million year-over-year, with a gross margin of 38.6%, up 60 basis points [4][5]. - Selling, general and administrative (SG&A) expenses were $505.3 million, a 1.4% increase from the prior year, with SG&A as a percentage of sales decreasing by 50 basis points to 32.9% [5]. Segment Performance - North American segment sales increased by 2.1% year-over-year to $1.43 billion, with same-store sales also up by 2% [6]. - International segment sales rose by 6.1% year-over-year to $91.8 million, with same-store sales increasing by 0.8% [6]. Store Count - As of August 2, 2025, Signet operated 2,623 stores, a decrease from 2,642, due to eight openings and 27 closures [7]. Financial Snapshot - At the end of the fiscal second quarter, Signet had cash and cash equivalents of $281.4 million and inventories of $1.99 billion, with total shareholders' equity at $1.73 billion [8]. - The company repurchased approximately 446 thousand shares for $32 million during the quarter, with a total of 2.5 million shares repurchased for $150 million over the past six months [9]. Guidance - For Q3 fiscal 2026, Signet expects total sales between $1.34 billion and $1.38 billion, with same-store sales projected to fluctuate between a decline of 1.25% and an increase of 1.25% [10]. - The updated fiscal 2026 guidance anticipates total sales of $6.67 billion to $6.82 billion, with adjusted operating income expected between $445 million and $515 million [11][12]. Estimate Trends - Recent estimates have shown an upward trend, with a consensus estimate shift of -12.7% [13]. VGM Scores - Signet holds a strong Growth Score of A and a Value Score of A, placing it in the top 20% for value investors, with an aggregate VGM Score of A [14].