Signet stock up 20%: ‘we’re prepared for a strong holiday season’

Signet Jewelers Ltd (NYSE: SIG) ended roughly 20% up on Tuesday after reporting its third-quarter results that topped Street estimates by a significant margin.

Signet stock up on raised guidance

The stock is up also because the world’s largest retailer of diamond jewellery raised its guidance for the full year.

It’s now calling for $7.77 billion to $7.84 billion in sales this year on up to $12 of adjusted per-share earnings. On CNBC’s “Closing Bell”, CEO Gina Drosos said:

The revised guidance, she confirmed, includes the company’s recent $360 million acquisition of Blue Nile. Drosos doesn’t expect that business to be profitable in the current quarter but said:

Signet Jewelers Q3 financial highlights

• Earned $48.4 million versus the year-ago $106.9 million
• Per-share earnings also tanked from $1.45 to 60 cents
• On an adjusted basis, EPS came in at a higher 74 cents
• Total sales went up 2.9% year-on-year to $1.60 billion
• Consensus was 32 cents of EPS on $1.50 billion in sales

For the year, Signet stock is still down about 25%.

What else was noteworthy?

Signet Jewelers ended the quarter with inventory down 2.0%, as per the earnings press release. The chief executive noted:

Wall Street currently has a consensus “overweight” rating on the Signet stock.

Drosos also said that the business was not facing any meaningful supply constraints. Signet Jewelers, she added, has increased prices a bit and is also focusing on more premium products for the higher income customers.