Signet Jewelers, the nation’s largest jewelry retailer operating the Zales, Kay, Jared and Blue Nile brands, saw some sales momentum last quarter.
Comparable sales inched up 1.8 percent to $1.6 billion during the first quarter, which ended May 2.
Operating income of $36.9 million was down from $48.1 million in the year-ago period. But adjusted operating income rose to $78.6 million from $70.3 million. Net income slipped to $31.7 million from $33.5 million.
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Diluted earnings per share tallied 78 cents, including 78 cents of restructuring charges. Adjusted diluted earnings per share rose to $1.56 from $1.18.
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Signet pushed up the lower end of its sales forecast for 2026, setting it to a range of $6.7 billion to $6.9 billion compared with $6.6 billion to $6.9 billion previously forecast. Adjusted earnings per share guidance was raised to $9.20 to $11.00, from $8.80 to $10.74.
Wall Street approved of the results and outlook and pushed Signet’s stock price up 3.7 percent to $87.97 by the close of Tuesday’s trading.
“We drove top-line growth in the first quarter with all categories up on a comparable sales basis. We also delivered positive performances for both Valentine’s Day in February as well as Mother’s Day to start the second quarter,” said J.K. Symancyk, chief executive officer. “These early proof points of our Grow Brand Love strategy show we can perform and transform at the same time. We’re accelerating go-to-market plans across Kay, Zales and Jared — sharpening brand distinction through more impactful marketing, redesigning digital experiences and creating more compelling store environments. These initiatives build on each brand’s strengths and are designed to foster sustainable growth.”
Joan Hilson, Signet’s chief operating and financial officer, said, “We delivered double-digit adjusted operating income growth in the first quarter driven by cost reduction from the reorganization completed last year and leverage from comparable sales growth. Our consistent performance, inventory management, and free cash flow conversion has allowed us to return over $125 million to shareholders this year through today. We also intend to initiate a $50 million accelerated share repurchase plan this month as part of Signet’s ongoing programmatic returns to shareholders.”
In other statistics, Signet’s average unit retail price was up approximately 5 percent compared with the first quarter of last year, with growth in both bridal and fashion, the company indicated. Gross margin was $556.5 million, or 35.8 percent of sales, down approximately $42 million to the year-ago quarter. The gross margin decline included inventory write-downs relating to the transition of James Allen, which has become a proprietary brand within the Blue Nile website. Jamesallen.com is being discontinued.
Signet’s “Grow Brand Love” transformation strategy is in its second year. It involves efforts to differentiate the four core brands, bring greater style and design-led items to the assortments, pump up bridal jewelry, and centralize certain functions and consolidate some brands in pursuit of operating efficiencies and greater agility.
As reported by WWD last week, Signet, seeking to strengthen the luxury positioning and level of service at its Blue Nile brand, is purchasing The Clear Cut, a small, New York-based, digitally native natural diamond jewelry brand known for its bespoke bridal and fine jewelry and personalized service. The company creates custom rings with diamonds, and guides customers through the entire shopping journey from initial conversations with gemologists, to the appraisals, down to the shipping. The Clear Cut will be integrated into Blue Nile, which has been undergoing a major repositioning to what the company describes as “elevated luxury jewelry anchored in natural diamonds,” and to differentiate itself from the other Signet brands, at the highest price spectrum of the portfolio. The purchase was not material to Signet’s financials.