Why Signet Jewelers (SIG) Stock Is Gaining Today

Tickers in this article: SIG

NEW YORK ( TheStreet) --  Signet Jewelers was gaining 5.7% to $103.95 Thursday after beating analysts' expectations for earnings and revenue in the fiscal fourth quarter.

The owner of the Kay Jewelers chain reported earnings of $2.18 a share for the quarter, beating analysts' estimates of $2.15 a share by 3 cents. Revenue rose 3.3% from the year-ago quarter to $1.56 billion. Analysts surveyed by Thomson Reuters expected revenue of $1.55 billion for the quarter.

Same-store sales rose 4.3% in the quarter across all brands. For the Kay brand same-store sales grew 4.9%, while the Jared brand saw an increase of 4.1%. Regional brands saw a 3.1% decline in same-store sales, however.

Signet expects same-store sales growth of between 3% and 4% in the first quarter.

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TheStreet Ratings team rates SIGNET JEWELERS LTD as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SIGNET JEWELERS LTD (SIG) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 7.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SIG's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SIG has a quick ratio of 1.52, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its closing price of one year ago, SIG's share price has jumped by 61.66%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SIG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SIGNET JEWELERS LTD' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SIGNET JEWELERS LTD increased its bottom line by earning $4.36 versus $3.72 in the prior year. This year, the market expects an improvement in earnings ($4.53 versus $4.36).
  • The change in net income from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income has decreased by 3.7% when compared to the same quarter one year ago, dropping from $34.90 million to $33.60 million.
  • You can view the full analysis from the report here: SIG Ratings Report

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