Signet lifts FY27 guidance after stronger quarter and tariff refunds

Signet Jewelers has raised its FY27 guidance after reporting stronger adjusted earnings and same-store sales in the second quarter. Yahoo Finance reported that same-store sales rose 2.2% year on year, while total sales declined 0.5% to US$1.528 billion.

Adjusted operating income increased to US$107.2 million from US$85.4 million a year earlier. Adjusted diluted earnings per share rose to US$2.19 from US$1.61, while the adjusted operating margin widened to 7% from 5.6%.

Gross margin increased 80 basis points to 39.4%, incorporating about US$15 million in tariff refunds as well as lower inventory and distribution expenses. Merchandise average unit retail rose 6%, with growth in both Fashion and Bridal.

Management increased its FY27 adjusted operating income outlook to US$535 million–US$605 million, from US$480 million–US$560 million previously. Adjusted diluted EPS guidance was raised to US$10.45–US$12.15, compared with the previous range of US$9.20–US$11. Signet attributed the revised outlook to tariff refunds, cost discipline, operating performance and potential benefits from its extended credit engagement with Bread Financial.

The company completed an US$87 million buyback covering 1 million common shares and plans a US$125 million accelerated share repurchase programme. The timing of the planned programme was not specified.

Cash generation remained a pressure point. Signet reported US$73.5 million in operating cash outflow during the first half, alongside negative free cash flow of US$138.4 million. Comparable Fashion sales fell 1%, primarily reflecting weaker Banter performance and softer demand for lower-priced metal products.