Signet Jewelers’ stocks drop 5% following disappointing guidance, reports Investing.com

Signet Jewelers’ stocks drop 5% following disappointing guidance, reports Investing.com

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HAMILTON, Bermuda – Signet Jewelers Limited (NYSE:), the world’s largest retailer of diamond jewelry, reported fourth-quarter earnings that beat analysts’ expectations, but issued a weaker-than-expected outlook for the first quarter and overall ‘fiscal year 2025, causing its shares to fall 5.47% in pre-market opening. .

For the fourth quarter, the company reported adjusted earnings per share (EPS) of $6.73, beating analysts’ estimate of $6.35. However, revenue was lower than expected at $2.5 billion, compared to the consensus estimate of $2.54 billion. The company’s turnover decreased by 6.3% compared to the same period last year, reflecting the challenges in the jewelry sector.

Looking ahead, Signet forecasts first-quarter fiscal 2025 revenue to be between $1.47 billion and $1.53 billion, which is below analyst consensus of $1.662 billion. dollars. For the full fiscal year 2025, the company forecasts adjusted EPS between $9.08 and $10.48, with revenue guidance of $6.66 billion to $7.02 billion, both below consensus estimates. of $10.47 in EPS and $7.15 billion in revenue.

Virginia C. Drosos, CEO of Signet, commented on the results: “Our team delivered on our expectations and navigated a challenging quarter and year for the industry. We are able to gain new customers through our marketing personalization and expansion of our service businesses. She also highlighted the company’s strategic initiatives and cost due diligence, which are expected to generate operating profit and cost savings of $150 million to $180 million this year.

The company plans to address the challenges with a $350 million cost-cutting initiative over the next three years and increased its share repurchase authorization to $850 million while increasing its joint dividend by 26%.

Signet’s financial health remains strong, with $1.4 billion of cash and cash equivalents and more than $600 million of free cash flow generated in fiscal 2024, excluding one-time legal settlements. Despite weaker forecasts, company executives expressed confidence in their flexible operating model and strategic growth initiatives going forward.

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