Back to top

Analyst Blog

Zacks Equity Research

Signet's EPS Beats, Rev Misses

SIG ZLC

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Signet Jewelers Limited (SIG - Snapshot Report) – a leading jewelry retailer – recently posted its fiscal third-quarter 2013 (ended October 27, 2012) financial results. The quarterly earnings of 43 cents a share surpassed the Zacks Consensus Estimate of 37 cents and reflected a 43.3% increase from 30 cents earned in the comparable quarter in the prior-year.

Quarterly Details

Total revenue for the quarter inched up 0.8% to $716.2 million from $710.5 million in the year-ago quarter, driven by a 1.4% increase in comparable store sales. However, total revenue missed the Zacks Consensus Estimate of $729.0 million. E-commerce sales witnessed year-over-year increase of 35.2% to $19.6 million from $14.5 million in the last-year quarter.

Region-wise, the U.S. division revenue was $575.6 million, reflecting a rise of 2.2% from $563.0 million in the prior-year quarter, mainly due to 1.2% hike in comps. UK division revenue witnessed a fall of 4.7% to $140.6 million from $147.5 million in the fiscal third-quarter of 2012. However, comps increased 2.3% for this division in the quarter.

Gross profit for the quarter climbed 2.4% to $235.4 million year over year from $229.9 million, whereas gross margin expanded 50 basis points to 32.9%. The improvement in gross margin was driven by an expansion of 70 basis points in the U.S. division, partially offset by a 30 basis points contraction in UK division.

Selling general and administrative expenses, as a percentage of revenue, increased 20 basis points to 31.1%, attributable to cost incurred to implement strategic initiatives as well as acquisition costs.

Increased gross margin along with increase in total revenue, led to a year-over-year surge of 23.5% to $52.5 million in operating income from $42.5 million in the year-ago quarter. Operating margin expanded 130 basis points to 7.3% from 6.0% in third quarter of 2012.

Other Financial Details

Signet Jewelers ended the quarter with cash and cash equivalents of $166.0 million, down from $349.6 million at the end of prior-year quarter. The fall was mainly due to dividend payments and share repurchases made during the year. Inventories at the end of the quarter rose 6.7% to $1,508.5 million from $1,414.0 million in the year-ago period.

Signet Jewelers does not have any long-term debt while shareholders’ equity as on October 27, 2012 came in at $2,150.1 million compared with $2,148.2 million as on October 29, 2011.

Guidance

For the fourth quarter of fiscal 2013, Signet Jewelers anticipates comparable-stores sales to increase in low-single-digit including the impact of one additional week, whereas earnings are expected to fall in the range of $1.95–$2.10 per share. Excluding the extra week, the company forecasts low-to-mid single digit rise in comps. Capital expenditure for the fiscal 2013 is expected to be between $155.0 million and $160.0 million.

Stores Update

At the end of the third quarter 2013, the company had 1,857 stores (including 1,337 stores in the U.S. and 520 stores in UK) compared with 1,860 stores (including 1,324 stores in US and 1,324 stores in US and 536 stores in UK) at the end of the prior-year quarter.

The company further plans to operate 1,952 stores including 1,445 stores in the U.S. and 507 stores in UK at the end of the fiscal 2013.

Zacks Rank

Signet Jewelers, which competes with Zale Corporation (ZLC - Snapshot Report), carries a Zacks #3 Rank, implying short-term Hold rating on the stock for the upcoming 1-3 months.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%