It has been about a month since the last earnings report for Signet (SIG Quick QuoteSIG - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Signet due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.

SIG Q2 Earnings Beat Estimates, FY'27 View Raised

Signet posted second-quarter fiscal 2027 results, with the bottom line surpassing the Zacks Consensus Estimate. The top line marginally missed the consensus mark and declined year over year. 

Signet continued progressing its Grow Brand Love strategy through merchandise refreshes, improved digital and in-store experiences, and updated marketing. Jared and Kay websites launched ahead of schedule, while Zales was expected later in September. Demand remained strongest above $2,000, while Timepieces and Bridal grew, partly offsetting weakness in Fashion.

More on Signet’s Q2 Results

SIG reported adjusted earnings of $2.19 per share for the second quarter of fiscal 2027, surpassing the Zacks Consensus Estimate of $1.69. The bottom line increased 36% from adjusted earnings of $1.61 in the year-ago quarter. On a GAAP basis, EPS was $1.33 against a loss of 22 cents a year ago.

This jewelry retailer generated sales of $1,528.1 million, slightly below the consensus estimate of $1,529 million. Sales declined 0.5% from $1,535.1 million in the prior-year quarter. Same-store sales grew 2.2%, marking the fifth positive quarter in the past six quarters, while average merchandise unit retail increased about 6%. The sales decline reflected lower non-same-store sales, including the transition of James Allen and Blue Nile out of the comparable-sales calculation beginning in the quarter.

Signet's Digital Shift Reflects James Allen Move

E-commerce sales declined 5.5% to $300 million and represented 19.6% of quarterly sales compared with 20.7% a year earlier. The company attributed the decline primarily to the decommissioning of the James Allen website, while brick-and-mortar same-store sales increased 2.3%.

Blue Nile reported sales of $83.6 million compared with $74.7 million a year ago, an 11.9% increase. James Allen sales fell to $7.1 million from $36.9 million as the brand transitioned to a proprietary collection within Blue Nile.

Insight Into SIG’s Margins & Expenses

Gross profit was $602.4 million, up 1.8% from $591.9 million in the year-ago quarter. The gross margin expanded 80 basis points to 39.4%. The improvement included approximately $15 million of refunds for tariffs previously paid, which was $13 million above management's expectation, as well as lower inventory and distribution costs. Higher gold costs provided a partial offset.

Adjusted gross profit was $601 million, up from $591.9 million a year earlier. The adjusted gross margin increased 70 basis points to 39.3%. Merchandise margin improved 20 basis points, reflecting core performance in line with expectations and the benefit from tariff refunds.

Selling, general and administrative expenses declined 2.3% year over year to $493.6 million from $505.3 million. As a percentage of sales, SG&A expenses improved 60 basis points to 32.3%, supported by operating-model changes, spending discipline and leverage from positive same-store sales.

Adjusted operating income increased 25.5% to $107.2 million from $85.4 million in the prior-year quarter. The adjusted operating margin expanded 140 basis points to 7%. Adjusted EBITDA rose 18.3% to $152.3 million from $128.7 million, with the adjusted EBITDA margin increasing to approximately 10% from 8.4%.

Update on Signet’s Segmental Performance

Sales in the North America segment increased 0.1% year over year to $1.43 billion in the second quarter of fiscal 2027. Same-store sales increased 1.9%. The segment’s adjusted operating income rose to $123 million from $103.8 million, while the adjusted operating margin expanded to 8.6% from 7.3%.

International segment sales totaled $96.6 million, increasing 5.2% year over year and 5.8% on a constant-currency basis. Same-store sales advanced 6%. The segment's adjusted operating loss narrowed to $1.4 million from $2.1 million in the prior-year quarter.

Update on SIG's Stores

As of Aug. 1, 2026, Signet operated 2,534 stores spanning 4 million square feet of selling space. The store base declined a net 48 locations from the end of fiscal 2026, while selling space decreased 1.1%. North America ended the quarter with 2,282 stores and the International segment operated 252 stores.

Signet’s Financial Snapshot: Cash, Debt & Equity Overview

SIG ended the fiscal second quarter with cash and cash equivalents of $526.8 million, up from $281.4 million in the year-ago period. Inventory was $1.96 billion, down 1% year over year despite higher gold costs. Shareholders' equity stood at $1.84 billion at the quarter-end.

For the first 26 weeks of fiscal 2027, net cash used in operating activities was $73.5 million compared with $89 million in the prior-year period. Capital expenditures were $64.9 million compared with $60.6 million a year ago. Free cash outflow narrowed to $138.4 million from $149.6 million. In the fiscal second quarter alone, Signet generated free cash flow of $30.8 million.

Capital Returns & Consumer Credit Agreement

Signet repurchased approximately 1 million common shares for $87 million during the quarter and an additional 0.4 million shares for about $33 million after the quarter-end. The company plans to initiate a $125-million accelerated share-repurchase program in September. The board expanded the remaining repurchase authorization by roughly $385 million to $700 million. After completing the planned program, approximately $575 million would remain available.

The board declared a quarterly cash dividend of 35 cents per share, payable on Nov. 20, 2026, to shareholders of record as of Oct. 23.

Signet also renewed its consumer credit partnership with Bread Financial through December 2035. The agreement includes quarterly profit sharing and a signing bonus, and management estimates that SIG will generate more than $1 billion of incremental non-comp revenues and operating income over its life. Signet expects an operating benefit of $200-$250 million during the next 36 months and $30-$40 million of non-comp revenues and gross margin benefit in fiscal 2027. The company expects to receive about $80 million of cash in the fiscal third quarter, which will be recognized ratably over the agreement's term. The arrangement does not include loss sharing.

SIG’s Fiscal Q3 Guidance

For the third quarter of fiscal 2027, Signet expects total sales of $1.37-$1.41 billion and same-store sales to range from a decline of 1% to growth of 2%. Adjusted operating income is projected between $31 million and $48 million, while adjusted EBITDA is expected in the band of $82-$100 million.

Fiscal third-quarter outlook includes an expected $7-$9 million benefit from refunds of tariffs previously paid and a $12-$16 million benefit from the new credit agreement beginning in September. Management expects modest SG&A deleverage, as 40-50% of the projected $17-$25 million increase in fiscal 2027 incentive compensation is expected in the quarter.

What to Expect From Signet in FY’27?

Signet maintained its fiscal 2027 sales outlook at $6.7-$6.9 billion while raising its same-store sales projection to flat to 2.5% growth from the prior range of a 0.75% decline to 2.5% growth. The company also raised adjusted operating income guidance to $535-$605 million from $480-$560 million, adjusted EBITDA to $730-$800 million from $665-$745 million, and adjusted EPS to $10.45-$12.15 from $9.20-$11.00.

The higher profit outlook reflects first-half performance, modestly improved expectations for the back half, the renewed credit agreement, tariff refunds and additional share repurchases. Management indicated that roughly two-thirds of the EPS increase came from the credit agreement, tariff refunds and buybacks, with the remaining one-third attributable to core performance.

The outlook also incorporates the James Allen transition, tariff refunds, consumer credit revenues, $150-$180 million of capital expenditures, a low-single-digit reduction in net square footage and a 23-25% adjusted tax rate.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

The consensus estimate has shifted 18.82% due to these changes.

VGM Scores

Currently, Signet has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a score of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Signet has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.