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What Led Shares of SIG & FIVE Surge More Than 20% in a Month?

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The retail landscape has been undergoing a fundamental change with technology playing a major role. Retailers are fast adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in-stores. Notably, the Retail-Wholesale sector, which is at the top 44% position in the list of Zacks sectors (7 out of 16), has advanced roughly 6% in the past three months outpacing the S&P 500’s growth of around 2%.

Let’s look at two stocks from the Retail-Wholesale sector which gained more than 20% in the past month.

Signet Rallies Nearly 27% on Growth Initiatives

Shares of Signet Jewelers Limited (SIG - Free Report) have not only outperformed the industry but also the overall sector. We note that the stock has gained 26.9% in the past month compared with the industry’s rise of 1.7% and the sector’s decline of 2%.


This Zacks Rank #3 (Hold) company is ramping up its digital marketing efforts. Further, the acquisition of R2Net, which owns popular online jewelry retailers — and Segoma Imaging Technologies — combined Signet’s retail jewelry business with R2Net’s solid digital operations. This move is in sync with Signet’s omni-channel transformation.

The Hamilton, Bermuda-based company is not only focusing on achieving double-digit growth in e-commerce but is also striving to take e-commerce sales to 15% of total sales in fiscal 2021, up from 8% in fiscal 2018. Further, the company is trying to make online shopping simpler for customers. Notably, the company has expressed plans to make it easy for customers to sign into Kay, Zales and Jared websites by using Google and Facebook credentials.

In an effort to drive growth in the long run, Signet announced strategic initiatives under the ‘Signet Path to Brilliance’ plan, which will continue for the next three years. Notably, the company’s three-year strategic initiatives aim to attain cost effectiveness. A portion of this cost savings will be used to invest in growth initiatives, which include e-commerce development, omni-channel capabilities and product innovation.

Five Below’s Impressive Comps Boost Investor Confidence

A glimpse at Five Below, Inc.’s (FIVE - Free Report) share price movement reveals a rough 24.6% rise in the past month as against the industry’s decline of 0.8%.

The Zacks Rank #2 (Buy) company has been witnessing positive comparable store sales (comps) growth for six straight quarters. Evidently, comps rose 1% in fourth-quarter fiscal 2016 and 2.6%, 9.3%, 8.5% and 5.9% in the first, second, third and fourth quarters of fiscal 2017. Comparable sales increased 3.2% in the first quarter of fiscal 2018 and were within the company’s previously-provided guidance of 3-4%. Five Below now envisions fiscal 2018 comparable sales growth of 1-2%.

Further, Five Below’s primary focus on teens and pre-teens helps the company enhance customer base by attracting shoppers. Also, the company is known for its impressive range of merchandise and is committed toward making innovation and refreshing its product range in line with evolving consumer trends.

Apart from these, the company is committed toward expanding its store base as well as enhancing in-store experience. Five Below launched 103 new stores in fiscal 2017. The company plans to open 125 stores in fiscal 2018, with 50% expected to be launched in the first half. Also, it is focused on expanding store base and targets to set up a network of more than 2,500 stores by 2020.

Check These Hot Picks

Urban Outfitters (URBN - Free Report) delivered an average positive earnings surprise of 19.8% in the trailing four quarters. It has a long-term earnings growth rate of 12% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shoe Carnival (SCVL - Free Report) delivered an average positive earnings surprise of 21.3% in the last four quarters. It has a long-term earnings growth rate of 12% and a Zacks Rank #1.

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