Signet Jewelers (SIG) Lifts Guidance on Tariff Refunds and Cost Discipline

Signet Jewelers (SIG) has revised its financial guidance following strong performance in the second quarter of fiscal year 27 (FY27). The company reported a 2.2% year-over-year increase in same store sales, with total sales down slightly to $1.528 billion. Adjusted operating income reached $107.2 million, up from $85.4 million in the same period last year, leading to an adjusted diluted earnings per share (EPS) of $2.19, compared to $1.61 previously.

This surge in earnings has prompted management to raise its full-year guidance for adjusted EPS by more than 10%, to between $10.45 and $12.15. The increase is driven by tariff refunds, cost discipline, and strong merchandise AUR growth in the Fashion and Bridal categories. Management also announced a $125 million accelerated share repurchase program and an effective push towards refreshed merchandise and improved customer experiences.

Despite some weakness in total reported sales and comparable Fashion sales, Signet's gross margin expanded by 80 basis points, attributed to $15 million in tariff refunds. However, cash flow concerns persist, with higher capital expenditures leading to a drop in free cash flow to $30.8 million for the quarter. Institutional interest in SIG remains slightly diminished, with hedge fund ownership declining from 32 funds to 29.