SIG Beats Q3 Earnings & Revenue Estimates, Raises FY26 Outlook

Signet Jewelers Limited SIG has posted impressive third-quarter fiscal 2026 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Additionally, sales and earnings increased year over year. Same-store sales grew 3% from the year-ago period. Driven by the fiscal third-quarter results, Signet has raised its fiscal 2026 outlook.

More on Signet’s Q3 Results

SIG reported adjusted earnings of 63 cents per share, surpassing the Zacks Consensus Estimate of 16 cents. Also, the bottom line skyrocketed 162.5% from adjusted earnings of 24 cents in the year-ago period. The improvement in adjusted earnings was driven by higher adjusted operating income and a lower diluted share count, though partially tempered by a higher effective tax rate.

This jewelry retailer generated total sales of $1,391.8 million, beating the consensus estimate of $1,369 million. Also, the top line increased 3.1% year over year. The metric increased 3% at constant currency. Merchandise average unit retail (“AUR”) rose approximately 7% year over year, driven by a 6% increase in Bridal and an 8% rise in Fashion.

Insight Into SIG’s Margins & Expenses

Signet Jewelers Limited Price, Consensus and EPS Surprise

 

Signet Jewelers Limited price-consensus-eps-surprise-chart | Signet Jewelers Limited Quote

The gross profit in the fiscal third quarter amounted to $518.8 million, up 6.9% from $485.3 million in the year-ago quarter. The gross margin increased 130 basis points (bps) year over year to 37.3% in the quarter under review, supported by a higher gross merchandise margin, growth in services and better leverage of fixed costs.

Selling, general and administrative (SG&A) expenses were $485.3 million, up 3.3% from $469.6 million in the prior-year quarter. Meanwhile, SG&A expenses, as a percentage of sales, were 34.9%, reflecting a 10-bps year-over-year increase due to higher incentive compensation.

SIG has reported adjusted operating income of $32 million, up 97.5% from $16.2 million in the year-ago quarter. The adjusted operating margin increased 110 bps to 2.3%.

Adjusted EBITDA amounted to $75.6 million, up 40.3% from $53.9 million in the year-ago quarter. The adjusted EBITDA margin increased 140 basis points (bps) year over year to 5.4% in the quarter under review.

Update on Signet’s Segmental Performance

Sales in the North American segment increased 3% year over year to $1.30 billion, which beat the Zacks Consensus Estimate of $1.28 billion. Same-store sales increased 3% year over year.

Sales in the International segment increased 4.4% year over year to $87 million, slightly lagging the consensus estimate of $88 million. Same-store sales increased 3.6% year over year. Sales increased 1.6% on a constant-currency basis.

Update on SIG's Stores

As of Nov. 1, 2025, the North American segment had 2,353 stores, a decrease from 2,379 in February 2025 due to 11 openings and 37 closures. The International segment had 254 stores, down from 263 after nine closures and no openings. Overall, Signet had 2,607 stores, down from 2,642, following 11 openings and 46 closures.

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

SIG ended the fiscal third quarter with cash and cash equivalents of $234.7 million, and inventories of $2.11 billion. Total shareholders’ equity was $1.72 billion at the end of the fiscal third quarter.

As of Nov. 1, 2025, net cash used was $58 million in operating activities.

In the fiscal third quarter, Signet repurchased approximately 301 thousand common shares for $28 million. In the past nine months, the company repurchased 2.8 million shares for $178 million. The company has approximately $545 million remaining under the current share repurchase authorization.

Signet declared a quarterly dividend of 32 cents per share, payable Feb. 20, 2026, to shareholders of record as of Jan. 23, 2026.

SIG’s Q4 Guidance

For the fourth quarter of fiscal 2026, the company expects total sales between $2.24 billion and $2.37 billion, with same-store sales expected between a decline of 5% and an increase of 0.5%.

Adjusted operating income is forecast to be $277-$327 million, and adjusted EBITDA is expected to be $324-$374 million.

What to Expect From Signet in FY26?

Signet has updated its fiscal 2026 guidance. Total sales are expected to be $6.70-$6.83 billion compared with the previously stated $6.67-$6.82 billion. Same store sales are expected between down 0.2% and up 1.75% versus the prior mentioned down 0.75% to up 1.75%.

Adjusted operating income is anticipated between $465 million and $515 million, compared with the earlier stated $445-$515 million. Adjusted EBITDA is forecast at $650-$700 million versus the previously mentioned $630-$700 million. Adjusted EPS is expected between $8.43 and $9.59, compared with the previously stated $8.04-$9.57. 

The company’s fiscal 2026 guidance assumes a cautious consumer environment in the fourth quarter, includes tariff impacts on holiday receipts, and incorporates planned capital expenditure of approximately $145-$160 million. It also assumes a net decrease in square footage of about 1% for the year and an annual tax rate between 23% and 25%.

This Zacks Rank #3 (Hold) company’s shares have gained 7.9% in the past three months compared with the industry’s 9.6% growth.

Stocks to Consider

We have highlighted three better-ranked stocks, namely, FIGS Inc. FIGS, Boot Barn Holdings, Inc. BOOT and American Eagle Outfitters Inc. AEO.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales indicates growth of 400% and 7%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank of 2 (Buy). 

The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.

American Eagle is a specialty retailer of casual apparel, accessories and footwear. It carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales indicates declines of 35.1% and 0.1%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 30.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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