The jewelry retailer's sixth straight earnings beat drove its best trading session in more than a year. Part of the improvement won't repeat.
Signet Jewelers, the parent of Kay and Zales, reported adjusted earnings per share of $2.19 for its fiscal second quarter, well above the $1.74 consensus estimate, on revenue of $1.53 billion that was roughly in line with expectations. Same-store sales rose 2.2%, with every brand contributing positively. Gross margin expanded 80 basis points to 39.4%, aided by $15 million in tariff refunds, a detail disclosed alongside the results rather than buried in it.
Management raised full-year guidance meaningfully: adjusted earnings per share to a range of $10.45 to $12.15, up from $9.20 to $11.00 previously, and adjusted operating income to $535 million to $605 million. Full-year sales guidance was maintained at $6.7 billion to $6.9 billion, while the same-store sales outlook was narrowed to flat-to-2.5% growth for the year. The company also announced a $125 million accelerated share repurchase and expanded its total buyback authorization by $385 million. It was Signet's sixth consecutive quarterly earnings beat.
Shares rallied sharply, in what one financial-media account described as the stock's best single trading session in more than a year; the exact percentage move is disputed across sources and is not restated here as a specific figure.
The refund detail matters because it separates two different stories investors could tell about the same quarter. One is that Signet's core business, same-store sales growth across every brand plus a guidance raise, is genuinely improving. The other is that part of the margin expansion investors are rewarding today is a one-time item that won't recur next quarter. Both can be true at once, and the guidance raise suggests management itself isn't relying on the refund to hit its new targets. But the gross margin line, taken at face value without that adjustment, overstates the quarter's structural improvement.
Tapestry, the parent of Coach and Kate Spade, reported its own fiscal 2027 guidance the same day and traded flat, a reaction one outlet characterized as durable but unexciting. The contrast between a same-sector name that moved sharply and one that didn't, on the same day, underscores how much of Thursday's Signet reaction was earnings-specific rather than sector-wide.