Shares of Signet Jewelers Limited (NYSE:SIG) rose 12.5% in early trading Thursday after the jewelry retailer reported fourth-quarter results that beat Wall Street expectations and issued a full-year outlook that brackets current estimates, even as it flagged margin pressure and a cautious consumer environment.
The company reported adjusted earnings of $6.25 per share for the fourth quarter ended late January, above analysts’ expectations, while revenue came in at $2.35 billion, roughly flat year over year. Same-store sales declined 0.7%.
Gross margin in the quarter narrowed to 42%, down 60 basis points from a year earlier, while adjusted operating margin also declined, reflecting cost pressures and promotional activity.
For the full fiscal year 2026, Signet reported revenue of $6.81 billion, up 1.6% from the prior year, with same-store sales rising 1.3%, indicating a gradual recovery in underlying demand. Adjusted earnings per share increased to $9.60 from $8.94, supported by higher pricing and improved product mix.
The company generated $525 million in free cash flow during the year and ended the period with $874.8 million in cash and approximately $2 billion in liquidity. Signet also returned capital to shareholders through $205 million in share buybacks and raised its quarterly dividend by about 10% to $0.35 per share.
Management pointed to strength in bridal and fashion jewelry categories and continued momentum across its core banners, including Kay, Zales and Jared, as average unit retail prices increased in the mid-single-digit percentage range.
However, the company highlighted ongoing headwinds from elevated gold prices, tariff-related cost pressures and cautious consumer spending, which weighed on quarterly margins and earnings.
Looking ahead, Signet forecast fiscal 2027 revenue between $6.6 billion and $6.9 billion, with same-store sales ranging from a decline of 1.25% to growth of 2.5%. Adjusted earnings per share are expected between $8.80 and $10.74.
The outlook reflects uncertainty around commodity costs, tariffs and the ongoing transition of its James Allen business, which management indicated could continue to pressure results in the near term.
Analysts at Jefferies noted that the guidance range broadly brackets consensus estimates, suggesting limited near-term visibility but leaving room for upside if sales momentum and pricing trends persist.