Signet Jewelers Limited (NYSE: SIG) raised its full-year Fiscal 2027 adjusted diluted earnings per share (EPS) guidance to $10.45–$12.12, up from the previous range of $9.20–$11.00. The company also affirmed its total sales guidance of $6.7 billion to $6.9 billion.

The upward revision in profitability guidance follows a second quarter where the company reported adjusted diluted EPS of $2.19, beating analyst estimates of $1.74 by 25.86%. This result represents a 36% increase from $1.61 in the same period last year.

Financial Performance

Quarterly sales totaled $1.528 billion, missing the analyst consensus estimate of $1.530 billion by 0.10%. Reported sales were down slightly from $1.54 billion in Q2 FY26. Same-store sales (SSS) grew 2.2% year-over-year, reflecting positive comp performance across all fine jewelry brands.

Merchandise average unit retail (AUR) increased approximately 6%, driven by high single-digit unit growth at higher price points in both Bridal and Fashion categories. Management cited strong operating performance, additional share repurchases, and refunds of previously paid tariffs for the upward revision in guidance.

GAAP operating income surged to $87.5 million from $2.8 million in the prior year period. This improvement was primarily due to lower asset impairment charges ($19.5 million vs $80.2 million) and better gross margins. Gross margin expanded 80 basis points to 39.4% of sales, aided by approximately $15 million in tariff refunds—$13 million higher than expected—and lower inventory costs, partially offset by higher gold prices.

What the Numbers Show

The divergence between GAAP and adjusted metrics highlights the impact of non-recurring items on reported profitability. While GAAP operating margin expanded significantly from 0.2% to 5.7%, this was largely driven by a reduction in asset impairments rather than operational leverage alone. Adjusted operating income rose 25.5% to $107.2 million, demonstrating underlying operational strength with SG&A leverage of 60 basis points (down to 32.3% of sales from 32.9%). Furthermore, the company’s cash position strengthened to $526.8 million from $281.4 million year-over-year, providing ample liquidity for the newly authorized share repurchases.

Guidance and Capital Allocation

Signet raised its full-year Fiscal 2027 guidance ranges:

• Total Sales: Maintained at $6.7 to $6.9 billion.
• Same-Store Sales: Raised from (0.75%) to 2.5% to Flat to 2.5%.
• Adjusted Operating Income: Increased from $480–$560 million to $535–$605 million.
• Adjusted Diluted EPS: Raised from $9.20–$11.00 to $10.45–$12.12.

For the third quarter, Signet expects sales of $1.37 billion to $1.41 billion versus the $1.393 billion estimate. It expects same-store sales to range from a 1% decline to 2% growth.

The Board expanded the remaining share repurchase authorization by approximately $385 million to a total of $700 million. Following the anticipated $125 million ASR, approximately $575 million in authorization will remain. Additionally, Signet declared a quarterly cash dividend of $0.35 per share for the third quarter of Fiscal 2027.

Strategic Developments

In early September, Signet renewed its consumer credit agreement with Bread Financial through December 2035. The extended partnership includes a profit-sharing agreement and signing bonus, expected to deliver further margin expansion over time. The deal aims to enhance technological advancements, data-driven marketing, and customer experience across most Signet brands.

Joan Hilson, Chief Operating and Financial Officer, said, “We delivered operating margin expansion this quarter reflecting comp growth and spend discipline. In early September, we proactively renewed our consumer credit agreement which is expected to deliver further margin expansion over time and provide meaningful enhancements to the customer experience.”

The company continues to optimize its real estate portfolio, closing 53 stores while opening 5 during the quarter. As of August 1, 2026, Signet operated 2,534 stores totaling 4.0 million square feet of selling space.

Analyst Reaction

Despite the positive earnings surprise, Signet shares fell 5.4% to trade at $96.94 on Thursday. However, several analysts raised their price targets following the announcement:

• B of A Securities analyst Lorraine Hutchinson maintained the stock with a Neutral rating and raised the price target from $102 to $115.
• UBS analyst Mauricio Serna maintained the stock with a Buy rating and raised the price target from $122 to $136.

Signet Jewelers (NYSE: SIG) issued third-quarter sales guidance of $1.370 billion to $1.410 billion, a range that brackets the $1.393 billion analyst consensus estimate.

The midpoint of the company’s projected revenue range sits slightly below market expectations, indicating cautious outlooks for the period.

Guidance Details

What the Numbers Show

The guidance range spans $40 million, with the lower bound falling $23 million short of the estimate and the upper bound exceeding it by $17 million. This symmetry around the consensus figure suggests uncertainty in near-term demand drivers rather than a definitive directional shift.