Executive Summary
Signet Jewelers reported a solid start to fiscal 2026 (QQ1) with revenue of $1.5416 billion and a GAAP net income of $33.5 million, translating to diluted EPS of $0.78. The quarter featured meaningful progress on the Grow Brand Love strategy, highlighted by strong momentum in the three largest brands (Kay, Zales, Jared) and a 2.5% same-store sales (SSS) growth driven by balanced category expansion, including an 8% merchandise AUR uplift and a notable 60% increase in LGD fashion within the fashion category. Management framed the quarter as the early innings of a multi-year growth trajectory, with Brand Marketing realigned under a centralized function and a reorganization largely complete, supporting more efficient decision-making and accountability. Adjusted operating income of $70 million and adjusted EPS of $1.18 exceeded expectations, reflecting improved margin discipline and cost actions from the reorganization, despite a higher tax rate and non-operating investments. Signet also reported inventory at $2.0 billion and a cash balance of $264 million, with total liquidity around $1.4 billion, and a continued program of share repurchases (approximately 2.3 million shares year-to-date). The company reiterates its full-year guidance, which embeds tariff-related cost management, ongoing gross margin expansion, and a multi-quarter path to deleveraging cash flow. Near-term risks include tariff volatility, volatility in the lab-grown diamond (LGD) and natural diamond mix, and the performance of James Allen. Overall, Signet’s path rests on advancing the Grow Brand Love initiative, expanding fashion via LGD, optimizing real estate, and sustaining disciplined promotional and inventory management to capture higher AUR and category margins.
Key Performance Indicators
QoQ: -68.48% | YoY:-3.41%
QoQ: -66.70% | YoY:-35.70%
QoQ: -65.35% | YoY:187.78%
Key Insights
Revenue: $1.5416B; YoY +2.04%, QoQ -34.47% (per provided metrics). Gross Profit: $598.8M; YoY +4.61%, QoQ -40.22%; Gross Margin: 38.84% (0.3884). Operating Income: $48.1M; YoY -3.41%, QoQ -68.48%; EBITDA: $107.3M. Net Income: $33.5M; YoY -35.70%, QoQ -66.70%. EPS (GAAP): $0.79; Diluted EPS: $0.78; Weighted Avg Shs Out: 42.5M; Weighted Avg Shs Out Diluted: 42.7M. Inventory: $2.00065B; Cash & Equivalents: $264.1M; Total Debt: $1.1814B; Net Debt: $0.9173B. Free Cash Flow: -$211.9M; Operating Ca...
Financial Highlights
Revenue: $1.5416B; YoY +2.04%, QoQ -34.47% (per provided metrics). Gross Profit: $598.8M; YoY +4.61%, QoQ -40.22%; Gross Margin: 38.84% (0.3884). Operating Income: $48.1M; YoY -3.41%, QoQ -68.48%; EBITDA: $107.3M. Net Income: $33.5M; YoY -35.70%, QoQ -66.70%. EPS (GAAP): $0.79; Diluted EPS: $0.78; Weighted Avg Shs Out: 42.5M; Weighted Avg Shs Out Diluted: 42.7M. Inventory: $2.00065B; Cash & Equivalents: $264.1M; Total Debt: $1.1814B; Net Debt: $0.9173B. Free Cash Flow: -$211.9M; Operating Cash Flow: -$175.3M; Capex: -$36.6M. Cash at End of Period: $264.1M; Total Liquidity: ~$1.4B. Share Repurchases (YTD): ~2.3M shares; Amount: ~$117.4M; Dividends Paid: $12.6M. Guidanced metrics: 2Q Revenue $1.47–$1.51B; 2Q SSS range: -1.5% to +1%; 2Q GM flat to up modest; 2Q Adj OI: $53–$73M. Full-year 2026 Revenue target: $6.57–$6.80B; Full-year SSS: -2% to +1.5%; GM expansion expected; SG&A as % of sales slightly higher; One-time reorganization costs: $3.045B (to be largely excluded from adjusted results). Adjusted EPS guidance: up ~4% at the midpoint to $7.70–$9.38.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.54B |
2.04% |
-34.47% |
| Gross Profit |
598.80M |
4.61% |
-40.22% |
| Operating Income |
48.10M |
-3.41% |
-68.48% |
| Net Income |
33.50M |
-35.70% |
-66.70% |
| EPS |
0.79 |
187.78% |
-65.35% |
Management Commentary
Theme: Strategy and growth - Grow Brand Love is in early innings but delivering early wins; three-brand focus (Kay, Zales, Jared) with go-to-market differentiation and reduced promotional discounting at Jared (discounting down >20% vs. prior year). Theme: Operations and execution - 2.5% SSS in QQ1 with positive contributions across fashion and bridal; AUR up ~8%, fashion up ~10%, LGD fashion growth 60% QoQ; improved gross margins (100 bps expansion) driven by promotional discipline and fixed-cost leverage; inventory management preserved flexibility ahead of tariffs. Theme: Real estate and digital transformation - ongoing store rationalization (14 stores closed, ~40 renovated this quarter; target of 150 under new doors in two years; digital channels strengthening with e-commerce growth; James Allen under pressure; Blue Nile positive. Theme: Tariffs and sourcing - management emphasizes agility and a diversified origin mix (India ~50% of imports; China in the high single digits) and plans to reallocate production if needed; actions include vendor negotiations, value engineering, and lifecycle promotions to protect price points. quotes: (1) JK Symancyk: “Grow Brand Love strategy is in the early innings of delivering long-term sustainable growth” (2) Joan Hilson: “We delivered a rate expansion of 100 basis points to last year… adjusted operating income exceeded expectations at $70 million for the quarter.”
Grow Brand Love strategy is in the early innings of delivering long-term sustainable growth by better aligning our brands to their unique customer expectations as well as balancing assortment architecture in both bridal and fashion.
— J.K. Symancyk
We delivered a rate expansion of 100 basis points to last year. This reflects our refined promotional strategy, inventory management, and leverage on fixed costs such as occupancy.
— Joan Hilson
Forward Guidance
Management maintains a constructive outlook with a measured consumer environment. 2Q revenue guidance of $1.47–$1.51B and SSS of -1.5% to +1% imply continued sequential improvement and a two-year stack progression into the back half. Gross margin expected to be flat to up modestly in 2Q with ongoing merchandise margin expansion and SG&A deleverage. For the full year, Signet projects revenue of $6.57–$6.80B and SSS of -2% to +1.5%, with GM expansion more than offsetting tariff headwinds and a slightly higher SG&A ratio due to organizational reorganization and normal inflation. One-time reorganization costs of $3.045B are expected largely in H1 and largely excluded from adjusted results. Adjusted EPS is guided to rise about 4% at the midpoint to $7.70–$9.38. Capex is guided at $145–$160M. The company asserts tariff risk is manageable through vendor negotiations, product design/assortment shifts, origin sourcing, and lifecycle management. Investors should monitor: (1) tariff developments and the pass-through ability via pricing/assortment, (2) LGD penetration vs. natural diamonds and its impact on AUR and margins, (3) progress on Grow Brand Love execution, (4) real estate transformation progress and its effect on store productivity, and (5) liquidity and cash flow dynamics given negative near-term OCF and ongoing buybacks.