Executive Summary
Signet Jewelers’ QQ2 2026 results reflect continued momentum from the Grow Brand Love strategy, with the three largest banners (Kay, Zales, Jared) delivering a combined ~5% comp in back-to-back quarters and fashion driving a 2% overall comp. Revenue reached $1.535 billion, with a GAAP net loss of $9.1 million in the quarter and an adjusted EPS of $1.61, up 29% year over year, highlighting the divergence between adjusted operating performance and GAAP profitability. The company’s ongoing mix shift toward fashion, the acceleration of LGD (lab-grown diamonds) into fashion (14% penetration), and services growth supported margin expansion (gross margin up ~60 bps) and SG&A leverage, despite a challenging tariff backdrop and higher gold costs. Management underscored a disciplined approach to pricing, assortment resets, and a more fulsome marketing/omnichannel investment designed to drive holiday performance. The Q3 and full-year guidance reflects an intent to navigate tariff dynamics (India at ~50% and an incremental Russian tariff) while expanding gross margin through merchandising discipline and selective promotional reductions. The outlook hinges on tariff developments, on-sourcing benefits, and continued execution of the brand modernization, with holiday readiness and real estate investments front and center.
Key Performance Indicators
QoQ: -94.18% | YoY:102.78%
QoQ: -127.16% | YoY:90.76%
QoQ: -127.85% | YoY:90.35%
Key Insights
Revenue: $1.5351B in QQ2 2026, up 2.96% YoY and -0.42% QoQ. Gross profit: $591.9M, gross margin 38.56% (YoY +4.52%; QoQ -1.15%). Operating income: $2.8M (YoY +102.78%; QoQ -94.18%). Net income: -$9.1M (YoY +90.76%; QoQ -127.16%). EPS (GAAP): -$0.22; Adjusted EPS: $1.61 (up 29% YoY). Inventory: ~$1.986B; Cash & equivalents: $281.4M; Total liquidity: >$1.4B. Free cash flow: $60.0M+ for the quarter. Net cash provided by operating activities: $86.3M. Debt: Total debt $1.1777B; Net debt $896.3...
Financial Highlights
Revenue: $1.5351B in QQ2 2026, up 2.96% YoY and -0.42% QoQ. Gross profit: $591.9M, gross margin 38.56% (YoY +4.52%; QoQ -1.15%). Operating income: $2.8M (YoY +102.78%; QoQ -94.18%). Net income: -$9.1M (YoY +90.76%; QoQ -127.16%). EPS (GAAP): -$0.22; Adjusted EPS: $1.61 (up 29% YoY). Inventory: ~$1.986B; Cash & equivalents: $281.4M; Total liquidity: >$1.4B. Free cash flow: $60.0M+ for the quarter. Net cash provided by operating activities: $86.3M. Debt: Total debt $1.1777B; Net debt $896.3M. Share repurchases: $32.0M in the quarter; YTD repurchases ~$150M; Remaining share buyback authorization ~+$570M. Capex: $24.0M; Guidance implies full-year capex of $145-160M driven by real estate. E-commerce/digital: Blue Nile positive comp in July; James Allen impact modest; LGD penetration ~14% of fashion sales.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.54B |
2.96% |
-0.42% |
| Gross Profit |
591.90M |
4.52% |
-1.15% |
| Operating Income |
2.80M |
102.78% |
-94.18% |
| Net Income |
-9.10M |
90.76% |
-127.16% |
| EPS |
-0.22 |
90.35% |
-127.85% |
Management Commentary
Key management themes from the earnings call include continued strong brand momentum and a disciplined approach to pricing, promotions, and assortment changes. Highlights by theme: Strategy and growth—“Our grow brand love strategy” is delivering results; eight consecutive months of positive comps through August, with Kay, Zales, and Jared driving a ~5% combined comp. Operations and product—LGD fashion penetration reached ~14%, with AUR up across fashion (+12%) and bridal (+4%), driven by product mix and on-trend assortment (Unspoken, Shy Creation); Marketing—full-funnel, with social media representing >25% of marketing spend and Love Highway campaign in Jared delivering substantial reach (2B+ impressions). Tariffs and supply chain—management is actively navigating tariff risk (India ~50% tariff, Russian penalties) and is using inventories, onshoring, and country-of-origin optimization to mitigate impact. Holiday readiness—management is “well-positioned” for the back half, with emphasis on $200–$500 LGD fashion pieces and broader LGD fashion penetration across price points. Digital brands—Blue Nile improving in July and fashion revenue up 25% in Q2; James Allen impact moderated to 60–90 bps for the balance of the year. Quotes from leadership reinforce confidence in holiday performance and ongoing brand modernization.
"We delivered another quarter of positive same-store sales and earnings ahead of our expectations. And including August, we've delivered eight consecutive months of positive comps."
— J.K. Symancyk
"Revenue for the quarter was over $1.5 billion with comp growth of 2%, led by growth in fashion and services."
— Joan Hilson
Forward Guidance
Near-term expectations call for continued momentum but with an eye toward a measured consumer environment. Q3 guidance: total sales $1.34–$1.38B; same-store sales (SSS) -1.25% to +1.25%; gross margin rate up modestly; SG&A deleveraged due to incentive-compensation resets; adjusted operating income $3–$17M. Full-year guidance lifted to approximately $6.67–$6.82B in sales with SSS of -0.75% to +1.75%, adjusted operating income $445–$515M, and adjusted EPS $8.04–$9.57. Tariff risk remains a material variable: India tariffs elevated to around 50% and a Russian penalty (incremental 25% on top of existing tariffs) introduces potential downside risk to the high end of guidance; removal of penalties could push results toward the upper end. Mitigants include accelerating onshored production, optimizing country of origin, pricing and promotion adjustments, and refining the promotional strategy across brands. Investors should monitor tariff developments, LGD fashion uptake and price points in the $200–$500 range, brand-level marketing efficiency, and real estate-driven capital allocation. Management signals comfort with holiday execution and the ability to navigate ongoing tariff dynamics while maintaining a conservative stance on the lower end of the guide in the near term.