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Signet (SIG) to Report Q1 Earnings: What's in the Offing?

Signet Jewelers Limited SIG is likely to register a decrease in the top line in its first-quarter fiscal 2024 results on Jun 8, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $1,632 million, indicating an 11.3% drop from the prior-year quarter’s reported figure.

The consensus estimate for quarterly earnings has been stable in the past 30 days at $1.44 per share, implying a 50% decrease from the prior-year fiscal quarter’s tally.

In the last reported quarter, Signet’s bottom line outperformed the consensus mark by 3.2%. This renowned jewelry and accessories retailer has a trailing four-quarter earnings surprise of 45.1%, on average.

Key Aspects to Note

Signet’s quarterly results are likely to have been hurt by a challenging operating landscape, including inflationary pressures. On its last earnings call, management had cited a certain shift in consumer discretionary spending from the jewelry category due to decelerating consumer confidence and pent-up demand for experience-oriented categories. SIG further anticipated the impacts of inflation and other macroeconomic factors to have weighed on consumer spending.

Management had earlier expected the jewelry industry to be pressured by macroeconomic headwinds and industry-specific bridal dynamics. Also, persistent headwinds in engagements are likely to have been deterrents. The company had predicted total sales in the band of $1.62-$1.65 billion and adjusted operating income in the range of $97-$108 million for the fiscal first quarter. Also, the first-quarter gross margin is expected to have been hurt by roughly 100 basis points of deleveraged rent expenses with a similar level of impact on selling, general and administrative expenses. The company’s digitally native banners, James Allen and Blue Nile are likely to be a margin headwind till the third quarter when there will be a major accretion from this business.

We note that Signet has been taking initiatives to mitigate the supply-chain challenges. SIG’s e-commerce efforts and the Inspiring Brilliance strategy appear encouraging. The Inspiring Brilliance growth strategy focuses on expanding big banners, boosting services, broadening the Accessible Luxury and Value segments, and accelerating digital commerce. SIG has been aiming to enhance the online shopping experience through in-store consultations and services like the buy online, pickup in-store and curbside options. These factors are likely to have provided some cushion to the quarterly performance.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Signet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as elaborated below. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

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Signet currently has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Stocks With Favorable Combination

Here are some companies, which according to our model, have the right combination of elements to beat on earnings:

Skechers SKX currently has an Earnings ESP of +4.95% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is likely to register a bottom-line decline when it reports second-quarter 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 51 cents suggests a decline of 12.1% from the year-ago quarter.

Skechers’ top line is expected to increase year over year. The consensus estimate for quarterly revenues is pegged at $1.89 billion, which indicates a rise of 1.4% from the figure reported in the prior-year quarter. SKX has a trailing four-quarter earnings surprise of 18.8%, on average.

Campbell Soup CPB presently has an Earnings ESP of +0.58% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for Campbell’s quarterly revenues is pegged at $2.22 billion, which suggests an increase of 4.2% from the figure reported in the prior-year quarter.

The consensus mark for CPB’s quarterly earnings has been unchanged in the past 30 days at 65 cents per share. The consensus estimate for the same suggests a 7.1% decline from the year-ago quarter’s reported number.

Carnival Corp. CCL currently has an Earnings ESP of +2.36% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for CCL’s quarterly revenues is pegged at $4.8 billion, which suggests a rise of 100% from the figure reported in the prior-year quarter.

The consensus mark for Carnival’s earnings has been unchanged in the past 30 days at 34 cents per share. The consensus estimate for the same indicates a decline from a loss of $1.64 per share reported in the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Carnival Corporation (CCL) : Free Stock Analysis Report

Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report

Campbell Soup Company (CPB) : Free Stock Analysis Report

Signet Jewelers Limited (SIG) : Free Stock Analysis Report

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