Lab-grown diamonds costing less than $1,000 are hot, says Kay and Zales stores' parent

By Tomi Kilgore

Signet's same-store sales sees growth for a second straight quarter, after nearly three years of declines, and the stock is rising

Signet's stock surges as same-store sales show another quarter of growth, and beat expectations.

Shares of Signet Jewelers Ltd. rallied Tuesday, after the parent of the Kay, Zales and Jared jewelry chains confirmed its rebound with another quarter of sales growth.

The jewelry retailer also beat earnings expectations and raised its full-year outlook, amid a "measured" consumer environment.

The stock (SIG) rose 1.5% in midday trading, to buck the selloff in the broader stock market. It has now soared 92.4% since it closed at a three-year low on March 13, while the SPDR S&P Retail ETF XRT has rallied 25.8% and the S&P 500 index SPX has advanced 15.4% over the same time.

For the second fiscal quarter ending Aug. 2, same-store sales, or sales at stores open at least a year, rose 2% from a year earlier, to beat the average analyst estimate compiled by FactSet for growth of 0.8%.

That follows a 2.5% rise in same-store sales in the previous quarter, which snapped an 11-quarter streak of declines. It also marked the third straight quarter of beating expectations, which hasn't been done since March 2022, according to FactSet data.

For the full fiscal year, the company raised its guidance range for same-store sales growth to down 0.75% to up 1.75%, compared with previous guidance of a 2% decline to a 1.5% rise.

Chief Executive J.K. Symancyk said what's helping boost sales and the outlook, especially ahead of the holiday season, is having the right products at the right price points.

For example, Symancyk said he expects the number of lab-grown diamond fashion pieces at prices below $1,000 it has on hand to be at least triple what it was last year, with even higher growth at prices below $500. He said Signet has put a particular focus on LGDs in the $250 to $500 price range.

"We see our customer willing to spend as long as the assortment is compelling and delivers on their expectations of value," Symancyk said, according to a FactSet transcript of the post-earnings call with analysts.

He said LGDs have a 14% penetration rate in fashion, and that's double what it was last year, as pricing has stabilized.

Signet also reported total fiscal second-quarter sales that rose 3% from a year ago to $1.54 billion, above the FactSet consensus of $1.5 billion.

The net loss for the latest quarter narrowed to $9.1 million from $101.5 million a year ago. Meanwhile, adjusted earnings per share, which excludes nonrecurring items such as the write-down of the value of assets, rose to $1.61 from $1.25 to top the FactSet EPS consensus of $1.24.

Looking ahead, the company raised its full-year guidance ranges for adjusted EPS to $8.04 to $9.57 from $7.70 to $9.38 and for total sales to $6.67 billion to $6.82 billion from $6.57 billion to $6.8 billion.

-Tomi Kilgore

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09-02-25 1240ET