Signet Raises Full-Year Forecast as High-End Jewelry Sales Hold Strong

Quick Facts

Signet shares jumped roughly 20% after the company raised its full-year adjusted EPS guidance to a range of $10.45 to $12.15, up from $9.20 to $11.
Q2 adjusted operating income rose 25% to $107 million, with comparable sales growing in each month of the quarter.
A new credit partnership with Bread Financial is projected to generate over $1 billion in incremental revenue and operating income through 2035.

Signet Jewelers raised its full-year earnings outlook for the second time this fiscal year after reporting second-quarter results that beat Wall Street estimates by a wide margin. The owner of Kay, Zales, and Jared posted adjusted earnings of $2.19 per share for the 13 weeks ended August 1, against a consensus estimate of $1.69. A year earlier, the company earned $1.61 per share.

Total revenue came in at $1.53 billion, slightly below the $1.54 billion recorded in the same period last year. Same-store sales, which include both physical stores and e-commerce, rose 2.2%. The result marked the fifth positive comparable-sales quarter in the past six quarters.

Wealthier Shoppers Drive Growth

The clearest driver of Signet’s recovery is spending at higher price points. CEO J.K. Symancyk said the quarter reflected high-single-digit comparable-sales growth at price points above $2,000, with average unit retail rising 6%. Bridal, timepieces, and services all performed well. Fashion sales declined 1%.

Raymond James analyst Rick Patel called high-end performance the most important indicator of momentum. Products priced above $2,000 represent about 7% of units but account for 40% of revenue, Patel noted.

Items above $2,500 have remained resilient throughout the year, even as elevated grocery and gas costs pressure budgets for lower-income households. Symancyk said the company feels better positioned entering the holiday season than it did a year ago, citing refreshed websites, stronger marketing, and improved inventory discipline.

Gross Margin and Operating Leverage

Gross margin expanded 80 basis points to 39.4%. Tariff refunds, lower inventory costs, and reduced distribution expenses contributed to the improvement. Adjusted operating income of $107 million represented a 25% increase year-over-year, with 140 basis points of rate expansion. SG&A also declined from the prior year.

This marked the sixth consecutive quarter Signet exceeded EPS expectations.

The Bread Financial Credit Deal

One of the most significant announcements accompanying the earnings release was a renewed consumer credit partnership with Bread Financial’s Comenity Bank units, signed September 4, 2026. The agreement consolidates Signet’s credit programs into a single card running through December 31, 2035, with Bread as the exclusive issuer of open-ended credit products across major Signet brands in the U.S.

The deal includes a profit-sharing arrangement Signet estimates will generate over $1 billion in incremental non-comp revenue and operating income over the life of the agreement. CFO Joan Hilson said the company expects to receive approximately $80 million in cash during the third quarter tied to the signing. The partnership is projected to deliver $200 million to $250 million in operating benefit over the next 36 months, with profit-sharing ratios rising later in the term.

Signet also plans to extend Bread Financial credit to Blue Nile customers for the first time before the holiday season.

Updated Fiscal 2027 Guidance

Signet now projects full-year adjusted EPS of $10.45 to $12.15, a roughly 10% increase from its prior guidance range of $9.20 to $11. Full-year revenue is expected to land between $6.7 billion and $6.9 billion. Same-store sales guidance moved to flat to up 2.5%, compared to a previous range of down nearly 1% to up 2.5%.

For the third quarter ending in October, Signet guided revenue between $1.37 billion and $1.41 billion. Hilson attributed the raised annual outlook to operational execution, increased share repurchases, tariff reimbursements, and the terms of the new credit agreement.

Symancyk said the company’s track record of meeting its stated targets gave him confidence heading into the second half. The holiday season will test whether high-end demand remains durable as the broader consumer environment stays uneven.