Signet Jewelers Stock Dips To One Year-Low After Updated Guidance: Retail Stays Cautious

Shares of Signet Jewelers Ltd ($SIG), plummeted nearly 22% on Tuesday to a year-low following following lowered sales outlook for fourth-quarter from the company, with retail sentiment staying cautious.

In a statement, the company said its holiday same store sales fell by 2% from a year ago.

"Fashion gifting underperformed as consumers gravitated to lower price points even more than anticipated in a continued competitive environment,” said Joan Hilson, Signet’s CFO and COO, said, adding merchandise assortment gaps at key gifting price points impeded our ability to meet that trend.” 

Signet expects Q4  comparable sales growth to decline between 2% to 2.5%, compared to its earlier projection of flat to 3% growth. Total sales are expected to be $2.32 billion to $2.34 billion, compared with its earlier projection of $2.38 billion to $2.46 billion.

Retail sentiment stayed ‘neutral’ over the past day. Message volumes rose to ‘extremely high’ from ‘high.’

SIG sentiment meter and message volume on Jan 14 as of 4:20 am ET

BofA analyst Lorraine Hutchinson lowered the price target on Signet to $65 from $95 with a ‘Neutral’ rating after the company reported weaker-than-expected holiday results and cut Q4 guidance "across the board," Fly.com reported.

According to the report, the firm cut its price target on lower estimates and a more challenges sales outlook, adding that it believes the valuation reflects appropriate caution on the sales and margin trajectory.

Signet operates about 2,700 stores primarily under the name brands of Kay Jewelers, Zales, Jared, Banter by Piercing Pagoda, Diamonds Direct, Blue Nile, among others.

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