Signet raises fiscal 2027 profit outlook on credit deal and tariff refunds

Signet Jewelers Limited raised its full-year fiscal 2027 adjusted earnings per share guidance to a range of $10.45 to $12.15, up from the previous estimate of $9.20 to $11.00. The company attributed the increase to a renewed consumer credit agreement, tariff refunds, and share repurchases, with management indicating that roughly two-thirds of the EPS improvement came from these factors. This guidance update followed the release of second-quarter fiscal 2027 results, where adjusted earnings of $2.19 per share surpassed the Zacks Consensus Estimate of $1.69.

The jewelry retailer reported sales of $1,528.1 million for the quarter, a 0.5% decline from the prior-year period but slightly below the consensus estimate. Same-store sales grew 2.2%, marking the fifth positive quarter in the last six, while average merchandise unit retail increased by approximately 6%. Signet expanded its adjusted operating income by 25.5% to $107.2 million and raised its full-year adjusted operating income guidance to $535-$605 million from a prior range of $480-$560 million.

A key driver of the improved outlook is the renewed consumer credit partnership with Bread Financial, which extends through December 2035. Management expects this agreement to generate more than $1 billion in incremental non-comp revenues and operating income over its life, with an operating benefit of $200-$250 million projected over the next 36 months. The company anticipates receiving approximately $80 million in cash during the fiscal third quarter from this deal.

Gross margin expanded by 80 basis points to 39.4% in the second quarter, aided by about $15 million in refunds for tariffs previously paid. This amount was $13 million above management's earlier expectation. While higher gold costs partially offset these gains, selling, general, and administrative expenses declined by 2.3% year over year to $493.6 million. Signet also repurchased approximately 1 million shares for $87 million during the quarter and plans to initiate a $125-million accelerated share-repurchase program in September.

For the fiscal third quarter, Signet projects total sales of $1.37-$1.41 billion, with same-store sales expected to range from a 1% decline to 2% growth. The company maintains its full-year sales outlook at $6.7-$6.9 billion but has raised its same-store sales projection to flat through 2.5% growth. As of August 1, 2026, Signet operated 2,534 stores and held $526.8 million in cash and cash equivalents.