Signet Jewelers Limited reported a return to profitability, marking a significant shift from previous losses. Shares in the company rose sharply, reaching as much as a 24% increase during trading hours. The company’s parent organization includes well-known jewelry brands such as Kay Jewelers, Zales, and Jared.
Signet reported net income of $52.1 million for its second quarter of fiscal 2027. That compared with a loss of more than $9 million during the same quarter a year earlier. Adjusted earnings were $2.19 per share compared with $1.61 a year earlier.
Management announced that all three months of the quarter showed positive comparable sales, according to Yahoo Finance. Performance across its fine jewelry brands improved during the period. Blue Nile sales increased to $83.6 million from $74.7 million a year earlier.
This improvement suggests that recovery is not limited to one brand or a short-term sales boost. The company’s ability to expand margins helped drive stronger earnings, even though revenue growth remained modest.
Revenue totaled $1.528 billion. That was down 0.5% from $1.535 billion a year earlier. Same-store sales increased 2.2%. Gross margin increased to 39.4% from 38.6% a year earlier.
Signet’s profit for the quarter exceeded analyst expectations by a wide margin, showing strong financial improvement. Stronger sales in bridal and timepiece categories, along with better inventory control, contributed to the improved profitability.
Timepiece comparable sales grew at a rate of nearly 10%. Bridal comparable sales increased at a low-single-digit rate. Fashion comparable sales fell 1%. Demand was especially strong for jewelry priced above $2,000.
Redesigned websites for Kay and Jared are expected to support increased digital sales in the future. The company also announced a plan to repurchase $125 million worth of its shares through an accelerated share repurchase program.
Signet repurchased about $87 million of shares during the quarter and another $33 million after the quarter ended. Its board also increased the remaining share repurchase authorization to $700 million before the planned accelerated program.
Signet extended its consumer credit agreement with Bread Financial through the year 2035. The updated agreement includes quarterly profit sharing and other terms that Signet expects to generate more than $1 billion in incremental non-comparable revenue and operating income over the life of the agreement.
The agreement is expected to provide an operating benefit of $200 million to $250 million during the next 36 months. Signet also expects to receive about $80 million in cash during the third quarter. That payment will be recognized over the remaining term of the agreement.
The partnership also brings enhanced technology and data analytics capabilities to support customer financing and marketing efforts.
Despite the improved profitability, revenue growth remains a challenge for Signet Jewelers. The latest quarter showed that earnings growth was helped by margin improvement and cost reductions even as total sales declined slightly.
Selling, general and administrative expenses fell to $493.6 million from $505.3 million. Signet said the improvement came from changes to its operating model, spending discipline and leverage from positive same-store sales.
Without stronger top-line growth, the company may face difficulty maintaining its earnings momentum. Sales in fashion jewelry categories have not fully recovered, with some lines showing declines.
Bridal and timepiece sales provided more stability to the overall business performance. This shift in product focus makes Signet more reliant on higher-value items, which may not yet reflect a full recovery across all jewelry lines.
Signet raised its full-year fiscal 2027 profit outlook following the stronger quarter. The company also expects third-quarter sales of between $1.37 billion and $1.41 billion. Same-store sales are projected to range from a 1% decline to a 2% increase.
The results show Signet is improving profitability even while overall revenue remains nearly flat. Continued growth in comparable sales and higher-priced jewelry will be important as the company works to maintain that momentum.
IMAGE: Jared Galleria The of Jewelry store in the Tanasbourne area of w:Hillsboro, Oregon.. Photo: M.O. Stevens / Wikimedia, taken 2012-09-08, CC BY-SA 3.0