Signet Jewelers stock gained on Tuesday after the company reported solid quarterly earnings and raised its profit forecast for the year.
For its fiscal third quarter, ended in October, Signet (ticker: SIG) reported 74 cents per share in profits, more than double the consensus call of 32 cents among analysts tracked by FactSet. Revenue was $1.6 billion, compared with the consensus call for $1.5 billion.
The stock jumped more than 8% to around $62.50 in premarket trading Tuesday.
Signet, owner of the Zales and Jared jewelry chains, has had a tough 2022. The stock is down 34% even though earnings have generally been higher than expected throughout the calendar year. Challenges such as a weakening economy and a shift away from discretionary spending among consumers have hit Signet, much as they have other retailers.
Management said it continues to expect some degree of shifting of discretionary spending away from jewelry toward experience-based consumption, but its overall outlook was upbeat.
Last quarter, Signet maintained its financial forecasts for the full year, but Tuesday, it raised those calls, saying profit for the year ending January 2023 will be between $11.40 and $12 a share, compared with the $10.98 to $11.57 it had predicted earlier. Sales are expected to be $7.77 billion to $7.84 billion for the year, more than the prior outlook of $7.60 billion and $7.70 billion.
Analysts had expected a profit of $10.93 per share from revenue of $7.79 billion.
Signet’s outlook assumes that the economy doesn’t significantly worsen and that consumers face the same level of “pressure, including inflation and the impact of stimulus to what is currently being experienced,” a press release detailing the results said.
Management said inventories are healthy and that its efforts to mitigate disruptions to the supply chain have been effective so far.
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