Signet Jewelers (SIG) Stock Forecast & Price Target

Signet Jewelers reported a 3.0% increase in total sales, reaching $1.392 billion, while average unit retailer prices grew by 7.0% year-over-year, indicating strong demand and pricing power. The company's gross margin expanded significantly, rising 130 basis points year-over-year to 37.3%, surpassing both consensus expectations and internal guidance, despite pressures from tariffs and increased gold costs. Additionally, the growth of lab-grown diamonds within the fashion segment reflects a successful adaptation to consumer trends, contributing positively to overall sales dynamics.

The financial outlook for Signet Jewelers is concerning due to a below-consensus guidance for Q4, indicating a comparable sales decline of 5.0% to an increase of only 0.5%, highlighting weak consumer confidence. Additionally, there is an estimated $0.04 drag on earnings per share from a higher tax rate, compounding the negative sentiment surrounding the company's projected fiscal year 2026 comparable sales range of a decline of 0.75% to an increase of 1.75%. The anticipated performance of the North American segment, which significantly contributes to overall revenue, further exacerbates the outlook as it reflects a potential decline especially during a critical shopping period.