Signet Jewelers reported a 2.0% year-on-year increase in revenue for the first quarter of Fiscal 2026, with total sales reaching $1.54 billion. Same store sales rose 2.5%, marking a recovery from an 8.9% decline in the same period last year. The company cited changes to its pricing and product mix across its largest brands—Kay, Zales, and Jared, which saw sequential sales increases.
Gross margin rose by $26 million to $598.8 million, primarily due to higher product margins and more efficient use of fixed costs. The gross margin rate increased by 100 basis points to 38.8%.
Profitability and Operational Efficiency
Despite the revenue growth, operating income declined slightly to $48.1 million from $49.8 million in the prior year. However, when adjusted to exclude restructuring charges, operating income increased to $70.3 million, up from $57.8 million. The adjusted operating margin improved to 4.6% from 3.8%.
Diluted earnings per share were $0.78, compared to a loss of $0.90 in the same quarter last year. Adjusted diluted EPS increased to $1.18 from $1.11, reflecting higher adjusted operating income and a reduced share count, offset in part by a higher tax rate.
Inventory and Cash Flow
Inventory levels were broadly flat year-on-year at $2.0 billion, up approximately 1%. Operating cash outflows totalled $175.3 million, compared to $158.2 million in the prior year. Cash and cash equivalents declined significantly to $264.1 million from $729.3 million a year ago. This decrease was due to debt repayments and the repurchase of company shares.
Capital Allocation and Share Repurchases
The company repurchased approximately 2.1 million shares for $117.4 million during the quarter. An additional 235,000 shares were repurchased after the quarter ended, bringing the year-to-date total to over 5% of the outstanding share count. The company has around $600 million of share repurchase authorisation remaining.
Signet’s Board of Directors has declared a quarterly cash dividend of $0.32 per share, payable on 22 August 2025 to shareholders of record on 25 July 2025.
Guidance and Outlook
For the second quarter of Fiscal 2026, Signet forecasts sales between $1.47 billion and $1.51 billion and same store sales ranging from -1.5% to +1.0%. Adjusted operating income is expected between $53 million and $73 million.
For the full fiscal year, Signet raised the lower end of its guidance, now anticipating total sales between $6.57 billion and $6.80 billion. Same store sales are projected to range from -2.0% to +1.5%. The company has also increased its adjusted diluted EPS guidance to between $7.70 and $9.38, up from the previous range of $7.31 to $9.10.
Guidance is based on a continued cautious consumer environment and assumes no additional tariffs beyond current levels. The company plans capital expenditures of $145 million to $160 million and expects flat to slightly reduced retail square footage.
Strategic Commentary
Chief Executive Officer J.K. Symancyk said the company had achieved monthly same store sales growth through the quarter and into May. “We delivered positive same store sales growth each month of the quarter, and into May, by bolstering our offerings at key price points and continuing the evolution of our assortment. Our three largest brands – Kay, Zales, and Jared – all saw sequential comp sales improvement from the fourth quarter on higher margins, highlighting the impact of our outsized focus on our larger brands,” said J.K. Symancyk. “The Grow Brand Love strategy is gaining traction and our reorganization is substantially complete. While we’re in the early innings of Grow Brand Love, our strategy is already driving growth in both Bridal and Fashion. I would like to thank the team for activating our strategy and delivering positive initial results.”
Joan Hilson, Chief Operating and Financial Officer, added:
“Our refined promotional strategy and inventory management delivered both gross merchandise margin and adjusted operating margin expansion in the quarter with sales improvement outpacing inventory growth. Given our positive performance, we are increasing the low end and maintaining the high end of our Fiscal 2026 operating guidance. This outlook reflects the current macro environment and current tariffs as well as on track cost savings initiatives. Further, we are raising our adjusted EPS guidance to reflect the repurchase of more than 5% of outstanding shares year to date.”
Outlook for Jewellers
The results reflect signs of stabilising consumer demand in Signet’s core markets. The company’s larger brands recorded sales gains, and gross margin growth indicates tighter control over pricing and costs. The company’s approach to inventory levels, pricing strategy, and focus on its major brands provides insight into how larger retailers are responding to current market conditions.
