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Investing.com -- Signet Jewelers Limited, the world’s largest diamond jewelry retailer, saw its shares gain 5% premarket on Tuesday after reporting second-quarter fiscal 2026 results that exceeded analyst expectations and raising its full-year guidance.
The company reported adjusted earnings per share of $1.61, significantly beating the analyst estimate of $1.24. Revenue came in at $1.54 billion, surpassing the consensus estimate of $1.5 billion and representing a 3.0% increase YoY. Same-store sales grew 2.0% compared to the same period last year, driven by a 5% combined increase at Kay, Zales, and Jared brands.
Signet’s adjusted operating income jumped more than 20% to $85.4 million, with operating margin expanding to 5.6% from 4.6% in the prior-year quarter. The improvement was fueled by gross margin expansion of 60 basis points to 38.6% and effective cost management.
"Our second quarter results were driven by the expansion of on-trend fashion assortment and effective promotion and pricing strategies," said J.K. Symancyk, Chief Executive Officer. "Our heightened focus on Kay, Zales, and Jared fueled a combined same store sales increase of 5% at these brands."
The company raised its fiscal 2026 outlook, now projecting revenue between $6.67 billion and $6.82 billion, up from its previous forecast of $6.57 billion to $6.80 billion. Adjusted EPS guidance was increased to $8.04-$9.57 from $7.70-$9.38 previously.
For the third quarter, Signet expects revenue of $1.34 billion to $1.38 billion with same-store sales ranging from a 1.25% decline to a 1.25% increase.
During Q2, the company’s merchandise average unit retail price increased 9%, with a 4% rise in bridal items and a 12% jump in fashion pieces, indicating strong pricing power despite what the company describes as a "measured consumer environment."