Signet Jewelers Ltd. (NYSE: SIG), the world’s largest retailer of diamond jewellery, reported strong first-quarter earnings on Thursday that lifted the stock 14%. CEO Gina Drosos revealed her optimism in the company’s e-commerce investments, and believes they will flourish even after the pandemic subsides.
“I think the pandemic has changed customer shopping behavior forever. We’re seeing a lot more customers come to us online, even if not to purchase, to look at selection, to become educated,” Drosos said on CNBC’s “Closing Bell.”
Amid the positive news, Wells Fargo analyst Ike Boruchow, who had previously been cautious of the stock, raised his rating on Signet from Underweight to Equal Weight. Furthermore, Boruchow elevated his price target from USD57 to USD70.
Signet reported sales of USD1.69 Billion, compared to Wall Street expectations of USD1.62 Billion. Additionally, pre-share earnings amounted to USD2.23, beating analysts’ expectations of USD1.27.
“We delivered strong performance across our portfolio. While the jewelry category is experiencing meaningful growth, we are outpacing market growth and gaining share consistent with our Inspiring Brilliance strategy. Specifically, we are winning in our biggest banners through consumer-inspired differentiation, as evidenced by double-digit revenue growth in both Kay and Zales versus this time two years ago,” Drosos said.
Signet is also owner of the Jared and Piercing Pagoda brands, and has about 2,800 locations, per its earnings release. Earlier this year, Dorsos expressed that Signet was hoping to “optimize” its stores, partly by decreasing its interaction with lower-quality malls.
Joan Hilson, Chief Financial and Strategy Officer, added, “We are entering this next phase of Signet’s transformation from a position of financial strength. We are continuing to increase liquidity with ongoing cash, cost and inventory discipline, enabling accelerated investment in innovation and growth.”