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SIG

Signet Jewelers NYSE:SIG Stock Report

Last Price

US$69.10

Market Cap

US$3.2b

7D

7.0%

1Y

4.3%

Updated

17 Aug, 2022

Data

Company Financials +
SIG fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance5/6
Financial Health6/6
Dividends3/6

SIG Stock Overview

Signet Jewelers Limited operates as a diamond jewelry retailer.

Signet Jewelers Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Signet Jewelers
Historical stock prices
Current Share PriceUS$69.10
52 Week HighUS$111.92
52 Week LowUS$48.31
Beta2.31
1 Month Change22.09%
3 Month Change22.89%
1 Year Change4.35%
3 Year Change455.47%
5 Year Change33.17%
Change since IPO-17.90%

Recent News & Updates

Aug 10

Signet Jewelers: Tough Spot, But Starting To Shine

Signet has seen a very strong rally post the pandemic, including a strong operating performance. This is now in (partial) reversal amidst a tougher macro world. With the balance sheet being in pristine shape, valuations here are quite appealing, as I am happy to nibble here. In January of this year, I noted that Signet Jewelers Limited (SIG) has come to life following the pandemic, a huge event which coincided with the transformation of the business. The company was on fire from an operating point of view, held a strong balance sheet, yet made a surprising deal. Performing a balancing act, I was trying to learn more about the new margin potential, before making up my mind. The Former Take Signet Jeweler is one of the larger players in a huge, nearly $100 billion jewelry and watch market, mostly comprised out of independent franchises. In fact, the company holds just about a 6% share in this market, as its conglomerate basically consists out of a collection of brands, including Ernest Jones, H.Samuel, James Allen, Jared, Kay and Zales, among quite a few other names. The company aims to squeeze out the best operational performance from these brands, including more e-commerce and omnichannel operations, while selectively pursuing M&A as well. Signet posted its fiscal 2020 results basically at a time when the pandemic started, with sales that year coming in flattish at $6.1 billion. Operating profits (adjusted) came in at $318 million, for margins just north of 5%. This translated into adjusted earnings of nearly $4 per share, yet GAAP earnings only amounted to $1.40 per share, with large charges taken in relation to the restructuring of the business. Nonetheless, shares traded at non-demanding multiples at $25 per share. Sales fell to just $5.2 billion in the fiscal year 2021, for obvious reasons, as adjusted operating margins fell to 3%, with adjusted earnings still coming in around $2 per share. Following this difficulty, the company has seen a very strong fiscal 2021 with real momentum showing up throughout the year as this confidence inspired the company into acquiring Diamonds Direct in October in a $490 million deal. This deal for the off-mall retailer looked a bit odd, yet could easily be financed, even as it was equivalent to roughly 10% of the own valuation. By now, Signet guided for 2022 sales at $7.1 billion and operating margins near 10%, resulting in a boom in earnings. This triggered a huge rally to a high of $110 in November, and shares traded at $90 in January, even as the company kept hiking the 2022 guidance. Even more so, the balance sheet revealed a net cash position of a billion (even after the Diamonds deal), and with 63 million shares outstanding, that was equivalent to more than $15 per share. This implies that operating assets traded hands at $75 per share, at a time when earnings power trended around $10 per share. This discussion above shows that the superior performance could not be maintained, as the question is what normal sales and margins levels look like, as the boom in the results coincided with the post-pandemic rally. I furthermore had not forgotten that this was a >$100 stock in 2015 following a big deal for Zale at the time, although this story was different as the company now operates with a strong net cash position. Not believing the current earnings to be sustainable, I concluded to remain on the sidelines, looking forward to the story unfolding. Caution Saves The Day Since urging this cautious tone at $90 at the start of the year, shares have seen a meaningful pullback as signs of a slowdown were obvious, although shares since have bounced from their lows around $50, to now trade at $65 per share again. In March, Signet posted its 2022 results with revenues up 50% to $7.8 billion as operating profits topped $900 million, for margins of 11% and change. Earnings topped $12 per share, albeit that the momentum was much softer in the fourth quarter. For the fiscal year 2023, Signet guided for sales at around $8.1 billion and earnings at roughly $12.50 per share, basically indicating flattish results, but given the height of these results, it was very strong. Net cash stood at $1.27 billion, and that is after the acquisition of Diamonds Direct already, equal to $20 per share if we look at the diluted share count. First quarter 2023 results, as released in June, revealed $1.8 billion in sales, up 9% on the year with organic growth coming in around 2%. While adjusted earnings were up, GAAP earnings took a huge beating amidst a $190 million litigation charge, among others. Net cash fell below $800 million, the result of continued share buybacks. Despite some softer results and uncertain outlook, the company did not adjust the full year guidance. In August, a somewhat long-expected profit warning came as the company now sees full year sales at $7.65 billion, nearly half a billion cut on that front. Adjusted operating profits are seen just north of $800 million, a roughly $150 million reduction from the year before. This still translates into potential earnings of around $10 per share, still far from a shabby number. With a diluted share count of 50 million, net cash is down to $16 per share. This is still a very modest valuation at $65 today, as operating assets are valued at just around $50 per share, and with earnings still trending at $10 per share, the resulting multiple only comes in at 5 times earnings.

Shareholder Returns

SIGUS Specialty RetailUS Market
7D7.0%10.4%4.5%
1Y4.3%-23.4%-8.9%

Return vs Industry: SIG exceeded the US Specialty Retail industry which returned -23.4% over the past year.

Return vs Market: SIG exceeded the US Market which returned -8.9% over the past year.

Price Volatility

Is SIG's price volatile compared to industry and market?
SIG volatility
SIG Average Weekly Movement10.2%
Specialty Retail Industry Average Movement9.0%
Market Average Movement7.6%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market3.1%

Stable Share Price: SIG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: SIG's weekly volatility (10%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
n/a30,856Gina Drososhttps://www.signetjewelers.com

Signet Jewelers Limited operates as a diamond jewelry retailer. It operates through three segments: North America, International, and Other. The North America segment operates jewelry stores in jewelry stores in malls, mall-based kiosks, and off-mall locations in the United States and Canada primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria Of Jewelry, Jared Vault, Zales Jewelers, Zales Outlet, Diamonds Direct, James Allen, Banter by Piercing Pagoda, and Peoples Jewellers names, as well as operates online through JamesAllen.com and Rocksbox.

Signet Jewelers Fundamentals Summary

How do Signet Jewelers's earnings and revenue compare to its market cap?
SIG fundamental statistics
Market CapUS$3.21b
Earnings (TTM)US$513.50m
Revenue (TTM)US$7.98b

6.3x

P/E Ratio

0.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SIG income statement (TTM)
RevenueUS$7.98b
Cost of RevenueUS$4.84b
Gross ProfitUS$3.14b
Other ExpensesUS$2.62b
EarningsUS$513.50m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

Sep 01, 2022

Earnings per share (EPS)11.04
Gross Margin39.33%
Net Profit Margin6.44%
Debt/Equity Ratio7.7%

How did SIG perform over the long term?

See historical performance and comparison

Dividends

1.2%

Current Dividend Yield

7%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is SIG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SIG?

Other financial metrics that can be useful for relative valuation.

SIG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.5x
Enterprise Value/EBITDA4.5x
PEG Ratio-0.5x

Price to Earnings Ratio vs Peers

How does SIG's PE Ratio compare to its peers?

SIG PE Ratio vs Peers
The above table shows the PE ratio for SIG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average21.1x
EYE National Vision Holdings
33.1x9.4%US$2.9b
LESL Leslie's
20.5x9.9%US$3.0b
ASO Academy Sports and Outdoors
6.3x3.5%US$4.1b
WOOF Petco Health and Wellness Company
24.2x14.1%US$4.4b
SIG Signet Jewelers
6.4x-11.9%US$3.3b

Price-To-Earnings vs Peers: SIG is good value based on its Price-To-Earnings Ratio (6.3x) compared to the peer average (21.1x).


Price to Earnings Ratio vs Industry

How does SIG's PE Ratio compare vs other companies in the US Specialty Retail Industry?

Price-To-Earnings vs Industry: SIG is good value based on its Price-To-Earnings Ratio (6.3x) compared to the US Specialty Retail industry average (7x)


Price to Earnings Ratio vs Fair Ratio

What is SIG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SIG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio6.3x
Fair PE Ratio9.5x

Price-To-Earnings vs Fair Ratio: SIG is good value based on its Price-To-Earnings Ratio (6.3x) compared to the estimated Fair Price-To-Earnings Ratio (9.5x).


Share Price vs Fair Value

What is the Fair Price of SIG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SIG ($69.1) is trading below our estimate of fair value ($110.21)

Significantly Below Fair Value: SIG is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Signet Jewelers forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-11.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SIG's earnings are forecast to decline over the next 3 years (-11.9% per year).

Earnings vs Market: SIG's earnings are forecast to decline over the next 3 years (-11.9% per year).

High Growth Earnings: SIG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SIG's revenue (1.6% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: SIG's revenue (1.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SIG's Return on Equity is forecast to be high in 3 years time (35.5%)


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Past Performance

How has Signet Jewelers performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


17.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SIG has a large one-off loss of $206.1M impacting its April 30 2022 financial results.

Growing Profit Margin: SIG's current net profit margins (6.4%) are higher than last year (4.7%).


Past Earnings Growth Analysis

Earnings Trend: SIG's earnings have grown by 17.5% per year over the past 5 years.

Accelerating Growth: SIG's earnings growth over the past year (81.6%) exceeds its 5-year average (17.5% per year).

Earnings vs Industry: SIG earnings growth over the past year (81.6%) exceeded the Specialty Retail industry 29.2%.


Return on Equity

High ROE: SIG's Return on Equity (28.7%) is considered high.


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Financial Health

How is Signet Jewelers's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: SIG's short term assets ($3.5B) exceed its short term liabilities ($2.1B).

Long Term Liabilities: SIG's short term assets ($3.5B) exceed its long term liabilities ($2.2B).


Debt to Equity History and Analysis

Debt Level: SIG has more cash than its total debt.

Reducing Debt: SIG's debt to equity ratio has reduced from 19.5% to 7.7% over the past 5 years.

Debt Coverage: SIG's debt is well covered by operating cash flow (653.1%).

Interest Coverage: SIG's interest payments on its debt are well covered by EBIT (54.2x coverage).


Balance Sheet


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Dividend

What is Signet Jewelers's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.16%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SIG's dividend (1.16%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: SIG's dividend (1.16%) is low compared to the top 25% of dividend payers in the US market (3.95%).


Stability and Growth of Payments

Stable Dividend: SIG's dividend payments have been volatile in the past 10 years.

Growing Dividend: SIG's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (7.4%), SIG's dividend payments are thoroughly covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (4.5%), SIG's dividend payments are thoroughly covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure


CEO

Gina Drosos (59 yo)

5yrs

Tenure

US$12,953,460

Compensation

Ms. Virginia C. Drosos, also known as Gina, serves as Independent Director of Foot Locker, Inc. since February 02, 2022. She has been the Chief Executive Officer of Signet Jewelers Limited (Formerly, Signe...


CEO Compensation Analysis

Compensation vs Market: Gina's total compensation ($USD12.95M) is above average for companies of similar size in the US market ($USD6.57M).

Compensation vs Earnings: Gina's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: SIG's management team is considered experienced (3.4 years average tenure).


Board Members

Experienced Board: SIG's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SIG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Signet Jewelers Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Signet Jewelers Limited
  • Ticker: SIG
  • Exchange: NYSE
  • Founded: NaN
  • Industry: Specialty Stores
  • Sector: Retail
  • Implied Market Cap: US$3.214b
  • Shares outstanding: 46.51m
  • Website: https://www.signetjewelers.com

Number of Employees


Location

  • Signet Jewelers Limited
  • Clarendon House
  • 2 Church Street
  • Hamilton
  • HM11
  • Bermuda

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/17 00:00
End of Day Share Price2022/08/17 00:00
Earnings2022/04/30
Annual Earnings2022/01/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.