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Taking Stock of Signet’s Risk Factors
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Taking Stock of Signet’s Risk Factors

Shares of diamond jewelry and other products’ retailer Signet Jewelers Ltd. (SIG) surged 222% last year. Recently, the company’s third-quarter performance surpassed expectations.

Owing to the double-digit growth in e-commerce and Brick and Mortar sales, revenue increased 15.7% over the prior year to $1.5 billion. Analysts had expected revenue of $1.3 billion. Further, earnings per share jumped 13x over the previous year to $1.43 per share.

Same-store sales of the company increased 19% during this period. With these developments in mind, let’s look at what’s changed in the company’s key risk factors that investors should know.

Risk Factors

According to the TipRanks’ Risk Factors tool, Signet Jewelers’ top risk category is Finance & Corporate, which contributes 24% to the total 33 risks identified. In its recent quarterly report, the company has changed four key risk factors.

SIG highlights that the long-term growth of its business hinges on successfully executing evolving business and strategic initiatives. Any difficulty or delay in integrating an acquisition, business combination, or strategic initiative could mean not achieving the anticipating benefits from such an undertaking. The company also pointed out that the goods it carries are of high value with resale potential. Consequently, these products can be a target of theft, looting, shoplifting and burglary. Any security incident towards SIG’s physical as well as intellectual property could adversely impact the company.

SIG notes that its performance depends on U.S. consumer confidence and the U.S. economy. Any decline in spending by consumers, especially during the shopping season could have a negative impact on its performance.

Finally, the company noted that the COVID-19 pandemic has had an adverse impact on its business and could continue to impact it in the future as well.

The Macro & Political risk factor’s sector average stands at 11%, compared to SIG’s 15%.

Tracking Insiders

Keeping a tab on insiders stocks can provide timely insights to retail investors. TipRanks data on Insider Activity points that insiders have sold Signet Jewelers shares worth $11 million in the last three months, indicating a very negative insider confidence signal for the stock based on 12 insider transactions in the last three months.

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