Signet Jewelers (SZ2) Q2 2027 Earnings Report

The call was strongly positive, supported by positive comparable sales, 36% adjusted EPS growth, operating margin expansion, a favorable Bread Financial agreement, improved cash generation, increased share repurchases and a second increase to full-year guidance. Challenges remain in lower-price-point and Banter performance, tariff and gold cost pressures, second-half SG&A deleverage and cautious near-term sales ranges, but management expressed growing confidence in execution and the holiday outlook.

For the full year, Signet expects a same-store sales range of flat to up 2.5%, adjusted operating income between $535 million and $605 million, up nearly 10% or $50 million at the midpoint, GMM expansion, SG&A leverage for the entirety of the year with modest deleverage in the second half, $17 million to $25 million higher incentive comp expense, adjusted EPS guidance increasing by over 10%, and $150 million to $180 million in capital expenditures; it expects between $30 million to $40 million of non-comp revenue and gross margin benefit this year, $30 million of refunds on tariffs previously paid, no material amount of indirect refunds in the current year, and indirect refunds to benefit fiscal '28 at a similar level or somewhat higher level than direct refunds this year. For the third quarter, it expects a same-store sales range of down 1% to up 2%, adjusted operating income between $31 million and $48 million, $7 million to $9 million of benefit from refund of tariffs previously paid, $12 million to $16 million of benefit from the new credit deal beginning in September, and 40% to 50% of the incremental incentive comp expense to flow into the third quarter; the implied fourth-quarter top line range is minus 2% to plus 3%.