Signet Jewelers stock is up 24% after the retailer of necklaces and bracelets announced strong financial results and said that it plans to close about 10% of its shopping mall outlets.
Closing the shopping mall locations will help Signet Jewelers better allocate money and resources to its real estate portfolio, and is being applauded by analysts and investors. News of the mall closures comes as Signet, which owns retail brands such as Kay Jewelers and Jared, posted strong fourth-quarter 2024 financial results.
Signet said that it earned $6.62 a share on sales of $2.40 billion. The top and bottom line results surpassed the consensus expectations on Wall Street that called for earnings of $6.25 a share and revenue of $2.30 billion. The company also offered bullish guidance, saying it expects 1% sales growth in the current quarter, slightly ahead of analyst forecasts of a 0.9% increase.
Reorganization Plan
While Signet’s earnings and outlook were strong, investors really seem to like the company’s reorganization plan and move to reduce its shopping mall footprint. The company said it plans to focus this year on “real estate optimization” and expects to move more than 10% of its stores in malls to other locations and to its growing e-commerce channel.
Signet has long been known as a physical retailer with a strong presence in shopping malls across North America. However, it has been increasingly shifting to other locations and to online sales as it sees consumer traffic in malls fade after the Covid-19 pandemic.
Even with today’s big move higher, SIG stock is still down 25% on the year.
Is SIG Stock a Buy?
The stock of Signet Jewelers has a consensus Moderate Buy rating among five Wall Street analysts. That rating is based on three Buy and two Hold recommendations issued in the last three months. The average SIG price target of $85.80 implies 44.20% upside from current levels.
Read more analyst ratings on SIG stock
Questions or Comments about the article? Write to editor@tipranks.com