Signet Jewelers (SIG) Q2 2025 earnings summary

Executive summary

• Achieved fifth consecutive quarter of sequential same-store sales improvement, though Q2 FY25 sales declined 7.6% year-over-year to $1.5 billion, with same-store sales down 3.4% amid macroeconomic headwinds.

• Merchandise margin and average transaction value increased, driven by new and innovative merchandise and strong fashion sales.

• Operating loss was $100.9 million due to $166 million in non-cash impairment charges, mainly from Digital Banners, Blue Nile, and Diamonds Direct.

• Adjusted operating income was $68.6 million (4.6% of sales), with adjusted EPS of $1.25, both down from the prior year.

• On track to deliver fiscal 2025 guidance, supported by positive engagement unit growth and cost savings initiatives.

Financial highlights

• Q2 revenue was $1.5 billion, down 7.6% year-over-year; same-store sales declined 3.4%.

• Gross margin was $566 million (38% of sales), up 10 basis points year-over-year, reflecting improved merchandise margins offset by fixed cost deleverage.

• SG&A expense was $498 million (33.4% of sales), up as a percentage of sales due to higher advertising and fixed labor costs.

• Inventory ended just below $2 billion, down over 5% year-over-year.

• Cash and cash equivalents at quarter end were $403.1 million, with no outstanding debt and $1.2 billion available under the ABL facility.

Outlook and guidance

• Q3 revenue expected between $1.345–$1.38 billion; same-store sales guidance of -1% to +1.5%.

• FY25 sales guidance: $6.66–$7.02 billion; same-store sales (4.5%) to +0.5%; adjusted operating income $590–$675 million; adjusted EBITDA $780–$865 million; adjusted diluted EPS $9.90–$11.52.

• Adjusted operating income for Q3 guided at $8–$25 million; adjusted EBITDA at $55–$72 million.

• Increased annual cost savings target to $200 million and three-year target to $450 million.

• Capital expenditures for the year expected at $160–$180 million, with ongoing investments in store renovations and digital enhancements.