Investor Alert

Oct. 13, 2021, 9:08 a.m. EDT

Signet leaves the mall with $490 million Diamonds Direct acquisition, raises full-year guidance

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Tonya Garcia

Signet Jewelers Ltd. shares rose 3.1% in Tuesday premarket trading after it announced the $490 million acquisition of Charlotte, N.C.-based Diamonds Direct USA Inc., a jewelry retailer that’s “off-mall” and adds to Signet’s bridal business.

Signet /zigman2/quotes/204614427/composite SIG -0.88% says the acquisition will be “immediately accretive” and will help Signet reach a younger, luxury consumer.

The acquisition is an all-cash transaction that’s expected to close in the fourth quarter of fiscal 2022.

After the close, Diamond Direct’s leadership team will remain with Itay Berger, Diamond Direct’s president, reporting to Signet’s Chief Executive Virginia Drosos. Once the transaction is complete, Berger and other Diamond Direct executives will invest in Signet shares.

Signet has also raised its full-year guidance.

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“Customers are showing positive response to our new product launches, and the reduction in government stimulus and customer shift to spending on entertainment and travel are having less impact than we previously anticipated,” said Joan Hilson, Signet’s chief financial and strategy officer, in a statement.

“While there remain factors beyond our control, our strengthened supply chain and vendor partnerships gave us the ability to plan earlier receipt of holiday product, and we currently do not expect any material supply chain disruptions. Signet uses air freight for the transit of the vast majority of our merchandise, thus avoiding current ocean freight congestion.”

Signet is now guiding for third-quarter revenue of $1.42 billion to $1.45 billion, up from $1.26 billion to $1.31 billion and same-store sales growth of 10% to 12%, up from previous guidance of a 3% decline to 1% increase.

The FactSet consensus is for revenue of $1.28 billion and same-store sales growth of 0.7%.

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For the full-year, Signet is guiding for revenue of $7.04 billion to $7.19 billion, up from $6.80 billion to $6.95 billion, and same-store sales growth of 35% to 38%, up from 30% to 33% growth.

The FactSet consensus is for revenue of $6.95 billion and same-store sales growth of 36.8%.

The company also plans to close more than 100 locations in fiscal 2022 and open 100, primarily Banter by Piercing Pagoda shops. Existing Signet chains also include Kay Jewelers and Zales.

Signet stock has soared nearly 200% for the year to date while the benchmark S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.65% is up 15.8% for the period.

$ 74.04
-0.66 -0.88%
Volume: 822,803
March 22, 2023 4:00p
P/E Ratio
Dividend Yield
Market Cap
$3.38 billion
Rev. per Employee
-65.90 -1.65%
Volume: 0.00
March 22, 2023 5:05p

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