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Signet Shares Fall on Profit-Taking After Jeweler Lifts Guidance

Signet shares fell on profit-taking after the jeweler raised its revenue guidance and said it was buying peer Diamonds Direct for $490 million.
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Signet Jewelers  (SIG) - Get Signet Jewelers Limited Report shares fell on profit-taking Tuesday, after it raised its revenue guidance and said it was buying peer Diamonds Direct for $490 million.

For the fiscal 2022 third quarter ending about Oct. 31, the Hamilton, Bermuda, company forecast revenue of $1.42 billion to $1.45 billion. That's up from its previous estimate of $1.26 billion to $1.31 billion. The FactSet analyst consensus called for $1.28 billion.

Signet now sees same-store-sales growth of 10% to 12%, up from its prior projection of a range of a 3% decline to a 1% increase. Analysts had forecast a rise of 0.7%.

Signet stock on Tuesday closed 0.5% lower to $81.62. The stock rose 1.5% after hours. It has more than tripled (up 284%) over the past year, even after Tuesday’s dip. So investors had plenty of room to cash in on gains.

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For all of fiscal 2022, Signet expects revenue of $7.04 billion to $7.19 billion, up from its estimate of $6.8 billion to $6.95 billion previously. Analysts called for $6.95 billion.

And it anticipates a same-store sales increase of 35% to 38%, up from 30% to 33% previously. Analysts estimated 36.8%.

As for the acquisition, it’s all cash, and Signet expects it to close in the fourth quarter of fiscal 2022, which ends about Jan. 31. It will immediately add to earnings and help Signet reach wealthy younger customers, it said.

Last month, Signet reported better-than-expected earnings for the second quarter ended July 31. Sales more than doubled to $1.78 billion from $888 million.