Signet Jewelers Limited (SIG – Free Report) is likely to register a decrease in the top line when it report its third-quarter fiscal 2024 results on Dec 5, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $1,393 million, indicating a 12% drop from the prior-year quarter’s reported figure.
The consensus estimate for quarterly earnings has been unchanged in the past 30 days at 19 cents per share, implying a 74.3% decrease from the prior-year quarter’s actual.
In the last reported quarter, Signet’s bottom line outperformed the consensus mark by 15.7%. This renowned jewelry and accessories retailer has a trailing four-quarter earnings surprise of 47.3%, on average.
Key Aspects to Note
Signet’s quarterly results are likely to have been hurt by a challenging operating landscape, including inflationary pressures, higher promotional activity and foreign currency headwinds. Also, any deleverage in SG&A expenses and stiff competition are likely to have been headwinds. The increasing macro pressures on discretionary categories, including the jewelry industry, are concerning. On its last earnings call, management had expected deleveraged fixed costs for the quarter under review on lower sales.
For the fiscal third quarter, management had anticipated total sales to be in the band of $1.36-$1.41 billion and operating income to be in the range of $10-$25 million. The company had forecast a certain shift in consumer discretionary spending from the jewelry category due to decelerating consumer confidence. The Zacks Consensus Estimate for third-quarter sales is currently pegged at $1,291 million for the North American unit and $90 million for the International segment. These estimates reflect an increase of 11.9% and 5.3%, respectively, year over year.
We note that Signet has been taking initiatives to mitigate the aforesaid challenges. SIG’s e-commerce efforts, loyalty program, cost savings and the Inspiring Brilliance strategy appear encouraging. The Inspiring Brilliance growth strategy focuses on expanding big banners, boosting services, broadening the Accessible Luxury and Value segments, and accelerating digital commerce. SIG has been aiming to enhance the online shopping experience through in-store consultations and services like the buy online, pickup in-store and curbside options. These factors are likely to have provided some cushion to the quarterly performance.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Signet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Signet has an Earnings ESP of 0.00% and a Zacks Rank of 3 at present.
Stocks With The Favorable Combination
Here are a few companies, which according to our model, have the right combination of elements to come up with an earnings beat this reporting cycle:
Casey’s General Stores (CASY – Free Report) currently has an Earnings ESP of +0.04% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is expected to register a bottom-line decrease when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of $3.52 suggests a decline of 4.1% from the year-ago quarter.
The consensus mark for revenues is pegged at $4.1 billion, indicating a rise of 3.8% from the figure reported in the year-ago quarter. CASY has a trailing four-quarter earnings surprise of 17.5%, on average.
Five Below (FIVE – Free Report) presently has an Earnings ESP of +5.22% and a Zacks Rank of 3. FIVE is likely to register top-line improvement when it reports third-quarter fiscal 2023 numbers.
The Zacks Consensus Estimate for Five Below’s quarterly revenues is pegged at $726.9 million, calling for growth of 12.7% from the prior-year quarter’s reported figure. The consensus mark for the quarterly earnings per share of 23 cents suggests a 20.7% decrease from the figure reported in the year-ago quarter. FIVE has a trailing four-quarter earnings surprise of 29.2%, on average.
Costco (COST – Free Report) currently has an Earnings ESP of +5.23% and a Zacks Rank of 3. COST is likely to register a bottom-line increase when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.44 suggests an increase of 11% from the year-ago fiscal quarter’s reported number.
Costco’s top line is expected to improve from the prior-year fiscal quarter’s reported number. The consensus estimate for quarterly revenues is pegged at $57.7 billion, suggesting growth of 6% from the prior-year fiscal quarter’s reported figure. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
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