Signet raises FY26 guidance to $6.82B as lab-grown diamond penetration accelerates

Earnings Call Insights: Signet Jewelers Limited (SIG) Q2 2026

Management View

• CEO James Symancyk highlighted three takeaways: "we delivered another quarter of positive same-store sales and earnings ahead of our expectations... we've delivered 8 consecutive months of positive comps... we continue to make early progress on our Grow Brand Love strategy through distinct merchandise, enhanced marketing and unique experiences as well as attracting key leaders to advance our growth agenda... we are fully prepared and well positioned for holiday as we enter our most critical season with momentum and clear strategic focus."
• Symancyk noted same-store sales of 2%, driven by prioritization of Kay, Zales, and Jared, with combined same-store sales growth of approximately 5% and a 2% comp growth in fashion. LGD fashion accelerated to approximately 14% penetration of fashion sales.
• Merchandise initiatives included expanded collections like UNSPOKEN and Shy Creation at Jared, more milestone gifting pieces at Kay, and breadth in self-purchase fashion at Zales. Marketing was strengthened by a more than 40% increase in impressions at the three largest brands and a 20% increase in social media spend. Lisa Laich was named Chief Marketing Officer, while Julie Yoakum joined as Kay and Peoples brand President.
• On customer experience, Symancyk described a reorganization placing store operations under brand leaders and cited Jared's upgraded packaging and best year-on-year improvement in in-store sales conversion.
• Symancyk stated, "We believe we are well positioned to enter the holiday season with the right merchandise assortment at the right price points and the right marketing campaigns... we are navigating a dynamic tariff environment to deliver for our customers and our shareholders."
• CFO Joan Hilson reported, "Revenue for the quarter was over $1.5 billion with comp growth of 2%, led by growth in fashion and services.... Adjusted operating income grew more than 20% to $85 million for the quarter... Adjusted EPS was $1.61, which was 29% above last year on higher income and a lower share count."
• Hilson also detailed Blue Nile's return to positive comps in July and a 25% increase in fashion revenue, while James Allen's performance modestly improved.

Outlook

• Hilson provided Q3 sales guidance of $1.34 billion to $1.38 billion and same-store sales in the range of down 1.25% to up 1.25%. Full-year guidance was raised to $6.67 billion to $6.82 billion in total sales, with same-store sales in the range of down 0.75% to an increase of 1.75%. Adjusted operating income is now expected between $445 million and $515 million, and adjusted EPS was raised to a range of $8.04 to $9.57 per diluted share.
• Hilson explained, "If the penalty were to remain in effect for the balance of the year, we expect adjusted operating income in the middle to lower end of the range. Conversely, if the tariff penalty is removed in the next 2 months, we expect adjusted operating income in the upper half of the range."

Financial Results

• Revenue was over $1.5 billion, with comp growth of 2% and a 2% comp growth in fashion. Services posted over 7% growth, and LGD fashion achieved approximately 14% penetration of fashion sales.
• Merchandise average unit retail (AUR) increased approximately 9%, with fashion up more than 12%. Gross margin rate expanded by 60 basis points, including a 30 basis point increase in merchandise margin. SG&A rate improved by 50 basis points due to cost savings from reorganization.
• Free cash flow for the quarter was over $60 million, with share repurchases of approximately $32 million during the quarter and $150 million year-to-date.

Q&A

• Paul Lejuez, Citigroup Inc.: Asked about AUR drivers in bridal and fashion, and tariffs impact. Symancyk responded that mix is the primary driver, particularly with the expansion of LGD, and described ongoing tools to mitigate tariffs by adjusting design, sourcing, and production strategies.
• Lorraine Maikis, BofA Securities: Asked about bridal business momentum and pricing tests. Hilson said, "We're really pleased... with how bridal has been performing within our 3 largest brands... AUR be a strength... The unit growth, we see the opportunity to continue to trade up into higher carat weights," while pricing actions included selective, modest increases and less reliance on promotion.
• Randal Konik, Jefferies: Questioned fashion AUR headroom and CapEx cycle. Symancyk confirmed ongoing runway for AUR, with LGD fashion penetration at 14%, and Hilson said CapEx remains at $145 million to $160 million, weighted to real estate.
• Robert Bischoff, Wells Fargo: Asked about Q3 guidance and holiday comp plan. Hilson explained the guidance is measured, reflecting top-line momentum and factors like incentive cost resets and tariffs. Symancyk added, "We believe we're well positioned to maximize the holiday season."
• Mauricio Serna Vega, UBS: Probed Q3 performance trends and tariff pressures. Hilson described positive comp trends continuing into August and detailed tariff impact scenarios for operating income.
• Dana Telsey, Telsey Advisory Group: Asked about holiday playbook and team buildout. Symancyk detailed assortment and inventory shifts to target $200-$500 price points and said the leadership team is nearly complete, with one technology role open.
• James Sanderson, Northcoast Research: Inquired about fashion unit decline, bridal outlook, and LGD mix. Hilson reported a high single-digit decline in fashion units due to gold pricing and strategic assortment changes, with bridal units expected to be relatively flat.

Sentiment Analysis

• Analysts raised questions on tariffs, pricing, and sustainability of AUR gains, showing a cautious to neutral tone, focusing on risks and levers for guidance.
• Management demonstrated confidence in both prepared remarks and Q&A, emphasizing readiness for holiday, strategic agility, and mitigation tactics, with responses such as "We believe we are well positioned to enter the holiday season..." and "we expect to be able to continue to do that."
• Compared to the previous quarter, management maintained a confident tone, while analysts' tone was similarly measured, continuing to probe around tariffs and pricing.

Quarter-over-Quarter Comparison

• Guidance was raised for full-year sales and EPS, with specific mention of tariff impact scenarios—greater clarity and detail were provided this quarter.
• LGD fashion penetration cited as 14%, doubling from last year, with continued focus on fashion and core brands. The previous quarter also reported strong LGD and fashion growth but less detail on mitigation strategies for tariffs.
• Management's tone remained confident, with increased emphasis on marketing efficiency and new leadership hires. Analysts continued to focus on pricing, tariffs, and category performance.
• Strategic priorities showed continuity with further buildout in brand-specific initiatives and digital brand improvements.

Risks and Concerns

• Management highlighted the "dynamic tariff environment" as a risk, especially the increase in Indian tariffs from 10% to 50% due to the Russian penalty. Mitigation strategies include shifting production, optimizing pricing, and leveraging inventory.
• Analysts continually pressed for details on pricing power, tariff mitigation, and category-specific outlooks.
• Hilson stated, "we expect SG&A leverage to extend to the back half of the year due to the reset of incentive comp" and described measured guidance reflecting consumer uncertainty.

Final Takeaway

Signet delivered another quarter of positive same-store sales and raised its full-year outlook, driven by strong performance in core brands, accelerated LGD fashion penetration, and disciplined cost control. Management underscored confidence in navigating tariff headwinds and detailed strategies to optimize assortments, marketing, and supply chain, positioning the company for a robust holiday season and continued margin improvement.

Read the full Earnings Call Transcript