No Wedding Bells For Signet's Bridal Segment: Analyst Foresees Slow Recovery Until Late 2024

Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Signet Jewelers Ltd SIG with a price target of $71.

Signet will report second-quarter results on Thursday, August 31, before the market opens.

For the quarter, the analyst continues to look for EPS of $1.37 versus the consensus estimate of $1.45, and total sales to decrease 11.1% Y/Y to $1.56 billion, as compared to the consensus forecast of $1.58 billion.

SIG's operating expense and capital expenditures for the year are expected to weigh on operating margin by about 100 basis points, resulting in a range of 8.9% - 9.2%, temporarily below its double-digit target, the analyst said.

SIG's outlook reflects continued pressure on the U.S. jewelry industry, with an outsized impact on the mass or middle-income consumer, including increased pressure in Q2 based on quarter-to-date trends through early June and a weaker-than-expected Mother's Day, added the analyst.

The analyst will remain cautious near-term given ongoing uncertainties in the consumer spending environment as macro headwinds persist in 2023 (FY24).

SIG's exposure to bridal which is significant (~50%) is not expected to recover until 4QF24 at the earliest, observed the analyst.

Price Action: SIG shares are trading lower by 3.29% at $68.47 on the last check Friday.