Signet’s stock surges after much narrower-than-expected loss, upbeat sales outlook

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Shares of Signet Jewelers Ltd. surged 5.2% in premarket trading Thursday, after the diamond jewelry retailer reported a much narrower-than-expected loss and revenue that topped forecasts, although same-store sales missed. The net loss for the quarter to Aug. 1 widened to $90.0 million, or $1.73 a share, from $44.3 million, or 86 cents a share, in the year-ago period. Excluding non-recurring items, Signet swung to a loss of $1.13 from earnings per share of 51 cents, compared with the FactSet consensus for a loss of $2.07. Revenue fell 34.9% to $888.0 million, but beat the FactSet consensus of $788.5 million, while same-store sales declined 31.3% to miss expectations of a 28.9% decline. “While same store sales were down 31.3% in the quarter given store closures, same store sales turned positive in late Q2 as we reached scale on store re-openings while driving high double-digit growth in eCommerce,” said Chief Executive Virginia Drosos. “Momentum has continued into Q3 with preliminary August same store sales of 10.9% and eCommerce growth of 65.2%.” The company increased the target savings from its cost-cutting efforts to $285 million from $225 million. The stock has dropped 14.5% year to date through Wednesday, while the S&P 500 has gained 10.8%.
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