Signet shares hit 22-year high on holiday sales
Shares of jewelry seller Signet soar to nearly 22-year high after strong holiday sales in US
Signet Jewelers Ltd.'s shares soared to their highest point in nearly 22 years Tuesday after the jewelry retail chain reported strong holiday sales.
THE SPARK: The owner of the Kay Jewelers and Jared The Galleria of Jewelry chains said revenue from stores open at least a year increased 3.3 percent for the nine weeks through Dec. 29.
This is considered a key indicator of a retailer's financial performance as it strips away the impact of recently opened or closed stores.
The company's forecast for its fiscal year, which ends on Feb. 2, was also in line with Wall Street analysts' expectations.
THE BIG PICTURE: Signet and some other jewelry chains have struggled with a slow sales recovery in the wake of the recession, as many consumers cut back on spending.
The Bermuda-based company said that the sales during the holidays were strong in the U.S., where it has more than 1,300 stores. Sales declined in the U.K., where Signet owns about 520 stores, but CEO Mike Barnes said trends have improved after the holidays.
THE ANALYSIS: Citi analyst Oliver Chen said that Signet's new products, improved customer service, investment in marketing and customer finance programs have paid off. He reiterated a "Buy" rating and target price of $62 on its stock.
SHARE ACTION: Shares jumped $4.74, or 8.8 percent, to $58.57 by early afternoon, peaking earlier at $59.37. The company's stock has been steadily climbing since 2009, but its shares have not touched this high since May 1991.
