Image source: Signet Jewelers.
What: Shares of Signet Jewelers (NYSE: SIG) slumped on Thursday following the company's second-quarter report. Signet missed analyst estimates on all fronts and slashed its guidance for the full year, sending the stock down 13% by 11:30 a.m.
So what: Signet reported second-quarter revenue of $1.37 billion, down 2.6% year over year and $60 million below the average analyst estimate. Same-store sales slumped 2.3% overall during the quarter, with most of the company's brands suffering declines. Jared same-store sales declined by 7.6%, while Kay registered a 0.5% decline.
Non-GAAP earnings per share (which allow for departures from generally accepted accounting principles) came in at $1.14, down from $1.28 during the prior-year period and $0.31 lower than analysts expected. On a GAAP basis, Signet reported EPS of $1.06, up from $0.78. The company spent $250 million on share buybacks during the quarter, helping to drive up per-share numbers.
In addition to missing analyst estimates, Signet lowered its guidance for the full year.
Data source: Signet Q1and Q2 earnings reports.
Now what: Signet CEO Mark Light blamed a challenging environment for the company's weak results and guidance. "We are disappointed by our Q2 results and market conditions have been challenging particularly in the energy-dependent regions. This has contributed to a downward revision in our annual guidance," he said.
The company also announced that Leonard Green & Partners, a private equity firm, had agreed to purchase $625 million of convertible preferred shares from the company. The proceeds will be used to buy back shares, adding to the company's existing buyback program. These additional buybacks weren't enough to offset lackluster results and a major guidance cut, though, with investors punishing the stock as a result.
A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.
Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.