Signet Jewelers Limited Q3 FY2026 earnings call

• Thanked the team for delivering progress in the first year of Grow Brand Love and near-term momentum. - Delivered third consecutive quarter of positive same-store sales and grew adjusted operating income double Q3 of last year. - Merchandise margin expansion offset pressure from tariffs and commodity pricing. - Well-positioned for holiday season with focused assortment aligned to key categories and price points, supported by modernized marketing. - Store refreshes at Kay, Jared, and Zales delivering mid-single-digit sales lift; repositioning of Kay Stores showing positive traction. - Inventory ended at $2.1 billion, down 1% despite gold costs and tariffs; cash at $235 million with total liquidity ~$1.4 billion.

Revenue for the quarter was approximately $1.4 billion with comp growth up 3% to last year. This reflects a 7% expansion in average unit retail. Services grew high single digits, with nearly five consecutive years of positive comps. Gross margin delivered a rate expansion of 130 basis points, led by 80 basis points from merchandise margin expansion, 30 basis points from occupancy leverage, and 20 basis points from distribution efficiencies. The three largest brands, Kay, Zales, and Jared, delivered a combined same-store sales performance of 6% to last year. Fashion AUR grew 8% due to assortment mix to lab-grown diamond (LGD) fashion and higher gold prices. Bridal AUR grew 6% with a growing mix of LGD wedding and anniversary bands.

• Raised full-year same-store sales low guide to -0.2% and maintained high guide at +1.75%, introduced 4Q same-store sales range of +0.5% to -5%. - Raised full-year adjusted operating income low guide by $20 million to $465 million and maintained high guide at $515 million, translating to adjusted EPS range of $8.43 to $9.59 per diluted share. - Introduced 4Q adjusted operating income range of $277 million to $327 million. - Expect $145 to $160 million in capital expenditures for the year.

• Consumer confidence concerns and potential softness in consumer spending. - Uncertainty around tariffs and commodity pricing impacting margins. - Competition and ability to maintain brand equity while managing promotions.

Q: Jeff Lick with Stephens asked about unpacking Q4 EBITDA and Indian tariffs impact.

A: J.K. Symancyk and Joan Hilson said guarded Q4 guidance due to consumer uncertainty and tariff uncertainty, with incentive comp and fixed cost leverage factors. Indian tariffs impact is hard to quantify but team has navigated well for Q4 and future.

Q: Mauricio Serna with UBS asked about Q4 guidance range and promotional environment.

A: Joan Hilson said within Q4 guide range due to historical November-December run rate, J.K. Symancyk said prepared for promotional response in consumer environment.

Q: Jim Sanderson with Northcoast Research asked about 4Q guidance and promotional price position.

A: Joan Hilson said 4Q bridal units down low single digits, J.K. Symancyk said satisfied with price position but vigilant, balancing value messaging and brand equity.