By Dhirendra Tripathi
Investing.com – Signet Jewelers stock (NYSE:SIG) rose 2.2% on Thursday after the diamond retailer raised its fourth-quarter forecast for the second time in seven weeks.
The company’s decision to put more money into its ongoing share buyback is also boosting the share price.
The revised outlook came on the back of record holiday season sales, with revenue growth of more than 30% and same store sales 25% higher for the nine weeks ended Jan. 1.
Signet's preliminary total sales for the holiday season came in at $2.4 billion. The company said sales were broad-based with all banners and merchandise categories up double digits. Increased marketing and labor spending supported consumer shopping behavior, it said.
The company said January sales have remained strong in the high single digits, reflecting some shifts due to earlier customer shopping in the quarter. With 10 shopping days remaining in the current quarter, the company said it believes it will deliver a sequential same store sales acceleration from the third to the fourth quarter.
Signet now expects fourth-quarter revenue of $2.77 billion, with same-store sales rising 22%. As per the previous guidance, revenue was estimated to rise to a maximum of $2.48 billion. Adjusted operating income is now seen at $388 million compared to $317 million at the higher end of its previous guidance range.
The company said it will add $500 million to the remaining $184 million available under the existing share repurchase program. Within this, it intends to enter into a $250 million accelerated share repurchase agreement after which $434 million would remain, according to a statement by the company.