golero/iStock via Getty Images Signet Jewelers Limited ( NYSE: SIG ), is by all accounts, a very cheap stock on many valuation measures . But why? After we highlighted this name for a swing trade back on December 5th , 2023, the stock made its run as predicted, but has largely been sideways ever since. In our opinion, the stock trades at a below-market valuation, given risk and uncertainty over the economy and the health of the consumer.
However, luxury spending really never gets hit until the stock market takes a beating. Inflation weighs, but it has little impact on the wealthy, who make up much of Signet's customer base. Today we check back in on the stock, and with today's pullback following the just-reported Q1 earnings, traders may get an opportunity to reenter this stock in the $90s.
Data by YCharts Signet Chief Executive Officer Virginia C. Drosos summed the progress up nicely in the press release : Our results reflect notable acceleration from a sluggish February to the top half of expectations, with an even stronger May. Compared to the previous quarter, we increased North America engagement unit sales by 400 basis points excluding Digital banners.
Further, customers continue to respond well to our new product offerings and loyalty program, reflected in a meaningful improvement in comparable sales for Fashion since February. We expect continued momentum in the second quarter, leading to a positive same store sales inflection in the second half of Fiscal 25." This is.