Quarterly performance
Bridal category trends
On its quarterly conference call, Signet elaborated on the trends it was seeing in the bridal category. The jewelry industry’s bridal segment is made up of two parts – engagements and weddings. After seeing a decline during the COVID-19 pandemic, weddings bounced back significantly in FY2023, reaching a 40-year high. This benefited Signet, which delivered strong growth in wedding bands and bridal jewelry.
Engagements, however, remained flat during COVID at pre-pandemic levels but dropped in the low double digits in FY2023 and is expected to decline again at the same level in FY2024. Signet expects FY2024 to be the “trough of engagements” before it sees a return to growth in FY2025 and then normalization in FY2026.
On its call, Signet attributed the reason for these shifts to the fact that engagements typically occur after around three years of dating and that COVID hindered dating through the most part of 2020. So as the company begins to lap that three-year period since COVID began, it expects engagements and engagement ring sales to see a recovery by the end of FY2024 and pick up over the next two years. All said, with roughly 2.8 million engagements and 2.2 million weddings each year, Signet is confident in the resilience of the bridal jewelry business.
Outlook
Looking into FY2024, Signet projects a decline in the mid-single digits for the US jewelry industry due to a combination of macroeconomic and industry-specific factors. Due to the slowing economy and ongoing inflation, the company does not expect a rebound in the lower price point customer. Taking these factors into account, Signet is guiding for revenues of $7.67-7.84 billion in FY2024. EPS for the full year is expected to be $11.07-11.59. For the first quarter of 2024, Signet expects revenue to range between $1.62-1.65 billion.