(Bloomberg) -- Shares of Signet Jewelers Ltd. surged after the company said sales of its engagement jewelry are up, a sign that a crucial part of its business is recovering as more couples agree to wed following a pandemic lull.
The owner of Zales said that the number of units of engagement jewelry it has sold in the current third quarter is positive compared to a year earlier. The stock rose as much as 16% in Thursday trading in New York, the most since Dec. 6, 2022.
“Both the internal and external metrics we track indicate increasing engagements as we head into the back-half of the year,” Signet Chief Executive Officer Gina Drosos said in a statement.
Quarterly revenue at Signet, which also owns Diamonds Direct and Blue Nile, has been falling year-over-year since the beginning of 2023 as shoppers have been slowing their spending on jewelry following a surge during the pandemic. Sales fell 7.6% in the most recent quarter to $1.49 billion, which was roughly in line with what analysts surveyed by Bloomberg had been expecting.
Signet has been banking its revenue recovery on a steady rebound in the number of wedding engagements in the US in the second half of this year. Engagement and bridal jewelry typically represent around half of the company’s annual sales and the post-pandemic dip in couples pledging to tie the knot has dented that business.
Even if engagements do rebound, some analysts remain cautious on the company’s overall outlook since Signet’s mass-market consumers have been more inflation-weary and careful with their spending than wealthier shoppers.
Signet reiterated its guidance for the remainder of the fiscal year, which assumes the number of engagements will increase by up to 5%.
(Updates shares in second paragraph.)
©2024 Bloomberg L.P.