Signet lines up $300m stock buyback program

Signet-stock.jpg

Jewellery giant says repurchasing shows “confidence in the future”.

Signet Jewelers, the American company that owns and operates Signet UK and its H Samuel and Ernest Jones stores, has approved a $300 million (£186m) stock repurchasing program.

Signet has said that the buyback of its shares shows confidence in the future of the company.

Mike Barnes, chief executive of Signet said: "The share repurchase program reflects the continued confidence we have in the strength of the business, our ability to invest in growth initiatives and our commitment to build value for long-term shareholders.”

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Typically companies launch buyback share programs to help boost share prices and generate confidence among traders and shareholders. Such programs also provide companies with greater control over their share price.

It has been reported that a number of organisations are launching or expanding their stock-buyback programs as the market continues to be somewhat volatile.

Today, Signet’s UK share price is £27.60, while charts show its price has been on the climb. Signet Jewelers has recently been upgraded by analysts at Zacks Investment Research from a ‘neutral’ rating to a ‘outperform’ rating.

Zacks Investment Research yesterday said: “Signet Jewelers has been a bottom fisher’s delight for the past couple of weeks. But has the opportunity gone? This is still showing a great earning trend but thanks to late-summer market woes the valuations are great too.”

Zacks carried out a specialist stores report and ranks Signet as one of the top five companies measures by relative performance. The analysis was compiled based on trading activity to identify stocks that have potential to outperform.

In the UK Signet operates high street jewellery chains Ernest Jones, H Samuel and Leslie Davies. In August the company announced its results for the 26 weeks to July 31 (H1). The total UK sales for Signet were down 0.6% at constant exchange rates and total same-store sales increased by 0.8%, compared to a decline of 0.4% in the 26 weeks ended July 31 last year.

The figures revealed that the UK arm of Signet is still struggling after results released earlier this year that showed a similar slowing in trade. A combined 10 stores were closed in H1, bringing Signet’s UK total of stores to 535.

 

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