Telseysaid the Q2 margin decline came as a result of occupancy deleverage on lower sales and the strength of the lower-margin Diamonds Direct bridal business.
Also, technology investments and COVID-related tax abatements at the U.K. business last year weighed on the year-over-year margin performance for the quarter.
The analyst notes Signet’s Q3 operating income outlook is below the prior consensus, meaning that the annual outlook is more weighted to Q4.
The company’s outlook, Telsey thinks, has added an incremental element of risk, especially as visibility of the macro health of the mass consumer heading into the holiday season remains opaque.
Price Action: SIG shares are trading lower by 11.79% at $57.66 on the last check Thursday.
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