Signage for Kay Jewelers, a subsidiary of Signet Jewelers Ltd., is displayed on the exterior of a store in New York.
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Signet Jewelers on Tuesday said it agreed to buy the off-mall jewelry chain Diamonds Direct USA for $490 million in cash, in a bid to reach younger shoppers and inch closer to hitting its annual revenue goal of $9 billion.
Signet, which owns jewelry chains Kay Jewelers, Zales and Jared, also raised its outlook for the fiscal third quarter and for the year. It’s the second time Signet has increased its fiscal 2022 forecast in recent weeks. The company said consumer demand is high ahead of the holidays, and it’s not experiencing any supply chain disruptions like many of its peers in the retail industry.
Signet shares jumped more than 5% in early trading on the news.
Signet is benefiting from a pent-up demand among couples who put engagement and wedding plans on pause during the pandemic. As venues reopen and consumers feel comfortable to travel again, the pace of weddings and other celebrations with loved ones is picking back up.
“Customers are showing positive response to our new product launches, and the reduction in government stimulus and customer shift to spending on entertainment and travel are having less impact than we previously anticipated,” said Chief Financial Officer Joan Hilson, in a press release.
Signet made sure to receive holiday products early this year, she added. The company said it uses air freight to transport the vast majority of its merchandise, so it is not dealing with the ongoing ocean freight congestion.
Signet now sees its third-quarter revenue ranging between $1.42 billion to $1.45 billion, up from a previous range of $1.26 billion to $1.31 billion.
For the year, it expects revenue to be between $7.04 billion and $7.19 billion, up from prior guidance of $6.80 billion to $6.95 billion.
Signet said it remains on track to shutter more than 100 locations this year and open 100, primarily under its Banter by Piercing Pagoda banner.
The company expects to complete the Diamonds Direct acquisition in its fourth quarter.
Signet’s stock has tripled year to date. The company has a market value of over $4.5 billion.
Read the full press release from Signet here.