Signet Jewelers Stock Just Popped. Is It a Buy for 2026?

Signet Jewelers (NYSE: SIG), the world's largest retailer of diamond jewelry, has been a volatile stock over its history, but the company began a new chapter a little more than a year ago when J.K. Symacyk joined the company as CEO.

Shortly after he took over, the company launched its Grow Brand Love strategy, which is focused on investing and growing its core banners, a full-price marketing strategy, and simplifying the brand portfolio.

With fiscal 2026 now complete, which ended in January, the strategy appears to be paying off. Signet finished the year with a same-store sales increase of 1.3%, its first year of positive growth in four years, as sales boomed during the pandemic and then gave back some of those gains in the subsequent years.

Investors were pleased with the fourth-quarter earnings report, sending the stock up 13.7% on Thursday. Same-store sales were down 0.7% in the fourth quarter, and adjusted earnings per share slipped from $6.62 to $6.25, beating the consensus at $6.11.

Management offered strong guidance for the first quarter, calling for same-store sales growth of 0.5% to 2.5%. Its forecast for the full year was more uncertain, calling for same-store sales growth of -1.25% to 2.5%, and adjusted earnings per share of $8.80-$10.74, which compares to $9.60 in the year just completed, though that guidance doesn't take into account any potential share buybacks. In fiscal 2026, Signet repurchased 3.1 million shares, reducing total shares outstanding by 6%.

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What's in store for Signet in 2026

Fiscal 2027 marks the second year of Signet's Grow Brand Love strategy, and the company is focused on streamlining its brand portfolio in order to drive efficiency, cut costs, and simplify its product offering for its customers.

As part of that move, the company is transitioning its portfolio from eight brands to four core banners, Kay, Zales, and Jared as brick-and-mortar chains, and Blue Nile as an online luxury platform.

To execute that strategy, Signet is closing the jamesallen.com site, and James Allen will instead be a proprietary collection within the Blue Nile website. In an interview with the Motley Fool, Signet CFO Joan Hilson said that comparable sales had been running negative for some time at James Allen and that folding it into Blue Nile would drive efficiency, create synergies, and allow Signet to capitalize on the brand value.

Similarly, the company is consolidating Rocksbox within Kay, making it a branded collection, and is folding Diamonds Direct within Jared.

Is Signet a buy?

The jewelry retailer is navigating a challenging environment in 2026 as discretionary spending has generally been weak, and gold prices are elevated as tariffs remain in place, though the company said that headwinds from tariffs would decrease from a year ago.

Signet competes in a mature category, but the company is finding success with its push into lab-grown diamonds, and CEO J.K. Symancyk said both lab-grown and natural diamonds are growing in the industry. Signet reported 7% avereage unit retail in 2026, with growth in both bridal and fashion, showing the company is benefiting from higher prices. That trend is likely to continue into 2026.

At the midpoint of Signet's EPS guidance, the company is calling for $9.77, which represents just 2% growth. However, Signet is likely to earn more than that due to share buybacks.

Based on earnings, the stock now trades at a price-to-earnings ratio of 9, based on that guidance, and it brought in $425 million in free cash flow last year, giving it plenty of room to return cash to shareholders and invest in the business. Signet also raised its dividend by nearly 10% to $0.35 per quarter.

Overall, the stock still looks undervalued and should deliver earnings growth through a combination of driving efficiencies in the business and share buybacks.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.