Online jewelry shopping has been gaining traction since the COVID-19 pandemic. Furthermore, the rising demand for precious metals amid surging market volatility and rising geopolitical tensions should keep jewelry prices high, benefiting jewelry stocks.
Total spending on jewelry in January 2022 was up 7% versus the same period the prior year. E-commerce sales grew 10% year-over-year, while in-store revenue grew 5% from the prior-year period. This growth in sales is driven by pent-up savings, wage growth, and the reopening of the economy. According to a report by Fortune Business Insights, the global jewelry market size is projected to reach $266.53 billion by 2027, with a 3.7% CAGR.
Given this backdrop, we think it advisable to invest in these fundamentally sound jewelry stocks: Signet Jewelers Limited (SIG), Fossil Group, Inc. (FOSL), and Movado Group, Inc. (MOV). They each possess significant growth potential.
Signet Jewelers Limited (SIG)
SIG in Hamilton, Bermuda, designs and markets diamond jewelry, watches, and other products. The company operates through three segments: North America; International; and Other. SIG operates jewelry stores in malls and off-mall locations under the Kay Jewelers, Kay Jewelers Outlet, Piercing Pagoda, Jared Vault, Zales Jewelers, and Zales Outlet for its North America segment, and H.Samuel and Ernest Jones for its International segment. It operates more than 2,833 stores and kiosks.
Last month, SIG reported its Holiday Season's sales for the nine weeks ended Jan. 1, 2022. It recorded strong holiday performance with more than 30% revenue growth and same-store sales up by more than 25%. SIG reported a $500 million expansion to the remaining $184 million available under its existing share repurchase program. The company announced that it intended to administer a $250 million accelerated share buy-back.
In its fiscal 2022 third quarter, ended Oct. 30, 2021, SIG's sales increased 18.3% year-over-year to $1.54 billion. SIG's operating income grew 124.8% year-over-year to $105.20 million. And the company's earnings per share increased 1200% from its year-ago value to $1.43.
The $2.77 billion consensus revenue estimate for the fiscal 2022 fourth quarter, ended January 31, 2022, represents a 26.9% year-over-year growth versus the same period last year. The consensus $4.99 EPS estimate for its fiscal fourth quarter indicates 20.3% year-over-year growth from the same period in 2021. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of all the trailing four quarters.
Shares of SIG have increased 80.9% in price over the past year and closed Friday's trading session at $81.29.
SIG's POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
SIG has a B grade for Value, Momentum, and Quality. Within the A-rated Fashion & Luxury industry, it is ranked #16 of 65 stocks.
To see additional POWR Ratings (Growth, Stability, and Sentiment) for SIG, click here.
Fossil Group, Inc. (FOSL)
FOSL in Richardson, Tex., designs, develops, and markets fashion accessories in the U.S., Europe, Asia, and internationally. The company's product portfolio includes watches, smartwatches, jewelry, handbags, belts, and sunglasses. FOSL sells its products through company-owned retail stores, department stores, specialty retail stores, e-commerce sites, licensed and franchised FOSSIL retail stores. It operates more than 420 stores worldwide.
Last November, FOSL raised $145.10 million through a senior notes offering. The proceeds are expected to be used to repay outstanding borrowings under the company's term credit agreement and for general corporate purposes.
FOSL's net sales increased 12.9% year-over-year to $491.80 million in its fiscal third quarter, ended Oct. 2, 2021. The company's gross profit rose 12.9% year-over-year to $259.50 million. FOSL's adjusted operating income grew 93.5% year-over-year to $53.80 million. And its adjusted EBITDA improved 44.3% year-over-year to $62.50 million. Its net income attributable to FOSL grew 96.3% year-over-year to $31.40 million. And its earnings per share rose 93.5% year-over-year to $0.60.
The stock has gained 22.5% in price year-to-date and 20% over the past month. FOSL closed Friday's trading session at $12.60.
FOSL has an overall B rating, which translates to Buy in our proprietary rating system. FOSL has a grade of A for Growth and Value. It has a B grade for Quality. Among the 65 stocks in the A-rated Fashion & Luxury industry, it is ranked #18.
Click here to see the additional POWR Ratings for Momentum, Sentiment, and Stability for FOSL.
Movado Group, Inc. (MOV)
MOV designs, markets, and sells watches worldwide. The Paramus, N.J. company operates in two segments: Watch and Accessory Brands; and Company Stores. It offers watches under the Movado, Concord, Olivia Burton, MVMT brands, and licensed brands, such as Lacoste, Tommy Hilfiger, and Coach. The company operates more than 47 retail outlet locations.
In the fiscal third quarter, ended Oct. 31, 2021, MOV's net sales increased 28.2% year-over-year to $217.75 million. Its gross profit rose 35.8% from the prior-year quarter to $125.57 million. The company's operating income increased 68.3% year-over-year to $42.22 million. Its net income attributable to MOV grew 111.8% year-over-year to $31.41 million, and its net income per share rose 111.1% year-over-year to $1.33.
The $191 million consensus revenue estimate for its fiscal fourth quarter, ended January 31, 2022, represents 7.1% year-over-year growth. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
Over the past year, shares of MOV gained 66.9% in price and closed Friday's trading session at $38.33.
The company has an overall B rating, which translates to Buy in our proprietary rating system. MOV has an A grade for Quality and a B for Value and Sentiment. Among the 65 stocks in the A-rated Fashion & Luxury industry, it is ranked #13.
Click here to see the additional POWR Ratings for Momentum, Growth, and Stability for MOV.
SIG shares were trading at $80.67 per share on Monday morning, down $0.62 (-0.76%). Year-to-date, SIG has declined -7.10%, versus a -7.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.3 Jewelry Stocks to Watch This Valentine's Day appeared first on StockNews.com