Don't Overlook These Top Retail Stocks After Earnings

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The retail sector looks poised for a continued rebound with Guess (GES - Free Report) and Signet Jewelers (SIG - Free Report) being the most recent retailers to pass their quarterly earnings expectations on Wednesday.

Keeping track of the Zacks Retail and Wholesale sector scorecard 64% of these stocks have surpassed their bottom line expectations this earnings season and now appears to be a good time to buy Guess and Signet Jewelers stock.

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Favorable Q4 Results

Guess shares popped +20% today after the renowned denim jeans and fashion apparel retailer crushed its fourth quarter earnings expectations by 29% and announced a special dividend payout. Earnings rose 15% from the comparative quarter to $2.01 per share versus the Zacks Consensus of $1.55 a share. On the top line, Q4 sales of $891.05 million expanded 9% from a year ago and topped estimates by 4%.

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As for Signet Jewelers, its stock was virtually flat on Thursday but the retailer of diamond jewelry and watches was able to flex its robust bottom line. Fourth quarter  earnings of $6.73 per share soared 21% from $5.52 a share in the comparative quarter and beat expectations by 6%. This was despite quarterly sales of $2.49 billion missing estimates by -2% and dipping from $2.66 billion a year ago.

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Attractive Valuations

Most intriguing about Guess and Signet Jewelers stock is their very reasonable valuations with each having an “A” Zacks Style Scores grade for Value. Notably, GES and SIG trade just under 9X forward earnings which is a pleasant discount to the Zacks Retail & Wholesale market’s 24.3X and the S&P 500’s 21.9X.

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Performance Rebound

After today’s spike, Guess shares have now soared +68% over the last year to easily top the benchmark’s +32% while Signet Jewelers' stock is up a very respectable +21%.

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Dividends  

Getting back to the special dividend announcement by Guess, it will be offering a bonus payout of $2.25 per share payable on May 3 to shareholders on record by April 17. Furthermore, GES has a regular annual dividend yield of 4.62%.

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Although Signet Jewlers scaled back its payout during the pandemic the company still offers a 1.02% annual dividend yield which is near the S&P 500’s 1.29% average.

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Bottom Line

Retailers are starting to benefit from a more stable inflationary environment with Guess and Signet Jewelers being two retail stocks that investors shouldn’t overlook after their favorable Q4 results. That said, it would be no surprise if the strong price performances of Guess and Signet Jewelers stock continued.


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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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