Get 40% Off
🤯 Perficient is up a mind-blowing 53%. Our ProPicks AI saw the buying opportunity in March.Read full update

Signet Jewelers shows promising growth with steady capital investment

EditorRachael Rajan
Published 09/21/2023, 03:37 PM
© Reuters.

Signet Jewelers (NYSE:SIG), a prominent player in the Specialty Retail sector, has showcased impressive growth in its Return On Capital Employed (ROCE), a critical financial metric indicative of potential business expansion. The company's ROCE for the trailing twelve months to July 2023 stands at 16%, calculated as Earnings Before Interest and Tax (EBIT) divided by (Total Assets - Current Liabilities). This equates to US$662m divided by (US$6.1b - US$1.9b).

While an ROCE of 16% aligns closely with the industry average of 13%, it represents a significant improvement for Signet Jewelers. Over the past five years, the company's ROCE has grown by 31%, despite the capital employed in the business remaining relatively stable. This suggests that Signet is generating higher returns from the same amount of capital, a clear indication of increased operational efficiency.

Firms that consistently reinvest their earnings at increasing rates of return are often classified as 'compounding machines'. Given Signet Jewelers' ability to continually augment its returns on capital without substantial increases in capital investment, this label appears fitting for the company.

Although details about future growth plans and analyst forecasts for the company are available, they were not disclosed in this report. However, these recent improvements in ROCE signal encouraging signs for potential investors, making Signet Jewelers a company worth monitoring in the Specialty Retail sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.