investing.com - Signet Jewelers Ltd. (NYSE: SIG) rose Thursday as the company posted a stronger-than-expected second quarter profit and announced an acquisition that could help the company further boost its digital capabilities.
Signet had second quarter earnings of $1.33 a share on revenue of $1.4 billion, surpassing analysts’ expectations by $0.29 and $70 million, respectively.
Same store sales increased by 1.4% in the quarter, driven by eCommerce platform improvements, Mother's Day performance and timing, and effective marketing initiatives. E-commerce sales rose 18.1% to $82.2 million in the second quarter.
Signet reiterated its fiscal 2018 guidance for same-store sales to decline by a low-to-mid-single digit percentage and EPS of $7.00 to $7.40. Analysts are looking for same-store sales to decrease by 4.8% and EPS of $6.69
Meanwhile, Signet also announced that it would expand its digital capabilities through the acquisition of R2Net for $328 million in an all-cash transaction.
R2Net is the owner of the JamesAllen.com and Segoma Imaging Technologies businesses. Commenting on the acquisition, CEO Virginia Drosos stated:“The James Allen brand and R2Net’s technologies and innovative approach present a unique opportunity to rapidly enhance our digital capabilities and create a distinctive customer shopping experience which more seamlessly integrates our digital and physical retail platforms.”
The transaction is expected to close in the third quarter. Signet anticipates the transaction to be accretive in the first full year of operations.
Signet's shares were up 17% in afternoon trading. Even with Thursday's advance share values are on the bottom-end of their 52-week range of $46.09 - $101.46. Shares are down 34% year-to-date.
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