How did Signet Jewelry's revenue and expenses shift in Q4 2025?

Signet Jewelers Ltd (SIG) experienced a decline in revenue and a significant drop in net income in Q4 2025 compared to the previous year, despite exceeding revenue estimates and showing strong strategic initiatives.

1. **Revenue Shift**:
- SIG's revenue for Q4 2025 was $2.4 billion, surpassing the estimated $2.33 billion. This reflected a 5.8% decrease from the previous year, indicating a challenging retail environment.
- The company's full-year revenue for 2025 was expected to be $6.68 billion, with earnings per share (EPS) of $3.13.
2. **Net Income Shift**:
- The net income in Q4 2025 was impacted, with the company reporting an operating income of $152.6 million, a significant drop from $416.3 million in the previous year.
- Adjusted EPS for the quarter was $6.62, slightly below the forecast of $6.67 and a minor decrease from $6.73 in Q4 FY24.
3. **Expenses and Margin Shift**:
- Gross margin decreased to $1.0 billion, down approximately $80 million from Q4 FY24. This was offset by a slight expansion in gross merchandise margin.
- SG&A expenses were adjusted down to $638 million, representing a decrease of $32 million.
- The adjusted gross margin decreased by 70 basis points, affected by fixed cost deleverage and year-end adjustments in digital brands.
4. **Strategic Initiatives**:
- Despite the revenue dip, SIG focused on brand loyalty and innovation to drive future growth.
- The company is restructuring its real estate portfolio, planning to close underperforming stores and reposition others.
- SIG anticipates a measured consumer environment and is undergoing a significant reorganization, including a 30% reduction in senior leadership.

In conclusion, while SIG showed resilience with a revenue beat and strong strategic moves, it faced challenges that affected net income and margins, necessitating a strategic shift towards brand love, innovation, and operational efficiency.