With the global pandemic upending traditional retailer traffic, consumers are shopping for just about everything online — including jewelry. In turn, this is good news for jewelry stocks.
Over at Sotheby’s, for example, global online jewelry sales have soared above expectations. In fact, about two months ago, the company made $2 million from closing a sale of fine jewels — surpassing pre-sale estimates, with 91% of lots sold.
On the other hand, though, at Signet Jewelers (NYSE:SIG), sales fell 40.5% year-over-year during the first quarter of fiscal year 2021. However, thanks to an e-commerce shift, online sales shot 6.7% higher in the quarter.
So after suffering from the pandemic, many jewelry retailers are finding bigger riches online. Some of the top ones include:
- Signet Jewelers (SIG)
- Tiffany & Co. (TIF)
- Etsy Inc. (NASDAQ:ETSY)
Therefore, with all of that in mind, let’s take a closer look at these three jewelry stocks.
Hot Jewelry Stocks: Signet Jewelers (SIG)
After peaking at $31 in early 2020, Signet Jewelers plummeted to a low of $5.60 per share. Nearly all consumers stopped showing up to the stores, and cut back on spending overall. In turn, that would explain why total sales were down 40.5% to $852.1 million. Total same-store sales even fell 38.9% YOY.
However, online sales still showed solid growth of 6.7% to $164.7 million, as the company accelerated its online growth.
In fact, according to Virginia C. Drosos, CEO, the company has:
“…further adapted our eCommerce operating model to serve customers during stay-at-home restrictions with new technology, virtual consultation and selling solutions. We have moved forward in our digital journey while also making significant progress controlling costs, prioritizing investments to drive sustainable growth, and preserving liquidity.”
Moreover, to drive costs lower through “footprint optimization”, Signet will not reopen 230 stores in the U.S. and UK. Also, they will close another 150 that operate under the Zales, Jared, and Kay Jewelers names by the end of fiscal 2021.
So collectively, I’d like to see a near-term test of $18 from a current price of $10.22.
Tiffany & Co. (TIF)
Since June 1, shares of Tiffany & Co. slipped from a high of $128.77 to a low of $111.27. Now, it’s back up to $122.67, and slowly showing signs of recovery. From here, I believe the stock can make a run back to $127.50 in the immediate-term — and here’s why.
In its most recent quarter, the company posted a 45% decline in global sales to $556 million, while same-store sales fell 44%. Additionally, its net loss was $65 million, or 53 cents a share compared to net income of $125 million, or $1.03 per share during the same time last year.
However, the company did see watch as online sales more than doubled YOY. That said, they stated that this figure reflects “significant increases across every region, and bringing our global e-commerce sales up to approximately 15% of our total net sales for the fiscal year-to-date May period versus the 6% that global e-commerce sales represented in each of the last three full fiscal years.”
Therefore, for this reason, I think TIF stock can make a run back over $127 per share in the near future.
Etsy has become one of the most explosive stocks on the market, soaring from a March 2020 low of $29.95 to a 52-week high of $115.50. More than likely, there’s even more upside ahead, as consumers flock to the online store for everything from jewelry and clothes to home décor. That said, from here, I believe the stock could run to $150 in the near-term.
Overall, the company should also benefit as consumers shop strictly online. And growth doesn’t appear to be an issue for Etsy whatsoever.
In its most recent quarter, revenue jumped 34.7% YOY to $228.1 million and worldwide gross merchandise sales (GMS) increased 32.2% to $1.35 billion. Even Goldman Sachs has touted the ETSY stock as “significant opportunity to capitalize on the surge in e-commerce adoption as traditional retail remains less attractive to consumers.”
Moreover, the demand for online shopping — “which Baird estimated could represent a $200 billion annual tailwind — could be a permanent shift in consumer behavior.” And if that comes true, then Etsy and ETSY stock are going to be climbing even higher in the future.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.