Investors Bullish on Zale’s Impact on Signet

Signet Jewelers Ltd. likes what it’s getting out of its May 2014 acquisition of Zale Corp., and apparently investors do, too. With eight months of Zale ownership behind it, the retailer behind such brands as Kay and Jared ended the year with a fourth-quarter earnings “beat” and revenues that fell just short of analysts’ consensus estimates, boosting its sales for the year 36.3 percent to $5.74 billion, with an expected decline in gross margin attributable to Zale’s lower margin operations one of the few drawbacks to come out of the deal. Shares closed at $135, up 6 percent in New York Stock Exchange trading, and reached a 52-week high of $135.98 as afternoon trading began. Mark Light, chief executive officer, told analysts on a Thursday morning conference call that the firm appears on track to recognize about 20 percent of the $150 million to $175 million in synergies expected from the deal by the end of the current fiscal year with another 40 percent to be realized next year. Of the total amount, “roughly 20 percent will be achieved from expense reductions, 30 percent from repair services and brand cross-selling and 50 percent from supply chain and purchasing initiatives,” Light said. In the three months

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