What happened

Shares of Signet Jewelers (SIG 0.97%), a company that owns well-known chains like Zales, Kay, and Jared, soared on Thursday after releasing financial results for the first quarter of its fiscal 2022. In short, the company is growing sales dramatically and earning huge profits, exciting its shareholders. The stock finished up 14% for the session and even hit a 52-week high over $74 per share earlier in the day.

So what

In the first quarter, Signet had sales of almost $1.7 billion. This was obviously better than the first quarter last year, considering brick-and-mortar outlets were closed for some of the quarter due to the pandemic. But the quarterly sales were up 18% from the same quarter two years ago. That's strong growth for a mature jewelry business.

A woman is pleasantly surprised by what she sees on a computer screen.

Image source: Getty Images.

Signet CEO Gina Drosos provided more context in the first-quarter conference call: "This is significant because two years ago, we had 467 more stores than we have today." Significantly higher sales from significantly fewer stores resulted in operating leverage. For the quarter, Signet Jewelers had earnings of $2.23 per share, compared to a loss of $0.35 two years ago.

Now what

With strong sales and even stronger profitability, management felt that its quarterly dividend could be reinstated. The company will pay a second-quarter dividend of $0.18 per share on Aug. 27. For perspective, that's about a 1% dividend yield on an annualized basis from where the stock trades today.

However, Signet Jewelers' shareholders should keep in mind that management is less certain about sales in the second half of the year. Right now, it believes it's benefiting from stimulus money and few opportunities to spend it. As more of the population is vaccinated, it believes the current surge in jewelry spending will be mitigated. 

That said, Signet Jewelers did raise its full-year fiscal 2022 guidance. Previously it was guiding for revenue of $6 billion to $6.14 billion. Now it believes it will generate revenue of $6.50 billion to $6.65 billion -- a healthy raise in guidance that bodes well for shareholders.