Zales Owner Signet Drops Most in Two Years After Cutting Outlook

Signet Jewelers Ltd., owner of the Kay and Zales chains, fell the most in more than two years after cutting its outlook for sales, warning that inflation is eroding discretionary spending.

Second-quarter sales will be approximately $1.75 billion, Signet said Tuesday, down from a June forecast of as much as $1.82 billion. Signet sees revenue of $7.6 billion to $7.7 billion for the fiscal year, a cut from previous guidance of up to $8.25 billion. The company also announced it’s acquiring online jewelry retailer Blue Nile Inc. for $360 million in cash.

Shares of Signet, which had revenue ...