Signet Jewelers Limited (“Signet”) (NYSE:SIG), the world's
largest retailer of diamond jewelry, today announced its results
for the 13 weeks ended May 4, 2019 (“first quarter Fiscal
2020”).
Summary:
First Quarter Fiscal 2020
- Same store sales ("SSS") down 1.3%1,
with eCommerce sales up 5.3%
- GAAP diluted earnings per share ("EPS")
of $(0.35) and non-GAAP diluted EPS of $0.082
- Net cash provided by operating
activities of $105.4 million in the first quarter, an increase of
$77.5 million versus prior year quarter
- Free cash flow of $80.8 million in the
first quarter, an increase of $79 million versus prior year
quarter
Fiscal 2020 Guidance
- Fiscal 2020 same store sales down 2.5%
to down 1.5% and total sales of $6.0 billion - $6.06 billion
- Fiscal 2020 GAAP operating income of
$190 - $225 million and non-GAAP operating income of $260 - $280
million2
- Fiscal 2020 GAAP diluted EPS of $1.88 -
$2.38 and non-GAAP diluted EPS of $2.88 - $3.172
Q1 Fiscal2020
Q1 Fiscal2019
Revenue ($ in millions) $ 1,431.7 $ 1,480.6 Same store sales %
change1 (1.3 )% (0.1 )%
GAAP
Operating income (loss)
$ (2.6 ) $ (574.2 ) Operating income (loss) as % of sales (0.2 )%
(38.8 )% GAAP Diluted EPS $ (0.35 ) $ (8.48 )
Non-GAAP(2)
Non-GAAP operating income (loss)
$ 24.2 $ 24.1 Non-GAAP operating income (loss) as % of sales 1.7 %
1.6 % Non-GAAP Diluted EPS $ 0.08 $ 0.10 (1) Same store
sales include physical store sales and eCommerce sales. (2) See
non-GAAP reconciliation page.
“We delivered operating profit above our guidance range and
strong free cash flow in the first quarter, with same store sales
at the low end of our guidance,” said Signet Chief Executive
Officer Virginia C. Drosos. “Given the sales trends we experienced
year to date and softening retail traffic, we are narrowing our
Fiscal 2020 guidance while continuing to expect strong progress on
cost savings across our business. We remain focused on executing
our Path to Brilliance transformation initiatives to improve the
trajectory of our same store sales and drive higher profitability
over the long-term.”
Change from previous year
First Quarter
Fiscal 2020
Samestoresales
Non-samestore
sales,net
Total salesat
constantexchangerate
Exchangetranslation impact
Totalsales as reported
Totalsales (in millions) Kay (1.4 )% — % (1.4
)% na (1.4 )% $ 574.8 Zales (1.4 )% (3.0 )% (4.4 )% na (4.4 )% $
285.0 Jared (2.0 )% (2.7 )% (4.7 )% na (4.7 )% $ 255.0 Piercing
Pagoda 13.5 % (2.5 )% 11.0 % na 11.0 % $ 82.6 James Allen (2.4 )% —
% (2.4 )% na (2.4 )% $ 52.0 Peoples (4.9 )% (2.0 )% (6.9 )% (3.8 )%
(10.7 )% $ 41.7 Regional banners (11.0 )% (51.4 )% (62.4 )% (0.2 )%
(62.6 )% $ 9.2
North America segment (0.9 )%
(2.5 )% (3.4 )% (0.1 )%
(3.5 )% $ 1,300.3 International
segment (5.2 )% (2.2 )% (7.4
)% (6.0 )% (13.4 )% $
111.5 Other(1) $ 19.9
Signet (1.3 )%
(1.3 )% (2.6 )% (0.7 )%
(3.3 )% $ 1,431.7 (1) Includes
sales from Signet’s diamond sourcing initiative.
First quarter Fiscal 2020
First quarter Fiscal 2019 GAAP Operating income (loss) in
millions $ % of sales $
% of sales North America segment $ 48.1 3.7 %
$ (537.3 ) (39.9 )% International segment (8.0 ) (7.2 )% (7.6 )
(5.9 )% Other (42.7 ) nm (29.3 ) nm Total GAAP operating income
(loss) $ (2.6 ) (0.2 )% $ (574.2 ) (38.8 )%
First quarter Fiscal 2020 First
quarter Fiscal 2019 Non-GAAP Operating income (loss) in
millions $ % of sales $ %
of sales North America segment $ 47.6 3.7 % $ 52.4 3.9 %
International segment (8.0 ) (7.2 )% (7.6 ) (5.9 )% Other (15.4 )
nm (20.7 ) nm Total Non-GAAP operating income (loss) $ 24.2 1.7 % $
24.1 1.6 %
Signet Path to Brilliance Expected Savings and Restructuring
Costs
In Fiscal 2020, the company expects net cost savings of $70
million - $80 million. The company continues to expect its
transformation plan to deliver $200 million - $225 million of net
cost savings in Fiscal Years 2019-2021, inclusive of the $85
million achieved in Fiscal 2019.
In Fiscal 2020, the company’s preliminary estimate for pre-tax
charges related to cost reduction activities ranges from $55
million - $70 million, of which $46 million - $58 million are
expected to be cash charges. The company's estimate for pre-tax
charges in Fiscal Years 2019 - 2021 is a range of $200 million -
$220 million, of which $105 million - $115 million are expected to
be cash charges.
In Fiscal 2020, the company expects to close approximately 150
stores, with 44 closures in the first quarter and limited new store
openings for the full year. By the end of Fiscal 2020, the company
expects it will have reduced its store base by 13% over the
three-year period from Fiscal Years 2018 - 2020.
First Quarter 2020 Financial Highlights
Signet's total sales were $1.43 billion, down 3.3%, in the 13
weeks ended May 4, 2019 on a reported basis and down 2.6% on a
constant currency basis. Total same store sales performance
decreased 1.3% year-over-year, inclusive of: 1) a 40 bps
unfavorable impact related to a timing shift of service plan
revenue recognized and 2) a favorable impact of 35 bps due to a
planned shift in timing of promotions at Jared.
North America payment plan participation rate, including both
credit and leasing sales, was 50.0% versus 51.1% in the prior year
first quarter.
eCommerce sales were $154.3 million, up 5.3% year over year.
eCommerce sales accounted for 10.8% of sales, up from 9.9% of total
sales in the prior year quarter. Brick and mortar same store sales
declined 2.0%.
By operating segment:
North America
- North America same store sales
decreased 0.9%, inclusive of: 1) a 45 bps unfavorable impact
related to a timing shift of service plan revenue recognized and 2)
a favorable impact of 40 bps due to a planned shift in timing of
promotions at Jared (which had a favorable impact of 190 bps on
Jared's same store sales). Average transaction value ("ATV")
increased 1.3% and the number of transactions decreased 2.3%.
- eCommerce sales increased 6.6%, and
brick and mortar same store sales decreased 1.8%. Excluding James
Allen, eCommerce sales increased 12.6%.
- The percentage of sales from new
merchandise increased during the quarter, but this performance was
somewhat offset by declines in legacy collections. Bridal sales
were down slightly on a same store sales basis. Flagship brands The
Enchanted Disney Fine Jewelry® collection, Vera Wang Love®
collection, Neil Lane® collection, and Leo® collection performed
well, while the legacy Ever Us® collection and non-branded bridal
declined. Fashion category sales increased, led by on-trend
collections including gold fashion jewelry, Disney fashion jewelry,
and the Love + Be LovedTM collection, somewhat offset by declines
in legacy fashion collections including LeVian®. The Watches and
Other product categories declined, with Other driven by a strategic
reduction of owned brand beads, as well as declines in
Pandora®.
International
- International same store sales
decreased 5.2%. ATV increased 0.2% and the number of transactions
decreased 5.4%. Sales declined across categories and continued to
reflect a difficult operating environment in the UK.
GAAP gross margin was $499.4 million, or 34.9% of sales, up 220
bps versus the prior year quarter. Factors impacting gross margin
rate include: 1) a favorable 320 bps impact related to credit
outsourcing; 2) an unfavorable 65 bps impact related to higher
diamond sales to third parties from our Botswana operations; and 3)
an unfavorable 25 bps impact related to a timing shift of revenue
recognized on service plans.
SGA was $475.2 million, or 33.2% of sales, compared to $482.8
million, or 32.6% of sales in the prior year. Increases in SGA
included: 1) a $16 million increase in credit costs related to the
transition to an outsourced credit model, and 2) higher advertising
expense. These increases were offset by: 1) lower store staff costs
primarily due to closed stores, 2) transformation cost savings; and
3) timing shifts of certain corporate expenses.
GAAP operating income (loss) was $(2.6) million or (0.2)% of
sales, compared to $(574.2) million, or (38.8)% of sales in the
prior year first quarter. The operating income change reflected: 1)
a prior year goodwill and intangible asset impairment charge of
$448.7 million, 2) a prior year loss of $143.1 million related to
non-prime receivables classified as held for sale; and 3) a $20.3
million year over year increase in restructuring charges related to
the Path to Brilliance transformation plan. Excluding these
charges, the operating income change was primarily driven by an $11
million favorable impact related to the outsourcing of credit,
mostly offset by increases in advertising.
Non-GAAP operating income was $24.2 million, or 1.7% of sales,
compared to $24.1 million, or 1.6% of sales in prior year first
quarter. Non-GAAP operating income excluded $26.8 million in
restructuring charges related to the Path to Brilliance
transformation plan in the current year quarter. The non-GAAP
operating income change was primarily driven by an $11 million
favorable impact related to the outsourcing of credit, mostly
offset by increases in advertising.
Income tax benefit was $1.5 million compared to income tax
benefit of $85.9 million in the prior year first quarter. The
current quarter GAAP effective tax rate was primarily driven by
pre-tax earnings mix by jurisdiction. On a non-GAAP basis, income
tax expense was $2.8 million for an effective tax rate of 18.3%,
primarily driven by pre-tax earnings mix by jurisdiction.
GAAP EPS was $(0.35), including a $0.43 charge related to the
Path to Brilliance transformation plan. Excluding this charge, EPS
was $0.08 on a non-GAAP basis.
GAAP and non-GAAP EPS in the quarter are based on net income
(loss) available to common shareholders as the preferred shares are
anti-dilutive and excluded from the ending share count due to the
level of first quarter net income (loss).
Balance Sheet and Statement of Cash Flows
Net cash provided by operating activities was $105.4 million in
the first quarter and free cash flow was $80.8 million. Free cash
flow benefited from significantly lower use of cash for inventory
versus the prior year quarter.
Cash and cash equivalents were $195.1 million, compared to
$153.9 million at the prior year quarter-end. Total debt, including
short-term and long-term debt and excluding operating lease
liabilities, was $682.7 million, compared to $752.0 million at the
prior year quarter-end.
Financial Guidance:
Fiscal 2020 Same store sales down 2.5%
- down 1.5% Total sales $6.0 billion - $6.06 billion GAAP operating
income $190 million - $225 million Non-GAAP operating income $260
million - $280 million GAAP diluted EPS $1.88 - $2.38 Non-GAAP
diluted EPS $2.88 - $3.17 Weighted average common shares -
basic 51.8 million GAAP tax rate 11.0% - 14.0% Non-GAAP tax rate
16.0% - 17.0% Capital expenditures $135 million - $155 million Net
selling square footage down 2.5% - down 3.5%
The above Fiscal 2020 guidance reflects the following
assumptions:
- Same store sales guidance includes an
unfavorable impact of 20 bps related to a timing shift of service
plan revenue recognized.
- Expected unfavorable $190 million
impact on revenues due to store closings.
- Company plans to close approximately
150 stores in Fiscal 2020 and open 20-25 stores, for a net selling
square footage decline of approximately 2.5% - 3.5%.
- Credit outsourcing is expected to have
an approximately flat year-over-year impact on operating
profit.
- Transformation program net savings goal
of $70 million - $80 million.
- Pre-tax charges of $55 million - $70
million related to the transformation plan.
- Interest expense of $42 million - $46
million.
- For purposes of calculating both GAAP
and non-GAAP EPS, the company expects to use the basic share count
for the first three quarters and the full year, and the diluted
share count for the fourth quarter.
- Non-GAAP EPS guidance of $2.88 - $3.17
excludes restructuring charges associated with the transformation
plan.
Q2 2020 Same store sales down
3.5% - down 2.5% Total sales $1.35 - $1.37 billion GAAP operating
income $15 million - $25 million Non-GAAP operating income $35
million - $40 million GAAP diluted EPS ($0.10) - $0.07 Non-GAAP
diluted EPS $0.23 - $0.30 Weighted average common shares -
basic 51.8 million GAAP tax rate 16.0% - 19.5% Non-GAAP tax rate
16.5% - 17.5%
The above Q2 2020 guidance reflects the following
assumptions:
- Same store sales guidance includes an
unfavorable impact of 35 bps related to a planned shift in timing
of a promotion into the first quarter from the second quarter in
the prior year.
- Same store sales guidance includes an
unfavorable impact of 45 bps related to a timing shift of service
plan revenue recognized.
- Expected unfavorable $50 million impact
on revenues due to store closings.
- Credit outsourcing is expected to have
a $7 million to $9 million negative year over year impact on
operating profit.
- Pre-tax charges of $15 million - $20
million related to the transformation plan.
- Interest expense of $11 million - $12
million.
- GAAP and non-GAAP EPS guidance is
calculated by subtracting the preferred dividend from net income
and applying basic share count.
- Non-GAAP EPS guidance of $0.23 - $0.30
excludes restructuring charges associated with the transformation
plan.
Quarterly Dividend:
Signet’s Board of Directors declared a quarterly cash dividend
of $0.37 per share for the second quarter of Fiscal 2020, payable
on August 30, 2019 to shareholders of record on August 2, 2019,
with an ex-dividend date of August 1, 2019.
Conference Call:
A conference call is scheduled today at 8:30 a.m. ET and a
simultaneous audio webcast is available at www.signetjewelers.com.
The call details are:
Toll Free Dial-in: 833-245-9657
International Dial-in: +1 647-689-4229
Access code: 4673015
A replay and transcript of the call will be posted on Signet's
website as soon as they are available and will be accessible for
one year.
About Signet and Safe Harbor Statement:
Signet Jewelers Limited is the world's largest retailer of
diamond jewelry. Signet operates approximately 3,300 stores
primarily under the name brands of Kay Jewelers, Zales, Jared,
H.Samuel, Ernest Jones, Peoples, Piercing Pagoda, and
JamesAllen.com. Further information on Signet is available at
www.signetjewelers.com. See also www.kay.com, www.zales.com,
www.jared.com, www.hsamuel.co.uk, www.ernestjones.co.uk,
www.peoplesjewellers.com, www.pagoda.com, and
www.jamesallen.com.
This release contains statements which are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements, based upon management’s
beliefs and expectations as well as on assumptions made by and data
currently available to management, appear in a number of places
throughout this document and include statements regarding, among
other things, Signet’s results of operation, financial condition,
liquidity, prospects, growth, strategies and the industry in which
Signet operates. The use of the words “expects,” “intends,”
“anticipates,” “estimates,” “predicts,” “believes,” “should,”
“potential,” “may,” “forecast,” “objective,” “plan,” or “target,”
and other similar expressions are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance and are subject to a number of
risks and uncertainties, including, but not limited to: our ability
to implement Signet's transformation initiative; the effect of US
federal tax reform and adjustments relating to such impact on the
completion of our quarterly and year-end financial statements;
changes in interpretation or assumptions, and/or updated regulatory
guidance regarding the US federal tax reform; the benefits and
outsourcing of the credit portfolio sale including technology
disruptions, future financial results and operating results;
deterioration in the performance of individual businesses or of the
company's market value relative to its book value, resulting in
impairments of fixed assets or intangible assets or other adverse
financial consequences, including tax consequences related thereto,
especially in view of the company’s recent market valuation; our
ability to successfully integrate Zale Corporation and R2Net’s
operations and to realize synergies from the Zale and R2Net
transactions; general economic conditions; potential regulatory
changes, global economic conditions or other developments related
to the United Kingdom’s announced intention to negotiate a formal
exit from the European Union; a decline in consumer spending or
deterioration in consumer financial position; the merchandising,
pricing and inventory policies followed by Signet; Signet’s
relationships with suppliers and ability to obtain merchandise that
customers wish to purchase; the imposition of additional duties,
tariffs, taxes and other charges or other barriers to trade; the
reputation of Signet and its banners; the level of competition and
promotional activity in the jewelry sector; the cost and
availability of diamonds, gold and other precious metals; changes
in the supply and consumer acceptance of gem quality lab created
diamonds; regulations relating to customer credit; seasonality of
Signet’s business; the success of recent changes in Signet’s
executive management team; the performance of and ability to
recruit, train, motivate and retain qualified sales associates; the
impact of weather-related incidents on Signet’s business, financial
market risks; exchange rate fluctuations; changes in Signet’s
credit rating; changes in consumer attitudes regarding jewelry;
management of social, ethical and environmental risks; the
development and maintenance of Signet’s OmniChannel retailing; the
ability to optimize Signet’s real estate footprint; security
breaches and other disruptions to Signet’s information technology
infrastructure and databases, inadequacy in and disruptions to
internal controls and systems; changes in assumptions used in
making accounting estimates relating to items such as credit
outsourcing fees, extended service plans and pensions; risks
related to Signet being a Bermuda corporation; the impact of the
acquisition of Zale Corporation on relationships, including with
employees, suppliers, customers and competitors; Signet’s ability
to protect its intellectual property; changes in taxation benefits,
rules or practices in the US and jurisdictions in which Signet’s
subsidiaries are incorporated, including developments related to
the tax treatment of companies engaged in Internet commerce; and an
adverse development in legal or regulatory proceedings or tax
matters, any new regulatory initiatives or investigations, and
ongoing compliance with regulations and any consent orders or other
legal or regulatory decisions.
For a discussion of these and other risks and uncertainties
which could cause actual results to differ materially from those
expressed in any forward-looking statement, see the “Risk Factors”
section of Signet’s Fiscal 2019 Annual Report on Form 10-K filed
with the SEC on April 3, 2019 and quarterly reports on Form 10-Q
filed with the SEC. Signet undertakes no obligation to update or
revise any forward-looking statements to reflect subsequent events
or circumstances, except as required by law.
GAAP to Non-GAAP Reconciliations
The following information provides reconciliations of the most
comparable financial measures calculated and presented in
accordance with accounting principles generally accepted in the
U.S. (“GAAP”) to presented non-GAAP financial measures. The company
believes that non-GAAP financial measures, when reviewed in
conjunction with GAAP financial measures, can provide more
information to assist investors in evaluating historical trends and
current period performance. For these reasons, internal management
reporting also includes non-GAAP measures. Items may be excluded
from GAAP financial measures when the company believes this
provides greater clarity to management and investors.
These non-GAAP financial measures should be considered in
addition to, and not superior to or as a substitute for the GAAP
financial measures presented in this earnings release and the
company’s financial statements and other publicly filed reports. In
addition, our non-GAAP financial measures may not be the same as or
comparable to similar non-GAAP measures presented by other
companies.
In discussing financial results, the company refers to free cash
flow which is not in accordance with GAAP and is defined as the net
cash provided by operating activities less purchases of property,
plant and equipment. Management considers free cash flow as helpful
in understanding how the business is generating cash from its
operating and investing activities that can be used to meet the
financing needs of the business. Free cash flow is an indicator
used by management frequently in evaluating its overall liquidity
and determining appropriate capital allocation strategies. Free
cash flow does not represent the residual cash flow available for
discretionary expenditure.
13 weeks ended (in millions)
May 4,
2019 May 5, 2018 Net cash provided by
operating activities $ 105.4 $ 27.9 Purchase of property, plant and
equipment (24.6 ) (26.1 ) Free cash flow $ 80.8 $ 1.8
13 weeks ended May 4,
2019 May 5, 2018 Total GAAP operating
income (loss) $ (2.6 ) $ (574.2 ) Charges related to transformation
plan 26.8 6.5 Loss related to goodwill and intangible impairment —
448.7 Loss related to sale of non-prime receivables — 143.1
Total non-GAAP operating income (loss) $ 24.2 $ 24.1
13 weeks ended May 4,
2019 May 5, 2018 North America segment
GAAP operating income (loss) $ 48.1 $ (537.3 ) Charges related to
transformation plan (0.5 ) — Loss related to goodwill and
intangible impairment — 448.7 Loss related to sale of non-prime
receivables — 141.0 North America segment non-GAAP
operating income (loss) $ 47.6 $ 52.4
13 weeks ended May 4, 2019
May 5, 2018 Other segment GAAP operating income
(loss) $ (42.7 ) $ (29.3 ) Charges related to transformation plan
27.3 2.1 Loss related to sale of non-prime receivables — 6.5
Other segment non-GAAP operating income (loss) $ (15.4 ) $
(20.7 )
13 weeks ended May 4,
2019 May 5, 2018 GAAP effective tax rate
13.0 % 14.8 % Charges related to transformation plan 5.3 % (0.1 )%
Loss related to goodwill and intangible impairment — % (3.5 )% Loss
related to sale of non-prime receivables — % (1.1 )% Non-GAAP
effective tax rate 18.3 % 10.1 %
13
weeks ended May 4, 2019 May 5, 2018
GAAP Diluted EPS $ (0.35 ) $ (8.48 ) Charges related to
transformation plan1 0.43 0.09 Loss related to goodwill and
intangible impairment1 — 6.44 Loss related to sale of non-prime
receivables1 — 2.05 Non-GAAP Diluted EPS $ 0.08
$ 0.10
Fiscal 2020Guidance LowEnd
Fiscal 2020Guidance HighEnd
2020 GAAP operating income $ 190.0 $ 225.0 Charges related to
transformation plan 70.0 55.0 2020 Non-GAAP operating income $
260.0 $ 280.0
Fiscal 2020Guidance LowEnd
Fiscal 2020Guidance HighEnd
2020 GAAP Diluted EPS $ 1.88 $ 2.38 Charges related to
transformation plan1 1.00 0.79 2020 Non-GAAP Diluted EPS $ 2.88 $
3.17
Q2 Fiscal 2020Guidance LowEnd
Q2 Fiscal 2020Guidance HighEnd
Q2 2020 GAAP operating profit $ 15.0 $ 25.0 Charges related to
transformation plan 20.0 15.0 Q2 2020 Non-GAAP operating profit $
35.0 $ 40.0
Fiscal Q2'20Guidance LowEnd
Fiscal Q2'20Guidance HighEnd
Q2 GAAP Diluted EPS $ (0.10 ) $ 0.07 Charges related to
transformation plan1 0.33 0.23 Q2 Non-GAAP Diluted EPS $
0.23 $ 0.30 1Reconciliation of GAAP and non-GAAP
charges and losses includes related tax impact.
Condensed Consolidated Income Statements (Unaudited)
13 weeks ended (in millions, except per
share amounts)
May 4, 2019 May 5, 2018
Sales
$ 1,431.7 $ 1,480.6 Cost of sales
(932.3
) (995.8 ) Gross margin
499.4 484.8 Selling, general
and administrative expenses
(475.2 ) (482.8 ) Credit
transaction, net
— (143.1 ) Restructuring charges
(26.8 ) (6.5 ) Goodwill and intangible impairments
— (448.7 ) Other operating income, net
— 22.1
Operating income (loss)
(2.6 ) (574.2 )
Interest expense, net
(9.2 ) (8.9 ) Other
non-operating income
0.3 0.6 Income (loss)
before income taxes
(11.5 ) (582.5 ) Income taxes
1.5 85.9 Net income (loss)
$
(10.0 ) $ (496.6 ) Dividends on redeemable
convertible preferred shares
(8.2 ) (8.2 ) Net income
(loss) attributable to common shareholders
$ (18.2
) $ (504.8 ) Earnings (loss) per common share: Basic
$ (0.35 ) $ (8.48 ) Diluted
$
(0.35 ) $ (8.48 ) Weighted average common shares
outstanding: Basic
51.6 59.5 Diluted
51.6 59.5
Dividends declared per common share
$ 0.37 $ 0.37
Condensed Consolidated Balance Sheets (Unaudited)
(in millions, except par value per share amount)
May 4, 2019
February 2,2019
May 5, 2018 Assets Current assets: Cash
and cash equivalents $ 195.1 $ 195.4 $ 153.9 Accounts receivable
23.1 23.7 491.4 Other current assets 205.5 244.0 236.8 Income taxes
4.8 5.8 55.2 Inventories 2,394.2 2,386.9 2,429.0
Total current assets
2,822.7 2,855.8 3,366.3
Non-current assets:
Property, plant and equipment, net of
accumulated depreciation of$1,319.6, $1,282.8 and $1,227.3,
respectively
776.1 800.5 847.2 Operating lease right-of-use assets
1,822.8
— — Goodwill 296.4 296.6 509.1 Intangible assets, net 264.1 265.0
343.2 Other assets 189.2 181.2 206.3 Deferred tax assets 22.0
21.0 0.8 Total assets
$
6,193.3
$ 4,420.1 $ 5,272.9
Liabilities and
Shareholders’ equity Current liabilities: Loans and overdrafts
$ 43.7 $ 78.8 $ 72.3 Accounts payable 238.3 153.7 287.5 Accrued
expenses and other current liabilities 420.2 502.8 463.7 Deferred
revenue 277.0 270.0 284.9 Operating lease liabilities, current
358.9
— — Income taxes 24.1 27.7 — Total current
liabilities
1,362.2
1,033.0 1,108.4 Non-current liabilities: Long-term debt 639.0 649.6
679.7 Operating lease liabilities, non-current
1,589.4
— — Other liabilities 126.0 224.1 236.5 Deferred revenue 699.6
696.5 667.5 Deferred tax liabilities — — 74.2
Total liabilities
4,416.2
2,603.2 2,766.3 Commitments and contingencies
Series A redeemable convertible preferred
shares of $.01 par value:authorized 500 shares, 0.625 shares
outstanding (February 2, 2019 andMay 5,2018: 0.625 shares
outstanding)
615.7 615.3 614.0 Shareholders’ equity:
Common shares of $0.18 par value:
authorized 500 shares, 52.2shares outstanding (February 2, 2019:
51.9 outstanding; May 5, 2018:59.2 outstanding)
12.6 12.6 15.7 Additional paid-in capital 232.7 236.5 281.4 Other
reserves 0.4 0.4 0.4
Treasury shares at cost: 17.8 shares
(February 2, 2019: 18.1 shares;May 5, 2018: 28.0 shares)
(999.8 ) (1,027.3 ) (1,992.2 ) Retained earnings 2,223.4 2,282.2
3,869.2 Accumulated other comprehensive loss (307.9 ) (302.8 )
(281.9 ) Total shareholders’ equity
1,161.4 1,201.6
1,892.6 Total liabilities, redeemable convertible
preferred shares and shareholders’ equity
$
6,193.3
$ 4,420.1 $ 5,272.9
Condensed Consolidated Statements of Cash Flows
(Unaudited)
13 weeks ended (in millions)
May 4,
2019 May 5, 2018 Cash flows from
operating activities Net income (loss)
$ (10.0
) $ (496.6 ) Adjustments to reconcile net income (loss) to
net cash provided by operating activities: Amortization of
operating lease assets
87.3 — Depreciation and amortization
41.0 49.8 Amortization of unfavorable leases and contracts
(1.4 ) (2.0 ) Share-based compensation
4.0 1.8
Deferred taxation
— (18.8 ) Credit transaction, net
—
141.0 Goodwill and intangible impairments
— 448.7
Restructuring charges
5.4 — Other non-cash movements
(4.9 ) — Changes in operating assets and liabilities:
Decrease in accounts receivable
0.9 59.9 Decrease in other
assets and other receivables
28.1 10.8 Increase in
inventories
(7.8 ) (162.4 ) Increase in accounts
payable
87.7 55.7 (Decrease) increase in accrued expenses
and other liabilities
(39.9 ) 15.3 Change in
operating lease liabilities
(91.4 ) — Increase
(decrease) in deferred revenue
10.5 (4.3 ) Decrease in
income taxes payable
(2.7 ) (70.3 ) Pension plan
contributions
(1.4 ) (0.7 ) Net cash provided by
operating activities
105.4 27.9
Investing
activities Purchase of property, plant and equipment
(24.6 ) (26.1 ) Purchase of available-for-sale
securities
(6.1 ) (0.4 ) Proceeds from sale of
available-for-sale securities
0.3 1.1 Net cash
used in investing activities
(30.4 ) (25.4 )
Financing activities Dividends paid on common shares
(19.2 ) (18.8 ) Dividends paid on redeemable
convertible preferred shares
(7.8 ) (7.8 ) Repurchase
of common shares
— (60.0 ) Repayments of term loans
(8.9 ) (6.7 ) Proceeds from revolving credit facility
— 40.0 Repayments of bank overdrafts
(37.3 )
(13.9 ) Other financing activities
(1.5 ) (2.1 ) Net
cash used in financing activities
(74.7 ) (69.3 )
Cash and cash equivalents at beginning of period
195.4 225.1
Increase (decrease) in cash and cash equivalents
0.3 (66.8 )
Effect of exchange rate changes on cash and cash equivalents
(0.6 ) (4.4 ) Cash and cash equivalents at end of
period
$ 195.1 $ 153.9
Real Estate Portfolio:
Signet has a diversified real estate portfolio. On May 4,
2019, Signet had 3,300 stores totaling 4.7 million square feet of
selling space. In the first quarter, store count decreased by 34
and square feet of selling space decreased 0.8%.
Store count by banner February 2, 2019
Openings Closures May 4, 2019 Kay 1,214 8 (19
) 1,203 Zales 658 2 (4 ) 656 Peoples 123 — (4 ) 119 Jared 256 — (5
) 251 Piercing Pagoda 574 — (5 ) 569 Regional banners 32 — (3 ) 29
North America segment 2,857 10 (40 ) 2,827 H.Samuel 288 — (2
) 286 Ernest Jones 189 — (2 ) 187
International segment 477
— (4 ) 473
Signet 3,334 10 (44 ) 3,300
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version on businesswire.com: https://www.businesswire.com/news/home/20190606005225/en/
Investors:Randi AbadaSVP Corporate Finance Strategy &
Investor Relations+1 330 668
3489randi.abada@signetjewelers.comMedia:David BouffardVP
Corporate Affairs+1 330 668
5369david.bouffard@signetjewelers.com
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