Signet Jewelers Limited (“Signet”) (NYSE:SIG), the world's
largest retailer of diamond jewelry, today announced its results
for the 13 weeks (“fourth quarter Fiscal 2020”) and 52 weeks
("Fiscal 2020") ended February 1, 2020.
Fourth Quarter Fiscal 2020:
- Same store sales grew 2.3% with North America same store sales
up 2.9%2
- GAAP diluted earnings per share (“EPS”) of $3.14, including the
impact of restructuring charges and resolution of previously
disclosed litigation
- Non-GAAP diluted EPS of $3.671
Fiscal 2020:
- Same store sales grew 0.6%2
- GAAP diluted EPS of $1.40, including the impact of a non-cash
impairment charge related to goodwill and intangibles,
restructuring charges, and resolution of previously disclosed
litigation
- Non-GAAP diluted EPS of $3.881
- Operating cash flow of $555.7 million and free cash flow of
$419.4 million1
Fiscal Q4'20
Fiscal Q4'19
Fiscal 2020
Fiscal 2019
Revenue ($ in millions)
$
2,153.3
$
2,154.7
$
6,137.1
$
6,247.1
Same store sales % change(2)
2.3
%
(2.0
)%
0.6
%
(0.1
)%
GAAP
Operating income (loss)
$
223.2
$
(83.5
)
$
158.3
$
(764.6
)
Operating income (loss) as % of sales
10.4
%
(3.9
)%
2.6
%
(12.2
)%
GAAP Diluted EPS
$
3.14
$
(2.25
)
$
1.40
$
(12.62
)
Non-GAAP(1)
Operating income
$
270.3
$
241.3
$
318.3
$
275.1
Operating income as % of sales
12.6
%
11.2
%
5.2
%
4.4
%
Non-GAAP Diluted EPS
$
3.67
$
3.96
$
3.88
$
3.72
(1) See non-GAAP reconciliation page
(2) Same store sales include physical stores and eCommerce
sales
Virginia C. Drosos, Chief Executive Officer, commented, “On
behalf of the Signet team, our thoughts and prayers are with all
those who are impacted by the COVID-19 pandemic. We have heartfelt
appreciation and admiration for all who are working tirelessly to
fight the spread of this disease.”
Ms. Drosos continued, “While it is difficult in the current
environment to reflect on the past, it’s important to consider
where we’ve been and look ahead with the expectation of recovery.
Prior to this crisis, our Signet team delivered results ahead of
expectations for the fourth quarter and Fiscal 2020. Moreover, we
delivered our best overall holiday business performance in four
years. As we entered Fiscal 2021, our momentum from holiday
continued, including a strong Valentine’s Day selling period,
validating that the strategic initiatives and investments we made
in the first two years of our Path to Brilliance transformation are
delivering results.
"What’s paramount now is that we are moving quickly and
aggressively to strengthen Signet’s financial flexibility by
reducing capital expenditures, driving transformational cost
savings, and accelerating optimization of our real estate
footprint. In addition, we have accessed $900 million from our
revolving credit facility, suspended our common dividend, and
elected to pay the May quarterly dividend on the preference shares
in kind rather than in cash. In line with our Customer First and
Omni-channel strategies, we are prioritizing choiceful digital
investments, including advancing our e-commerce experience and
enabling a more flexible fulfillment model. We believe the
exceptional team, capabilities, and agility we have built through
our Path to Brilliance transformation position us well to navigate
these unprecedented business times and emerge with greater
competitive advantages. I want to thank all of our team members for
their continued commitment to each other, our customers, our
shareholders and our company. Amidst all challenges, they are
demonstrating remarkable compassion, courage, and creativity.”
Change from previous
year
Fourth
Quarter Fiscal 2020
Same store sales
Non-same store sales,
net
Total sales at constant
exchange rate
Exchange translation
impact
Total sales as
reported
Total sales (in
millions)
Kay
0.6
%
(1.8
)%
(1.2
)%
—
%
(1.2
)%
$
827.3
Zales
5.9
%
(1.8
)%
4.1
%
—
%
4.1
%
$
480.1
Jared
(2.0
)%
(1.9
)%
(3.9
)%
—
%
(3.9
)%
$
367.2
Piercing Pagoda
7.7
%
(0.1
)%
7.6
%
—
%
7.6
%
$
106.6
James Allen
32.6
%
—
%
32.6
%
—
%
32.6
%
$
84.2
Peoples
3.3
%
(1.6
)%
1.7
%
1.1
%
2.8
%
$
76.3
Regional banners
(7.5
)%
(44.5
)%
(52.0
)%
0.2
%
(51.8
)%
$
12.1
North America segment
2.9
%
(2.4
)%
0.5
%
0.1
%
0.6
%
$
1,953.8
International segment
(3.1
)%
(3.2
)%
(6.3
)%
1.8
%
(4.5
)%
$
186.2
Other(1)
na
(20.8
)%
(20.8
)%
—
%
(20.8
)%
$
13.3
Signet
2.3
%
(2.6
)%
(0.3
)%
0.2
%
(0.1
)%
$
2,153.3
(1) Includes sales from Signet’s diamond sourcing
initiative.
Change from previous
year
Fiscal 2020
Same store sales
Non-same store sales,
net
Total sales at constant
exchange rate
Exchange translation
impact
Total sales as
reported
Total sales (in
millions)
Kay
—
%
(0.8
)%
(0.8
)%
—
%
(0.8
)%
$
2,397.7
Zales
2.8
%
(2.7
)%
0.1
%
—
%
0.1
%
$
1,261.3
Jared
(2.5
)%
(2.2
)%
(4.7
)%
—
%
(4.7
)%
$
1,088.1
Piercing Pagoda
10.9
%
(1.2
)%
9.7
%
—
%
9.7
%
$
331.7
James Allen
12.0
%
—
%
12.0
%
—
%
12.0
%
$
250.6
Peoples
(0.9
)%
(1.7
)%
(2.6
)%
(1.1
)%
(3.7
)%
$
200.6
Regional banners
(10.7
)%
(48.2
)%
(58.9
)%
—
%
(58.9
)%
$
35.8
North America segment
1.1
%
(2.4
)%
(1.3
)%
—
%
(1.3
)%
$
5,565.8
International segment
(4.9
)%
(2.7
)%
(7.6
)%
(2.5
)%
(10.1
)%
$
518.0
Other(1)
na
84.4
%
84.4
%
—
%
84.4
%
$
53.3
Signet
0.6
%
(2.1
)%
(1.5
)%
(0.3
)%
(1.8
)%
$
6,137.1
(1) Includes sales from Signet’s diamond sourcing
initiative.
Fourth quarter Fiscal
2020
Fourth quarter Fiscal
2019
GAAP Operating income/(loss) in
millions
$
% of sales
$
% of sales
North America segment
$
259.9
13.3
%
$
(60.1
)
(3.1
)%
International segment
30.1
16.2
%
31.0
15.9
%
Other
(66.8
)
nm
(54.4
)
nm
Total GAAP operating income (loss)
$
223.2
10.4
%
$
(83.5
)
(3.9
)%
Fourth quarter Fiscal
2020
Fourth quarter Fiscal
2019
Non-GAAP Operating income/(loss) in
millions
$
% of sales
$
% of sales
North America segment
$
263.3
13.5
%
$
222.0
11.4
%
International segment
30.1
16.2
%
31.0
15.9
%
Other
(23.1
)
nm
(11.7
)
nm
Total Non-GAAP operating income
$
270.3
12.6
%
$
241.3
11.2
%
Fourth Quarter Fiscal 2020 Financial Highlights:
Signet's total sales were $2.15 billion, down $1.4 million or
down 0.1%, in the 13 weeks ended February 1, 2020 on a reported
basis and down 0.3% on a constant currency basis. Total same store
sales grew 2.3% year-over-year.
eCommerce sales were $299.9 million, up 15.1% year over year.
eCommerce sales accounted for 13.9% of sales, up from 12.1% of
sales in the prior year quarter. Brick and mortar same store sales
grew 0.5%.
North America payment plan participation rate, including both
credit and leasing sales, was 47.0% versus 50.1% in the prior year
fourth quarter.
By operating segment:
North America
- North America same store sales grew 2.9%, with eCommerce sales
growth of 15.0%, and brick and mortar same store sales growth of
1.1%. Same store sales grew in all mall based banners.
- Average transaction value ("ATV") decreased 0.5% and the number
of transactions increased 3.4% driven by higher conversion
in-store.
- Bridal and fashion category sales grew on a same store sales
basis reflecting strengthened product newness including new
collections Center of Me and Marilyn Monroe. The Watches and Other
categories declined on a same store sales basis.
International
- International same store sales decreased 3.1%, with eCommerce
sales growth of 15.8% offset by brick and mortar same store sales
decline of 5.8%.
- Average transaction value grew 1.6% and the number of
transactions decreased 4.6%.
- Sales declined across categories and continued to reflect a
difficult operating environment in the UK.
Gross margin was $897.9 million, or 41.7% of sales, up 100 bps
versus the prior year quarter. The gross margin rate reflected: 1)
transformation cost savings, 2) the benefit of lapping an inventory
write-down in the prior year fourth quarter, and 3) lower store
occupancy costs inclusive of closed stores. In the current year
quarter, a charge of $3.4 million was taken related to inventory
that the Company previously discontinued as part of its
transformation plan. Excluding this charge, non-GAAP gross margin
was $901.3 million, or 41.9%, up 120 bps versus the prior year
quarter.
SGA was $633.2 million, or 29.4% of sales, compared to $647.2
million, or 30.0% of sales in the prior year. Changes in SGA were
driven by: 1) lower advertising spend with increased impressions,
2) lower store staff costs inclusive of closed stores, 3) the
benefit of lapping a charge related to a regulatory matter in the
prior year, and 4) higher incentive compensation.
GAAP operating income/(loss) was $223.2 million or 10.4% of
sales, compared to $(83.5) million, or (3.9)% of sales in the prior
year fourth quarter. The operating income change reflected: 1) the
benefit of lapping prior year charges of $324.8 million, primarily
related to goodwill, 2) transformation cost savings, 3) lower
advertising, 4) a $33.2 million charge, net of expected insurance
recoveries, related to the proposed settlement of previously
disclosed litigation, and 5) higher incentive compensation.
Non-GAAP operating income was $270.3 million, or 12.6% of sales,
compared to $241.3 million, or 11.2% of sales in prior year fourth
quarter. Non-GAAP operating income excluded $13.9 million in
restructuring charges related to the Path to Brilliance
transformation plan and a $33.2 million charge, net of expected
insurance recoveries, related to the proposed settlement of
previously disclosed litigation.
The current quarter GAAP effective tax rate of 13.0% was
primarily driven by pre-tax earnings mix by jurisdiction. The
non-GAAP effective tax rate was 16.9% which was also primarily
driven by pre-tax earnings mix by jurisdiction.
GAAP EPS was $3.14, including: 1) a $0.24 charge related to the
Path to Brilliance transformation plan, 2) a $0.56 charge related
to the resolution of previously disclosed litigation, and 3) tax
impact of these items of $(0.28). Excluding these charges, EPS was
$3.67 on a non-GAAP basis.
GAAP and Non-GAAP EPS in the quarter is based on non-GAAP net
income before preferred dividends, with the preferred shares
included in diluted share count due to the level of fourth quarter
non-GAAP net income.
Fiscal 2020 Financial Highlights:
Signet's total sales were $6.1 billion, down $110.0 million or
1.8% in the year ended February 1, 2020 on a reported basis and
down 1.5% on a constant currency basis. Total same store sales grew
0.6% year-over-year.
eCommerce sales were $750.4 million, up 10.0% year over year.
eCommerce sales accounted for 12.2% of sales, up from 10.9% of
sales in the prior year and more than doubling from the prior three
year period. Brick and mortar same store sales declined 0.7%.
North America payment plan participation rate, including both
credit and leasing sales, was 49.9% versus 51.7% in the prior
year.
By operating segment:
North America
- North America same store sales grew 1.1%, with eCommerce sales
growth of 10.7% and brick and mortar same store sales decline of
0.2%.
- Average transaction value increased 0.5% and the number of
transactions increased 1.1%.
- The percentage of sales from new merchandise increased during
the year, including Center of Me and Love + Be LovedTM, somewhat
offset by declines in legacy product. Bridal and fashion sales each
increased on a same store sales basis while the Watches and Other
categories declined on a same store sales basis.
International
- International same store sales decreased 4.9%, with eCommerce
sales growth of 2.7% offset by brick and mortar same stores sales
decline of 5.9%.
- Average transaction value was flat and the number of
transactions decreased 5.1%.
- Sales declined across categories and continued to reflect a
difficult operating environment in the UK.
Balance Sheet and Statement of Cash Flows:
Net cash provided by operating activities for Fiscal 2020 was
$555.7 million. Free cash flow for Fiscal 2020 was $419.4 million,
a $300.7 million improvement versus prior year adjusted free cash
flow of $118.7 million which excluded the proceeds of the sale of
non-prime receivables.
Cash and cash equivalents were $374.5 million as of February 1,
2020, compared to $195.4 million at prior-year end.
Net inventories were $2.3 billion, down 2.3%, compared to $2.4
billion at the end of the prior year due to more effective
inventory management.
Long-term debt was $515.9 million, down $133.7 million, compared
to $649.6 million in the prior year period, primarily due to lower
borrowing as a result of strong free cash flow generation.
Liquidity:
As a result of business disruption created by COVID-19,
including temporary broadscale store closures, the Company is
aggressively reducing overall capital expenditures, prioritizing
digital investments to enhance its new and modernized eCommerce
platform and provide a frictionless shopping experience for
customers. This will include flexible fulfillment which unlocks
store level inventory and enables buy online pick up in store.
Inventory management will continue to be a strategic focus for the
company. Transformational cost reductions include using data and
analytics to drive marketing efficiencies, significantly reducing
discretionary spend, implementing temporary reduced work hours and
furloughs across store and Support Center teams, and lowering cash
compensation for executives and the Board of Directors.
As a prudent measure to increase Signet’s financial flexibility
and bolster its cash position, the Company elected to access an
additional $900 million from its senior secured asset-based
revolving credit facility. At the time of drawdown on March 19, the
Company had more than $1.2 billion in cash and an additional $292
million available on this asset-based revolving credit
facility.
The asset-based revolving credit facility is subject to a fixed
charge coverage ratio if availability under the facility falls
below 10% of the borrowing base or $100 million whichever is
higher. The Company’s most recently reported borrowing base under
the asset-based revolving credit facility is approximately $1.4
billion. The Company’s senior unsecured notes due in 2024 are not
subject to financial covenants.
Quarterly Dividend:
Signet’s Board of Directors has elected to temporarily suspend
the dividend program on the common shares and has elected to pay
the May quarterly dividend on its preference shares in kind.
Outlook:
As previously disclosed, the Company is not providing Fiscal
2021 financial guidance at this time.
Conference Call:
A conference call is scheduled for March 26, 2020 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: 1-888-317-6003 International Dial-in: +1
412-317-6061 Access code: 7441943
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 3,200 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 which could cause the actual results to not
be realized, including, but not limited to: the impact of a public
health crisis or disease outbreak, epidemic or pandemic, such as
the recent novel coronavirus on Signet’s business; general economic
or market conditions, financial market risks, or other factors that
relate to us, including our ability to optimize Signet's
transformation initiative; a decline in consumer spending or
deterioration in consumer financial position; changes to
regulations relating to customer credit, disruption in the
availability of credit for customers and customer inability to meet
credit payment obligations; our ability to achieve the benefits
related to the outsourcing of the credit portfolio sale due to
technology disruptions, future financial results and operating
results and/or disruptions arising from changes to or termination
of the non-prime outsourcing agreement requiring transition to
alternative arrangements through other providers or alternative
payment options; 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; the volatility of
our stock price; the impact of financial covenants, credit ratings
or interest volatility on our ability to borrow; changes in our
credit rating; potential regulatory changes, global economic
conditions or other developments related to the United Kingdom’s
exit from the European Union; exchange rate fluctuations; the cost,
availability of and demand for diamonds, gold and other precious
metals; stakeholder reactions to disclosure regarding the source
and use of certain minerals; seasonality of Signet’s business; the
merchandising, pricing and inventory policies followed by Signet
and failure to manage inventory levels; Signet’s relationships with
suppliers and ability to obtain merchandise that customers wish to
purchase; the failure to adequately address the impact of existing
tariffs and/or the imposition of additional duties, tariffs, taxes
and other charges or other barriers to trade or impacts from trade
relations; the level of competition and promotional activity in the
jewelry sector; the development and maintenance of Signet’s
OmniChannel retailing and ability to increase digital sales;
changes in consumer attitudes regarding jewelry and failure to
anticipate and keep pace with changing fashion trends; changes in
the supply and consumer acceptance of and demand for gem quality
lab created diamonds and adequate identification of the use of
substitute products in our jewelry; ability to execute successful
marketing programs and manage social media; the ability to optimize
Signet’s real estate footprint; the ability to satisfy the
accounting requirements for “hedge accounting,” or the default or
insolvency of a counterparty to a hedging contract; the performance
of and ability to recruit, train, motivate and retain qualified
sales associates; management of social, ethical and environmental
risks; the reputation of Signet and its banners; inadequacy in and
disruptions to internal controls and systems, including related to
the migration to a new financial reporting information technology
system; security breaches and other disruptions to Signet’s
information technology infrastructure and databases; 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; failure to comply with labor regulations;
collective bargaining activity; changes in taxation laws, 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; risks
related to international laws and Signet being a Bermuda
corporation; difficulty or delay in executing or integrating an
acquisition, business combination, major business or strategic
initiative; risks relating to the outcome of pending litigation,
including risks related to satisfaction of the conditions precedent
for our pending securities class action settlement and timing and
precise amount of the liability funding and related insurance
reimbursement; our ability to protect our intellectual property or
physical assets; changes in assumptions used in making accounting
estimates relating to items such as extended service plans and
pensions; the success of recent changes in Signet’s executive
management team; or the impact of weather-related incidents,
natural disasters or terrorism and acts of war on Signet’s
business.
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 Item 1A, Risk
Factors, and elsewhere in the Annual Report on Form 10-K. Signet
undertakes no obligation to update or revise any forward-looking
statements to reflect subsequent events or circumstances, except as
required by law.
The following information provides reconciliations of the most
comparable financial measures calculated and presented in
accordance with accounting principles generally accepted in the US
(“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 useful supplementary information to management and
investors in assessing the operating performance of our
business.
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 that 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 adjusted free cash flow,
defined as free cash flow excluding proceeds from the sale of the
non-prime receivables, 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. Adjusted
free cash flow is an indicator used by management frequently in
evaluating its overall liquidity and determining appropriate
capital allocation strategies. Free cash flow and adjusted free
cash flow do not represent the residual cash flow available for
discretionary expenditure.
(in millions)
Fiscal 2020
Fiscal 2019
Net cash provided by operating
activities
$
555.7
$
697.7
Proceeds from sale of in-house finance
receivables
—
445.5
Operating cash flow (excluding sale of
in-house finance receivables)
$
555.7
$
252.2
(in millions)
Fiscal 2020
Fiscal 2019
Net cash provided by operating
activities
$
555.7
$
697.7
Purchase of property, plant and
equipment
(136.3
)
(133.5
)
Free cash flow
419.4
564.2
Proceeds from sale of in-house finance
receivables
—
445.5
Adjusted Free cash flow (excluding sale of
in-house finance receivables)
$
419.4
$
118.7
(in millions)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
Gross margin
$
897.9
$
877.8
$
2,223.7
$
2,160.8
Restructuring charges - cost of sales
3.4
(1.0
)
9.2
62.2
Non-GAAP gross margin
$
901.3
$
876.8
$
2,232.9
$
2,223.0
(in millions)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
Selling, general and administrative
expense
$
(633.2
)
$
(647.2
)
$
(1,918.2
)
$
(1,985.1
)
Charge related to regulatory
resolution
—
11.0
—
11.0
Non-GAAP selling, general and
administrative expense
$
(633.2
)
$
(636.2
)
$
(1,918.2
)
$
(1,974.1
)
(in millions)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
Total GAAP operating income (loss)
$
223.2
$
(83.5
)
$
158.3
$
(764.6
)
Charges related to transformation plan
13.9
27.1
79.1
125.9
Loss related to goodwill and intangible
impairment
—
286.7
47.7
735.4
Loss related to sale of non-prime
receivables
—
—
—
167.4
Charge related to shareholder
settlement
33.2
—
33.2
—
Charge related to regulatory
resolution
—
11.0
—
11.0
Total non-GAAP operating income
$
270.3
$
241.3
$
318.3
$
275.1
(in millions)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
North America segment GAAP operating
income (loss)
$
259.9
$
(60.1
)
$
327.0
$
(621.1
)
Charges related to transformation plan
3.4
(1.0
)
6.0
52.7
Loss related to goodwill and intangible
impairment
—
283.1
47.7
731.80
Loss related to sale of non-prime
receivables
—
—
—
160.4
North America segment non-GAAP operating
income
$
263.3
$
222.0
$
380.7
$
323.8
(in millions)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
International segment GAAP operating
income
$
30.1
$
31.0
$
16.0
$
12.9
Charges related to transformation plan
—
—
—
3.8
International segment non-GAAP operating
income
$
30.1
$
31.0
$
16.0
$
16.7
(in millions)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
Other segment GAAP operating loss
$
(66.8
)
$
(54.4
)
$
(184.7
)
$
(156.4
)
Charges related to transformation plan
10.5
28.1
73.1
69.4
Loss related to goodwill impairment
—
3.6
—
3.6
Loss related to sale of non-prime
receivables
—
—
—
7.0
Charge related to shareholder
settlement
33.2
—
33.2
—
Charge related to regulatory
resolution
—
11.0
—
11.0
Other segment non-GAAP operating loss
$
(23.1
)
$
(11.7
)
$
(78.4
)
$
(65.4
)
(in millions)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
GAAP effective tax rate
13.0
%
14.8
%
18.7
%
18.1
%
Charges related to transformation plan
0.6
%
6.1
%
(0.9
)%
(3.7
)%
Loss related to goodwill and intangible
impairment
—
%
31.1
%
—
%
(8.0
)%
Loss related to sale of non-prime
receivables
—
%
—
%
—
%
(6.5
)%
Charge related to regulatory
resolution
—
%
1.9
%
—
%
0.2
%
Charge related to shareholder
settlement
1.4
%
—
%
(0.4
)%
—
%
GAAP quarterly impact of annual tax
benefit
1.9
%
(53.4
)%
—
%
—
%
Gain on extinguishment of debt
—
%
—
%
0.1
%
—
%
Non-GAAP effective tax rate
16.9
%
0.5
%
17.5
%
0.1
%
(in millions)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
GAAP Diluted EPS
$
3.14
$
(2.25
)
$
1.40
$
(12.62
)
Charges related to transformation plan
0.24
0.37
1.53
1.77
Loss related to goodwill and intangible
impairment
—
4.78
0.92
12.26
Loss related to sale of non-prime
receivables
—
—
—
2.11
Gain on extinguishment of debt
0.01
—
(0.12
)
—
Charge related to regulatory
resolution
—
0.20
—
0.20
Charge related to shareholder
settlement
0.56
—
0.64
—
GAAP quarterly impact of annual tax
benefit
(0.10
)
0.86
—
—
Tax impact of above items
(0.18
)
—
(0.49
)
—
Non-GAAP Diluted EPS
$
3.67
$
3.96
$
3.88
$
3.72
Condensed Consolidated Income Statements (Unaudited)
(in millions, except per share
amounts)
13 weeks ended February 1,
2020
13 weeks ended February 2,
2019
Fiscal 2020
Fiscal 2019
Sales
$
2,153.3
$
2,154.7
$
6,137.1
$
6,247.1
Cost of sales
(1,252.0
)
(1,277.9
)
(3,904.2
)
(4,024.1
)
Restructuring charges - cost of sales
(3.4
)
1.0
(9.2
)
(62.2
)
Gross margin
897.9
877.8
2,223.7
2,160.8
Selling, general and administrative
expenses
(633.2
)
(647.2
)
(1,918.2
)
(1,985.1
)
Credit transaction, net
—
—
—
(167.4
)
Restructuring charges
(10.5
)
(28.1
)
(69.9
)
(63.7
)
Goodwill and intangible impairments
—
(286.7
)
(47.7
)
(735.4
)
Other operating income (loss)
(31.0
)
0.7
(29.6
)
26.2
Operating income (loss)
223.2
(83.5
)
158.3
(764.6
)
Interest expense, net
(7.7
)
(10.8
)
(35.6
)
(39.7
)
Other non-operating income, net
(0.5
)
0.3
7.0
1.7
Income (loss) before income taxes
215.0
(94.0
)
129.7
(802.6
)
Income taxes
(27.9
)
(13.9
)
(24.2
)
145.2
Net income (loss)
$
187.1
$
(107.9
)
$
105.5
$
(657.4
)
Dividends on redeemable convertible
preferred shares
(8.3
)
(8.3
)
(32.9
)
(32.9
)
Net income (loss) attributable to common
shareholders
$
178.8
$
(116.2
)
$
72.6
$
(690.3
)
Earnings (loss) per common share:
Basic
$
3.45
$
(2.25
)
$
1.40
$
(12.62
)
Diluted
$
3.14
$
(2.25
)
$
1.40
$
(12.62
)
Weighted average common shares
outstanding:
Basic
51.8
51.6
51.7
54.7
Diluted
59.5
51.6
51.8
54.7
Dividends declared per common share
$
0.37
$
0.37
$
1.48
$
1.48
Condensed Consolidated Balance Sheets
(Unaudited) (in millions, except par value per share
amount)
February 1, 2020
February 2, 2019
Assets
Current assets:
Cash and cash equivalents
$
374.5
$
195.4
Accounts receivable
38.8
23.7
Other current assets
403.5
244.0
Income taxes
6.3
5.8
Inventories
2,331.7
2,386.9
Total current assets
3,154.8
2,855.8
Non-current assets:
Property, plant and equipment, net
741.9
800.5
Operating lease right-of-use assets
1,683.3
—
Goodwill
248.8
296.6
Intangible assets, net
263.8
265.0
Other assets
201.8
181.2
Deferred tax assets
4.7
21.0
Total assets
$
6,299.1
$
4,420.1
Liabilities, Redeemable convertible
preferred shares, and Shareholders’ equity
Current liabilities:
Loans and overdrafts
$
95.6
$
78.8
Accounts payable
227.9
153.7
Accrued expenses and other current
liabilities
697.0
502.8
Deferred revenue
266.2
270.0
Operating lease liabilities
338.2
—
Income taxes
27.7
27.7
Total current liabilities
1,652.6
1,033.0
Non-current liabilities:
Long-term debt
515.9
649.6
Operating lease liabilities
1,437.7
—
Other liabilities
116.6
224.1
Deferred revenue
731.5
696.5
Deferred tax liabilities
5.2
—
Total liabilities
4,459.5
2,603.2
Commitments and contingencies
Series A redeemable convertible preferred
shares of $0.01 par value: 500 shares authorized, 0.625 shares
outstanding
617.0
615.3
Shareholders’ equity:
Common shares of $0.18 par value:
authorized 500 shares, 52.3 shares outstanding (2019: 51.9
outstanding)
12.6
12.6
Additional paid-in capital
245.4
236.5
Other reserves
0.4
0.4
Treasury shares at cost: 17.7 shares
(2019: 18.1 shares)
(984.9
)
(1,027.3
)
Retained earnings
2,242.9
2,282.2
Accumulated other comprehensive loss
(293.8
)
(302.8
)
Total shareholders’ equity
1,222.6
1,201.6
Total liabilities, redeemable convertible
preferred shares and shareholders’ equity
$
6,299.1
$
4,420.1
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in millions)
Fiscal 2020
Fiscal 2019
Cash flows from operating
activities:
Net income (loss)
$
105.5
$
(657.4
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
178.0
183.6
Amortization of unfavorable leases and
contracts
(5.5
)
(7.9
)
Share-based compensation
16.9
16.5
Deferred taxation
21.5
(105.6
)
Credit transaction, net
—
160.4
Goodwill and intangible impairments
47.7
735.4
Restructuring charges
25.9
84.9
Net gain on extinguishment of debt
(6.2
)
—
Other non-cash movements
(4.3
)
(3.4
)
Changes in operating assets and
liabilities:
Decrease (increase) in accounts
receivable
(15.2
)
45.7
Proceeds from sale of in-house finance
receivables
—
445.5
Decrease (increase) in other assets and
other receivables
(184.2
)
0.7
Decrease (increase) in inventories
48.8
(194.3
)
Increase (decrease) in accounts
payable
77.2
(78.5
)
Increase (decrease) in accrued expenses
and other liabilities
232.9
55.9
Change in operating lease assets and
liabilities
(9.4
)
—
Increase in deferred revenue
30.8
9.7
Increase in income taxes payable
0.6
10.9
Pension plan contributions
(5.3
)
(4.4
)
Net cash provided by operating
activities
555.7
697.7
Investing activities
Purchase of property, plant and
equipment
(136.3
)
(133.5
)
Proceeds from sale of assets
0.5
5.5
Purchase of available-for-sale
securities
(13.3
)
(0.6
)
Proceeds from sale of available-for-sale
securities
8.3
9.6
Net cash used in investing activities
(140.8
)
(119.0
)
Financing activities
Dividends paid on common shares
(77.4
)
(79.0
)
Dividends paid on redeemable convertible
preferred shares
(31.2
)
(31.2
)
Repurchase of common shares
—
(485.0
)
Proceeds from term and bridge loans
100.0
—
Repayments of term and bridge loans
(294.9
)
(31.3
)
Settlement of senior notes, including
third party fees
(241.5
)
—
Proceeds from revolving credit
facilities
858.3
787.0
Repayments of revolving credit
facilities
(588.3
)
(787.0
)
Payment of debt issuance costs
(9.3
)
—
Borrowings of bank overdrafts
47.5
25.9
Other financing activities
(0.2
)
(2.1
)
Net cash used in financing activities
(237.0
)
(602.7
)
Cash and cash equivalents at beginning of
period
195.4
225.1
Increase (decrease) in cash and cash
equivalents
177.9
(24.0
)
Effect of exchange rate changes on cash
and cash equivalents
1.2
(5.7
)
Cash and cash equivalents at end of
period
$
374.5
$
195.4
Real Estate Portfolio:
Signet has a diversified real estate portfolio. On February 1,
2020, Signet operated 3,208 stores totaling 4.6 million square feet
of selling space. Compared to prior year, store count decreased by
126 and square feet of selling space decreased 2.7%.
Store count by banner
February 2, 2019
Openings
Closures
February 1, 2020
Kay
1,214
19
(46
)
1,187
Zales
658
5
(33
)
630
Peoples
123
1
(9
)
115
Jared
256
3
(8
)
251
Piercing Pagoda
574
10
(29
)
555
Regional banners(1)
32
—
(13
)
19
North America segment
2,857
38
(138
)
2,757
H.Samuel
288
—
(17
)
271
Ernest Jones
189
—
(9
)
180
International segment
477
—
(26
)
451
Signet
3,334
38
(164
)
3,208
(1) Includes one James Allen location.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200326005153/en/
Investors: Randi Abada SVP Corporate Finance Strategy
& Investor Relations +1 330 668 3489
randi.abada@signetjewelers.com Media: Colleen Rooney Chief
Communications Officer +1 330 668 5932
colleen.rooney@signetjewelers.com David Bouffard VP Corporate
Affairs +1 330 668 5369 david.bouffard@signetjewelers.com
Signet Jewelers (NYSE:SIG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Signet Jewelers (NYSE:SIG)
Historical Stock Chart
From Apr 2023 to Apr 2024