HAMILTON, Bermuda, June 9, 2020 /PRNewswire/ -- Signet Jewelers
Limited ("Signet") (NYSE:SIG), the world's largest retailer of
diamond jewelry, today announced its results for the 13 weeks ended
May 2, 2020 ("first quarter Fiscal 2021"). As discussed below,
results are preliminary due to a pending long-lived non-cash assets
impairment review necessitated by the COVID-19 pandemic, and the
impacts of that review on our financial statements.
First Quarter Fiscal 2021 Highlights
- February same store sales ("SSS") positive low single digit. Q1
SSS down 38.9%1 reflecting the temporary closure of all
stores beginning in late March due to the novel coronavirus
("COVID-19").
- E-Commerce growth of 6.7%. Growth was 18.2% excluding the
impact of the shut-down of James Allen's New York distribution center due to COVID-19.
While stores were closed, Omnichannel initiatives accelerated
eCommerce growth to 55% excluding James Allen in April.
- Additional structural cost savings of more than $100 million identified, for the fiscal year, in
response to the COVID-19 pandemic.
- Pre-tax impairment charges are preliminary and include an
impairment charge of approximately $42.3
million against long lived assets with a carrying value of
approximately $100 million, which
remains under review and has not yet been finalized. All aspects of
the impairment review other than long lived assets are
complete.
- GAAP earnings per share ("EPS") of $(3.83), includes the impact of non-cash
impairment charges of $2.632 and tax benefit related to
certain tax matters
- Non-GAAP diluted EPS of $(1.59)3
- Cash and cash equivalents of $1.1
billion.
|
|
Fiscal 21
Q1
|
|
Fiscal 20
Q1
|
Revenue ($ in
millions)
|
|
$
|
852.1
|
|
|
$
|
1,431.7
|
|
Same store sales %
change1
|
|
(38.9)
|
%
|
|
(1.3)
|
%
|
GAAP
|
|
|
|
|
Operating income
(loss)
|
|
$
|
(291.1)
|
|
|
$
|
(2.6)
|
|
Operating income
(loss) as % of sales
|
|
(34.2)
|
%
|
|
(0.2)
|
%
|
GAAP Diluted
EPS
|
|
$
|
(3.83)
|
|
|
$
|
(0.35)
|
|
Non-GAAP(3)
|
|
|
|
|
Non-GAAP operating
income (loss)
|
|
$
|
(142.5)
|
|
|
$
|
24.2
|
|
Non-GAAP operating
income (loss) as % of sales
|
|
(16.7)
|
%
|
|
1.7
|
%
|
Non-GAAP Diluted
EPS
|
|
$
|
(1.59)
|
|
|
$
|
0.08
|
|
|
(1)
|
Same store sales
include physical store sales and eCommerce sales.
|
(2)
|
Pre-tax impairment
charges are preliminary and include an impairment charge of
approximately $42.3 million against long lived assets with a
carrying value of approximately $100 million, which remains under
review and has not yet been finalized. See Preliminary First
Quarter 2021 Results section within this release.
|
(3)
|
See non-GAAP
reconciliation page.
|
"Throughout the COVID-19 crisis, we have prioritized the health
and safety of our team members and customers with every decision we
make," said Virginia C. Drosos,
Chief Executive Officer. "Our excellent team, operating in a
culture of agility and efficiency, has been integral in allowing us
to rapidly adapt and respond to this environment, building on the
first 2 years of our Path to Brilliance strategy and accelerating
our transformation into a digital-first, omni-channel retailer. We
began our fiscal year with strong Valentine's Day sales
performance, and then quickly pivoted and further adapted our
eCommerce operating model to serve customers during stay-at-home
restrictions with new technology, virtual consultation and selling
solutions. We are gathering valuable insights on customer behaviors
and plan to use these learnings to enhance our competitive
advantage and emerge stronger from the crisis with optimized
virtual and physical footprints to meet our customers where and how
they choose to shop. We have moved forward in our digital journey
while also making significant progress controlling costs,
prioritizing investments to drive sustainable growth, and
preserving liquidity."
Response to COVID-19 pandemic
In March, the Company began implementing strategic responses to
ensure the safety of its employees and customers, while also
solidifying its liquidity. Signet temporarily closed all stores
beginning in late March. The Company temporarily furloughed the
majority of store and support center employees, while also
temporarily reducing the cash compensation of senior executives.
Finally, the company drew down $900
million under its senior secured asset-based revolving
credit facility.
In May, Signet began a staggered store reopening plan based on
health and safety standards as well as regional customer demand.
There are currently over 1,100 stores open and performance of
reopened stores has been encouraging with sequential week over week
sales performance improvements in open stores. The Company expects
business to return gradually, though given current events, stores
re-openings will continue with safety prioritized.
First Quarter 2021 Financial Highlights
Signet's total sales were $852.1
million, down 40.5%, in the 13 weeks ended May 2, 2020
on a reported basis and down 40.2% on a constant currency basis.
Total same store sales declined 38.9% year-over-year. Prior to
stores closing, first quarter same store sales were running in the
positive low single digits.
eCommerce sales were $164.7
million, up 6.7%, which includes COVID-19 impacts. Excluding
the temporary James Allen distribution center shut-down, eCommerce
sales grew 18.2%. Despite the disruption, the Company built
upon its Omnichannel foundation to productively pivot temporarily
to eCommerce-only operations while physical stores were closed.
Signet's virtual selling efforts led to accelerating consumer
demand, with eCommerce growth of 55% in April, excluding the James
Allen center impact, and momentum continued into May.
In response to the COVID-19 crisis, Signet has accelerated its
transformation to a digital first, Omnichannel retailer. Signet is
reimagining the shopping experience using data analytics and
customer research to meet our customers where they are: online with
advanced virtual and digitally native experiences and in-store with
store-in-stores and outlet locations that house multiple banners.
As such, the Company believes that segment level reporting is the
most consistent and useful way to deliver metrics going forward as
the Company continues to innovate across its portfolio.
|
Change
from previous year
|
|
|
First Quarter Fiscal
2021
|
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)
|
North America
segment
|
(39.0)
|
%
|
|
(0.9)
|
%
|
|
(39.9)
|
%
|
|
—
|
%
|
|
(39.9)
|
%
|
|
$
|
781.1
|
|
International
segment
|
(37.5)
|
%
|
|
(2.0)
|
%
|
|
(39.5)
|
%
|
|
(2.3)
|
%
|
|
(41.8)
|
%
|
|
$
|
64.9
|
|
Other(1)
|
nm
|
|
|
nm
|
|
|
nm
|
|
|
nm
|
|
|
nm
|
|
|
$
|
6.1
|
|
Signet
|
(38.9)
|
%
|
|
(1.3)
|
%
|
|
(40.2)
|
%
|
|
(0.3)
|
%
|
|
(40.5)
|
%
|
|
$
|
852.1
|
|
|
|
(1)
|
Includes sales from Signet's diamond
sourcing initiative.
|
By operating segment:
North America
- North America same store sales
declined 39.0%. Average transaction value ("ATV") declined 6.5% and
the number of transactions declined 34.5%.
- eCommerce sales grew 4.3%. Excluding the temporary James Allen
distribution center shut-down, eCommerce growth was 15.8%. Brick
and mortar same store sales declined 44.6%.
- North America payment plan
participation rate, including both credit and leasing sales, for Q1
was 43.4% versus 50.0% in the prior year first quarter. This is
reflective of both macroeconomic conditions and a greater
proportion of eCommerce sales in the quarter.
International
- International same store sales decreased 37.5%. ATV increased
2.7% and the number of transactions declined 41.2%.
- eCommerce sales grew 37.2%, with brick and mortar same store
sales declining 46.6%
GAAP gross margin was $204.2
million, or 24.0% of sales, down 1,090 bps versus the prior
year quarter. Gross merchandise margin was consistent with
the prior year rate, while gross margin rate decline was primarily
driven by lower sales resulting from the COVID-19 pandemic which
led to a deleveraging on fixed costs. The rate decline was
partially offset through transformation cost savings and lower
occupancy costs.
SGA was $358.4 million, or 42.1%
of sales, compared to $475.2 million,
or 33.2% of sales in the prior year. The $116.8 million decrease in SGA was driven by: 1)
lower labor costs resulting from employee furloughs, 2) temporary
pay reductions; and 3) and lower advertising expenses.
GAAP operating loss was $(291.1)
million or (34.2)% of sales and includes $136.3 million of pre-tax impairment of goodwill,
intangible and long lived assets. Pre-tax impairment charges are
preliminary and include an impairment charge of approximately
$42.3 million against long lived
assets with a carrying value of approximately $100 million, which remains under review and has
not yet been finalized. The loss compares to $(2.6) million, or (0.2)% of sales in the prior
year first quarter and further reveals the impact of the COVID-19
pandemic; however, its effects were mitigated in part by the
actions explained above.
Non-GAAP operating loss was $(142.5)
million, or (16.7)% of sales, compared to $24.2 million, or 1.7% of sales in prior year
first quarter. Non-GAAP operating loss excluded $12.3 million in restructuring charges related to
the Path to Brilliance transformation plan.
|
|
First quarter
Fiscal 2021
|
|
First quarter
Fiscal 2020
|
GAAP Operating
income (loss) in millions(1)
|
|
$
|
|
% of
sales
|
|
$
|
|
% of
sales
|
North America
segment
|
|
$
|
(234.2)
|
|
|
(30.0)
|
%
|
|
$
|
48.1
|
|
|
3.7
|
%
|
International
segment
|
|
(38.6)
|
|
|
(59.5)
|
%
|
|
(8.0)
|
|
|
(7.2)
|
%
|
Other
|
|
(18.3)
|
|
|
nm
|
|
|
(42.7)
|
|
|
nm
|
|
Total GAAP operating
income (loss)
|
|
$
|
(291.1)
|
|
|
(34.2)
|
%
|
|
$
|
(2.6)
|
|
|
(0.2)
|
%
|
|
|
(1)
|
Pre-tax impairment
charges are preliminary and include an impairment charge of
approximately $42.3 million against long lived assets with a
carrying value of approximately $100 million, which remains under
review and has not yet been finalized. See Preliminary First
Quarter 2021 Results section within this release.
|
|
|
First quarter
Fiscal 2021
|
|
First quarter
Fiscal 2020
|
Non-GAAP Operating
income (loss) in millions
|
|
$
|
|
% of
sales
|
|
$
|
|
% of
sales
|
North America
segment
|
|
$
|
(107.8)
|
|
|
(13.8)
|
%
|
|
$
|
47.6
|
|
|
3.7
|
%
|
International
segment
|
|
(16.6)
|
|
|
(25.6)
|
%
|
|
(8.0)
|
|
|
(7.2)
|
%
|
Other
|
|
(18.1)
|
|
|
nm
|
|
|
(15.4)
|
|
|
nm
|
|
Total Non-GAAP
operating income (loss)
|
|
$
|
(142.5)
|
|
|
(16.7)
|
%
|
|
$
|
24.2
|
|
|
1.7
|
%
|
The current quarter GAAP effective tax rate of 36.1% was
primarily driven by anticipated tax benefits from the Coronavirus
Aid, Relief, and Economic Security Act ("CARES Act"), partially
offset by the unfavorable impact of a valuation allowance recorded
against certain deferred tax assets in the US. The non-GAAP
effective tax rate was 50.4% which was primarily driven by the same
factors.
GAAP EPS was $(3.83), including
$2.63 charge related to the
impairment of goodwill, intangible assets and long lived assets and
$(0.63) resulting tax benefit.
Excluding these items, EPS was $(1.59) 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
first quarter net income (loss).
Balance Sheet and Statement of Cash Flows
With a focus on cash conservation, the Company used
$(7.6) million for operating
activities, leading to free cash flow of $(15.3) million with all stores temporarily
closed beginning in late March. Signet's enhanced fulfillment
options resulted in inventory of $2.4
billion, flat to last year's reduced levels. During
COVID-19, the Company reduced planned receipts, repurposed closed
store inventory to offset future receipts of core product, and
utilized clearance efforts to make room for merchandise newness
later this year. Flexible fulfillment remains a priority as the
Company continues to accelerate its Omnichannel capabilities.
Cash and cash equivalents were $1,066.6
million, compared to $195.1
million at the prior year quarter-end. Signet notes that
long term debt of $1,336.0 million,
compared to $639.0 million at the
prior year quarter end, includes the $900
million draw down on the revolving credit facility.
Signet Path to Brilliance: Doubling Down on Core Initiatives
in the Pivot to Year 3
The COVID-19 pandemic has rapidly altered the retail climate and
the Company is navigating that change by accelerating its
application of the key Path to Brilliance initiatives.
- Customer First - Continuing to provide customers with expertise
and a cultivated merchandise selection whenever and however they
choose to shop.
- Omnichannel - Continuing to optimize its virtual footprint
through website efficiencies, expansion of site capabilities and
building a roster of sales associates that are adept in virtual
selling.
- Culture of Agility and Efficiency - Taking into account the
strategic responses to the COVID-19 pandemic, as well as building
on the $185 million in net cost
savings achieved in the first two years of Path to Brilliance, the
Company is on track to exceed the original transformation goal of
$200 to $225
million in cost savings. Additional structural cost savings
of more than $100 million have been
identified, for the fiscal year, in response to the COVID-19
pandemic.
Footprint Optimization: Accelerating Momentum
The Company's culture of agility and efficiency has always
encompassed the optimization of its physical footprint. Following
an in-depth greenfield study as part of Path to Brilliance, the
Company has conducted further analysis during the COVID-19 pandemic
in order to emerge as a stronger and more efficient organization.
As a first step under this accelerated initiative, the Company will
not reopen at least 150 North America stores and 80 UK stores.
Further, Signet is committed to closing at least an additional 150
stores by the end of the fiscal year. Landlord discussions,
including rent deferrals and abatements, as well as store level
analysis remain ongoing as the Company assesses the future shape of
Signet. Importantly, while we continue to optimize our store base,
physical locations remain a core and valued aspect of the Signet
customer experience.
Quarterly Dividend:
Consistent with the Company's year end messaging, Signet's Board
of Directors has elected to temporarily suspend the dividend
program on the common shares and has elected to pay the August
quarterly dividend on its preference shares in kind.
Financial Guidance:
As previously disclosed, the Company is not providing Fiscal
2021 financial guidance at this time due to the continuing level of
uncertainty in the current environment.
Preliminary First Quarter 2021 Results:
As detailed above, results are preliminary due to a pending
impairment review of our long-lived assets necessitated by the
COVID-19 pandemic, and the impact, if any, of the results of that
review on items in our financial statements that are affected by
impairments. Final financial results and other disclosures will be
reported in our Quarterly Report on Form 10-Q to be filed with the
Securities and Exchange Commission and may differ from the results
and disclosures in this press release. Please read the Form
10-Q when it becomes available.
Conference Call:
A conference call is scheduled for June 9, 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: 8493993
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 negative
impacts that the COVID-19 pandemic has had, and will continue to
have, on Signet's business, financial condition, profitability and
cash flows, the effect of steps we take in response to the
pandemic, the severity and duration of the pandemic, including
whether there is a "second wave," the pace of recovery when the
pandemic subsides and the heightened impact it has on many of the
risks described herein, including without limitation risks relating
to disruptions in our supply chain, consumer spending and the
impact on demand of our products, our level of indebtedness and
covenant compliance, availability of adequate capital, our ability
to execute our business plans, our lease obligations and
relationships with our landlords, and asset impairments; general
economic or market conditions; financial market risks, 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 long-lived 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; our
ability to maintain adequate levels of liquidity for our cash
needs, including debt obligations, payment of dividends, and
capital expenditures as well as the ability of our customers,
suppliers and lenders to access sources of liquidity to provide for
their own cash needs; 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; an
adverse development in legal or regulatory proceedings or tax
matters, including any new claims or litigation brought by
employees, suppliers, consumers or shareholders, 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; 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, strikes, protests, riots or
terrorism, acts of war or another public health crisis or
disease outbreak, epidemic or pandemic 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 the "Risk Factors"
and "Forward-Looking Statements" sections of Signet's Fiscal 2020
Annual Report on Form 10-K filed with the SEC on March 26,
2020 and quarterly reports on Form 10-Q and the "Safe Harbor
Statements" in current reports on Form 8-K 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.
Investors:
Vincent
Sinisi
SVP Investor Relations
+1-330-665-6530
vincent.sinisi@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
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 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. Free cash flow does not represent the
residual cash flow available for discretionary expenditure.
|
|
13 weeks
ended
|
(in millions)
|
|
May 2,
2020
|
|
May 4,
2019
|
Net cash (used in)
provided by operating activities
|
|
$
|
(7.6)
|
|
|
$
|
105.4
|
|
Purchase of property,
plant and equipment
|
|
(7.7)
|
|
|
(24.6)
|
|
Free cash
flow
|
|
$
|
(15.3)
|
|
|
$
|
80.8
|
|
|
|
|
|
|
|
|
|
13 weeks
ended
|
(in millions)
|
|
May 2,
2020
|
|
May 4,
2019
|
Gross margin
|
|
$
|
204.2
|
|
|
$
|
499.4
|
|
Restructuring charges -
cost of sales
|
|
(0.4)
|
|
|
—
|
|
Non-GAAP Gross
Margin
|
|
$
|
203.8
|
|
|
$
|
499.4
|
|
|
|
|
|
|
|
|
|
13 weeks
ended
|
(in millions)
|
|
May 2,
2020
|
|
May 4,
2019
|
Total GAAP operating
income (loss)(1)
|
|
$
|
(291.1)
|
|
|
$
|
(2.6)
|
|
Charges related to
transformation plan
|
|
12.3
|
|
|
26.8
|
|
Asset
impairments
|
|
136.3
|
|
|
—
|
|
Total non-GAAP
operating income (loss)
|
|
$
|
(142.5)
|
|
|
$
|
24.2
|
|
|
|
|
|
|
|
|
|
13 weeks
ended
|
(in millions)
|
|
May 2,
2020
|
|
May 4,
2019
|
North America segment
GAAP operating income (loss)(1)
|
|
$
|
(234.2)
|
|
|
$
|
48.1
|
|
Charges related to
transformation plan
|
|
8.5
|
|
|
(0.5)
|
|
Asset
impairments
|
|
117.9
|
|
|
—
|
|
North America segment
non-GAAP operating income (loss)
|
|
$
|
(107.8)
|
|
|
$
|
47.6
|
|
|
|
|
|
|
|
|
|
13 weeks
ended
|
(in millions)
|
|
May 2,
2020
|
|
May 4,
2019
|
International segment
GAAP operating income (loss)(1)
|
|
$
|
(38.6)
|
|
|
$
|
(8.0)
|
|
Charges related to
transformation plan
|
|
3.6
|
|
|
—
|
|
Asset
impairments
|
|
18.4
|
|
|
—
|
|
International segment
non-GAAP operating income (loss)
|
|
$
|
(16.6)
|
|
|
$
|
(8.0)
|
|
|
|
13 weeks
ended
|
(in millions)
|
|
May 2,
2020
|
|
May 4,
2019
|
Other segment GAAP
operating income (loss)
|
|
$
|
(18.3)
|
|
|
$
|
(42.7)
|
|
Charges related to
transformation plan
|
|
0.2
|
|
|
27.3
|
|
Other segment
non-GAAP operating income (loss)
|
|
$
|
(18.1)
|
|
|
$
|
(15.4)
|
|
|
|
|
|
|
|
|
|
13 weeks
ended
|
|
|
May 2,
2020
|
|
May 4,
2019
|
GAAP effective tax
rate(1)
|
|
|
36.1%
|
|
13.0%
|
|
Charges related to
transformation plan
|
|
1.3%
|
|
5.3%
|
|
Asset
impairments
|
|
13.0%
|
|
—%
|
|
Non-GAAP effective
tax rate
|
|
50.4%
|
|
18.3%
|
|
|
|
|
|
|
|
|
|
13 weeks
ended
|
|
|
May 2,
2020
|
|
May 4,
2019
|
GAAP Diluted
EPS(1)
|
|
$
|
(3.83)
|
|
|
$
|
(0.35)
|
|
Charges related to
transformation plan
|
|
0.24
|
|
|
0.52
|
|
Asset
impairments
|
|
2.63
|
|
|
—
|
|
Tax impact of items
above
|
|
(0.63)
|
|
|
(0.09)
|
|
Non-GAAP Diluted
EPS
|
|
$
|
(1.59)
|
|
|
$
|
0.08
|
|
|
|
(1)
|
Pre-tax impairment
charges are preliminary and include an impairment charge of
approximately $42.3 million against long lived assets with a
carrying value of approximately $100 million, which remains under
review and has not yet been finalized. See Preliminary First
Quarter 2021 Results section within this release.
|
Condensed
Consolidated Statements of Operations
(Unaudited)(1)
|
|
|
|
13 weeks
ended
|
(in millions, except
per share amounts)
|
|
May 2,
2020
|
|
May 4,
2019
|
Sales
|
|
$
|
852.1
|
|
|
$
|
1,431.7
|
|
Cost of
sales
|
|
(648.3)
|
|
|
(932.3)
|
|
Restructuring charges
- cost of sales
|
|
0.4
|
|
|
—
|
|
Gross
margin
|
|
204.2
|
|
|
499.4
|
|
Selling, general and
administrative expenses
|
|
(358.4)
|
|
|
(475.2)
|
|
Restructuring
charges
|
|
(12.7)
|
|
|
(26.8)
|
|
Asset
impairments
|
|
(136.3)
|
|
|
—
|
|
Other operating
income, net
|
|
12.1
|
|
|
—
|
|
Operating income
(loss)
|
|
(291.1)
|
|
|
(2.6)
|
|
Interest expense,
net
|
|
(7.1)
|
|
|
(9.2)
|
|
Other non-operating
income, net
|
|
0.1
|
|
|
0.3
|
|
Income (loss) before
income taxes
|
|
(298.1)
|
|
|
(11.5)
|
|
Income tax
benefit
|
|
107.7
|
|
|
1.5
|
|
Net income
(loss)
|
|
$
|
(190.4)
|
|
|
$
|
(10.0)
|
|
Dividends on
redeemable convertible preferred shares
|
|
(8.2)
|
|
|
(8.2)
|
|
Net income (loss)
attributable to common shareholders
|
|
$
|
(198.6)
|
|
|
$
|
(18.2)
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
Basic
|
|
$
|
(3.83)
|
|
|
$
|
(0.35)
|
|
Diluted
|
|
$
|
(3.83)
|
|
|
$
|
(0.35)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
Basic
|
|
51.8
|
|
|
51.6
|
|
Diluted
|
|
51.8
|
|
|
51.6
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
—
|
|
|
$
|
0.37
|
|
|
|
(1)
|
Pre-tax impairment
charges are preliminary and include an impairment charge of
approximately $42.3 million against long lived assets with a
carrying value of approximately $100 million, which remains under
review and has not yet been finalized. See Preliminary First
Quarter 2021 Results section within this release.
|
Condensed
Consolidated Balance Sheets
(Unaudited)(1)
|
|
(in millions, except
par value per share amount)
|
|
May 2,
2020
|
|
February 1,
2020
|
|
May 4,
2019
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,066.6
|
|
|
$
|
374.5
|
|
|
$
|
195.1
|
|
Accounts
receivable
|
|
29.8
|
|
|
38.8
|
|
|
23.1
|
|
Other current
assets
|
|
326.7
|
|
|
403.5
|
|
|
205.5
|
|
Income
taxes
|
|
199.2
|
|
|
6.3
|
|
|
4.8
|
|
Inventories
|
|
2,392.2
|
|
|
2,331.7
|
|
|
2,394.2
|
|
Total current
assets
|
|
4,014.5
|
|
|
3,154.8
|
|
|
2,822.7
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property, plant and
equipment, net of accumulated depreciation of $1,092.6, $1,064.7
and $1,319.6, respectively
|
|
687.1
|
|
|
741.9
|
|
|
776.1
|
|
Operating lease
right-of-use assets
|
|
1,541.4
|
|
|
1,683.3
|
|
|
1,822.8
|
|
Goodwill
|
|
238.0
|
|
|
248.8
|
|
|
296.4
|
|
Intangible assets,
net
|
|
178.7
|
|
|
263.8
|
|
|
264.1
|
|
Other
assets
|
|
204.9
|
|
|
201.8
|
|
|
189.2
|
|
Deferred tax
assets
|
|
12.1
|
|
|
4.7
|
|
|
22.0
|
|
Total
assets
|
|
$
|
6,876.7
|
|
|
$
|
6,299.1
|
|
|
$
|
6,193.3
|
|
Liabilities,
Redeemable convertible preferred shares, and Shareholders'
equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Loans and
overdrafts
|
|
$
|
22.2
|
|
|
$
|
95.6
|
|
|
$
|
43.7
|
|
Accounts
payable
|
|
329.1
|
|
|
227.9
|
|
|
238.3
|
|
Accrued expenses and
other current liabilities
|
|
627.6
|
|
|
697.0
|
|
|
420.2
|
|
Deferred
revenue
|
|
271.2
|
|
|
266.2
|
|
|
277.0
|
|
Operating lease
liabilities
|
|
390.3
|
|
|
338.2
|
|
|
358.9
|
|
Income
taxes
|
|
27.8
|
|
|
27.7
|
|
|
24.1
|
|
Total current
liabilities
|
|
1,668.2
|
|
|
1,652.6
|
|
|
1,362.2
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
1,336.0
|
|
|
515.9
|
|
|
639.0
|
|
Operating lease
liabilities
|
|
1,334.8
|
|
|
1,437.7
|
|
|
1,589.4
|
|
Other
liabilities
|
|
112.3
|
|
|
116.6
|
|
|
126.0
|
|
Deferred
revenue
|
|
719.8
|
|
|
731.5
|
|
|
699.6
|
|
Deferred tax
liabilities
|
|
97.7
|
|
|
5.2
|
|
|
—
|
|
Total
liabilities
|
|
5,268.8
|
|
|
4,459.5
|
|
|
4,416.2
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Series A redeemable
convertible preferred shares of $.01 par value: authorized 500
shares, 0.625 shares outstanding (February 1, 2020 and May 4, 2019:
0.625 shares outstanding)
|
|
617.4
|
|
|
617.0
|
|
|
615.7
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Common shares of
$0.18 par value: authorized 500 shares, 52.3 shares outstanding
(February 1, 2020: 52.3 outstanding; May 4, 2019: 52.2
outstanding)
|
|
12.6
|
|
|
12.6
|
|
|
12.6
|
|
Additional paid-in
capital
|
|
246.4
|
|
|
245.4
|
|
|
232.7
|
|
Other
reserves
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
Treasury shares at
cost: 17.7 shares (February 1, 2020: 17.7 shares; May 4, 2019: 17.8
shares)
|
|
(985.2)
|
|
|
(984.9)
|
|
|
(999.8)
|
|
Retained
earnings
|
|
2,044.1
|
|
|
2,242.9
|
|
|
2,223.4
|
|
Accumulated other
comprehensive loss
|
|
(327.8)
|
|
|
(293.8)
|
|
|
(307.9)
|
|
Total shareholders'
equity
|
|
990.5
|
|
|
1,222.6
|
|
|
1,161.4
|
|
Total liabilities,
redeemable convertible preferred shares and shareholders'
equity
|
|
$
|
6,876.7
|
|
|
$
|
6,299.1
|
|
|
$
|
6,193.3
|
|
|
|
(1)
|
Pre-tax impairment
charges are preliminary and include an impairment charge of
approximately $42.3 million against long lived assets with a
carrying value of approximately $100 million, which remains under
review and has not yet been finalized. See Preliminary First
Quarter 2021 Results section within this release.
|
Condensed
Consolidated Statements of Cash Flows
(Unaudited)(1)
|
|
|
|
13 weeks
ended
|
(in
millions)
|
|
May 2,
2020
|
|
May 4,
2019
|
Cash flows from
operating activities
|
|
|
|
|
Net income
(loss)
|
|
$
|
(190.4)
|
|
|
$
|
(10.0)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
37.3
|
|
|
41.0
|
|
Amortization of
unfavorable leases and contracts
|
|
(1.4)
|
|
|
(1.4)
|
|
Share-based
compensation
|
|
1.4
|
|
|
4.0
|
|
Deferred
taxation
|
|
85.6
|
|
|
—
|
|
Asset
Impairments
|
|
136.3
|
|
|
—
|
|
Restructuring
charges
|
|
6.7
|
|
|
5.4
|
|
Other non-cash
movements
|
|
0.6
|
|
|
(4.9)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Decrease in accounts
receivable
|
|
8.6
|
|
|
0.9
|
|
Decrease in other
assets and other receivables
|
|
73.4
|
|
|
28.1
|
|
Increase in
inventories
|
|
(77.2)
|
|
|
(7.8)
|
|
Increase in accounts
payable
|
|
99.0
|
|
|
87.7
|
|
Decrease in accrued
expenses and other liabilities
|
|
(49.6)
|
|
|
(39.9)
|
|
Change in operating
lease assets and liabilities
|
|
61.4
|
|
|
(4.1)
|
|
(Decrease) increase
in deferred revenue
|
|
(5.0)
|
|
|
10.5
|
|
Changes in income tax
receivable and payable
|
|
(193.2)
|
|
|
(2.7)
|
|
Pension plan
contributions
|
|
(1.1)
|
|
|
(1.4)
|
|
Net cash (used in)
provided by operating activities
|
|
(7.6)
|
|
|
105.4
|
|
Investing
activities
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(7.7)
|
|
|
(24.6)
|
|
Purchase of
available-for-sale securities
|
|
—
|
|
|
(6.1)
|
|
Proceeds from sale of
available-for-sale securities
|
|
1.3
|
|
|
0.3
|
|
Net cash used in
investing activities
|
|
(6.4)
|
|
|
(30.4)
|
|
Financing
activities
|
|
|
|
|
Dividends paid on
common shares
|
|
(19.3)
|
|
|
(19.2)
|
|
Dividends paid on
redeemable convertible preferred shares
|
|
(7.8)
|
|
|
(7.8)
|
|
Repayments of term
loans
|
|
—
|
|
|
(8.9)
|
|
Proceeds from
revolving credit facilities
|
|
900.0
|
|
|
—
|
|
Repayments of
revolving credit facilities
|
|
(80.0)
|
|
|
—
|
|
Decrease of bank
overdrafts
|
|
(74.0)
|
|
|
(37.3)
|
|
Other financing
activities
|
|
(4.9)
|
|
|
(1.5)
|
|
Net cash provided by
(used in) financing activities
|
|
714.0
|
|
|
(74.7)
|
|
Cash and cash
equivalents at beginning of period
|
|
374.5
|
|
|
195.4
|
|
Increase in cash and
cash equivalents
|
|
700.0
|
|
|
0.3
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(7.9)
|
|
|
(0.6)
|
|
Cash and cash
equivalents at end of period
|
|
$
|
1,066.6
|
|
|
$
|
195.1
|
|
|
|
(1)
|
Pre-tax impairment
charges are preliminary and include an impairment charge of
approximately $42.3 million against long lived assets with a
carrying value of approximately $100 million, which remains under
review and has not yet been finalized. See Preliminary First
Quarter 2021 Results section within this release.
|
Real Estate Portfolio:
Signet has a diversified real estate portfolio. On May 2,
2020, Signet had 3,172 stores totaling 4.6 million square feet of
selling space. In the first quarter, store count decreased by 36
and square feet of selling space decreased 1.0%.
Store count by
banner
|
February 1,
2020
|
|
Openings
|
|
Closures
|
|
May 2,
2020
|
North America
segment
|
2,757
|
|
|
—
|
|
|
(21)
|
|
|
2,736
|
|
International
segment
|
451
|
|
|
—
|
|
|
(15)
|
|
|
436
|
|
Signet
|
3,208
|
|
|
—
|
|
|
(36)
|
|
|
3,172
|
|
View original
content:http://www.prnewswire.com/news-releases/signet-jewelers-reports-q1-results-and-accelerated-digital-focus-301072512.html
SOURCE Signet Jewelers Ltd.