HAMILTON, Bermuda, April 12, 2021 /PRNewswire/ -- Signet Jewelers
Limited ("Signet") (NYSE:SIG), the world's largest retailer of
diamond jewelry, today is increasing its Fiscal 2022 first quarter
and full year guidance.
Signet has seen stronger than expected conversion and average
ticket values in the first quarter. The Company believes this
topline strength is likely due to a combination of traction from
strategic initiatives as well as tailwinds from stimulus, tax
refunds and consumer enthusiasm on the heels of vaccine rollouts –
particularly during the Company's guest appreciation events in late
March.
In addition, the Company has evaluated the impact of inventory
delays related to recent COVID-19 surges in India and other parts of the world. At
this time, Signet believes it has mitigated these short-term
impacts; however, if the duration and magnitude of these inventory
slowdowns intensify, there could be future negative impacts on the
Company's full year guidance.
Fiscal 2022 Guidance
|
Updated
Guidance
|
|
Guidance as of
3/18/21
|
|
First
Quarter
|
|
Full
Year
|
|
First
Quarter
|
|
Full
Year
|
Total revenue (in
billions)
|
$1.57 to
$1.60
|
|
$6.00 to
$6.14
|
|
$1.42 to
$1.46
|
|
$5.85 to
$6.00
|
Same store sales
(1)
|
97% to 99%
|
|
17% to 20%
|
|
80% to 84%
|
|
14% to 17%
|
Non-GAAP operating
income (in millions) (2)
|
$85 to
$100
|
|
$335 to
$364
|
|
$40 to $60
|
|
$290 to
$324
|
|
|
|
|
|
|
|
|
(1) Same store sales include physical
stores and eCommerce sales
|
|
|
|
(2) See description of non-GAAP
measures below
|
|
|
|
|
Forecasted non-GAAP operating income provided above excludes
potential non-recurring charges. However, given the potential
impact of non-recurring charges to the GAAP operating income, we
cannot provide forecasted GAAP operating income or the probable
significance of such items without unreasonable efforts. As such,
we do not present a reconciliation of forecasted non-GAAP operating
income to corresponding GAAP operating income.
The Company is reiterating the following underlying assumptions
supporting its Full Year Fiscal 2022 Guidance:
- Signet expects stronger sales performance in the first half of
the fiscal year. As the vaccine rollout progresses, there could be
a shift of consumer discretionary spending away from the jewelry
category toward experience-oriented categories, the magnitude and
timing of which is difficult to predict. Further, Signet expects
categories with pent up demand to be promotional in order to
capture discretionary spend. As such, the Company is planning for
increased marketing expenses to continue to fuel momentum in the
front half as well as to proactively manage against shifts in
consumer spending as the year progresses. While Signet's
transformational initiatives continue to gain traction, the Company
is conservatively planning for same store sales to be negative in
the second half of the fiscal year. Depending on the timing and
extent of potential shifts in spending, future results could differ
materially from current guidance.
- The Company's Inspiring Brilliance strategy requires additional
investments in digital and technology to further strengthen our
competitive advantage and long-term positioning within the jewelry
category. To partially mitigate the increased level of investment,
gross cost savings of $50 million -
$75 million are expected in Fiscal
2022, with continued benefits from closed stores and operational
efficiencies. Cost savings are expected to benefit both SG&A
and gross margin.
- Signet has planned Fiscal 2022 capital expenditures in the
range of $150 million to $175 million, reflecting continued investments in
technology and innovation. Recall that the Company reduced its
capital expenditures in Fiscal 2021 to $83
million given the cash conservation focus in response to the
pandemic.
- The Company is planning to close over 100 stores in Fiscal 2022
and will open up to 100 locations, primarily in highly efficient
kiosks.
- Continued uncertainty surrounding multiple factors include the
magnitude and potential resurgence of COVID-19 in key trade areas,
extended duration of heightened unemployment, supply chain
disruptions and macro or governmental influences on consumers'
ability to spend, particularly in discretionary categories like
jewelry. Further, there can be no assurance that preliminary
quarter to date trends will continue for the remainder of the first
quarter and are not indicative of future performance. Please see
disclosures within the Safe Harbor Statement for other risk
factors.
Virtual Investor Event Reminder
The Company will host a virtual investor event today,
Monday, April 12, 2021. The event
will start at 2 p.m. EST and members
of Signet's leadership team will discuss the next phase of the
Company's growth strategy, Inspiring Brilliance, and long-term
goals for approximately 75 minutes.
Please register at
https://signet.gosessionnow.com/registration.html. Registration is
required in advance to receive a unique link to view the event.
Non-GAAP Measures
In addition to financial measures calculated and presented in
accordance with accounting principles generally accepted in the US
("GAAP"), 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 and the Company's guidance
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 the Company's consolidated
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.
About Signet and Safe Harbor Statement
Signet Jewelers Limited is the world's largest retailer of
diamond jewelry. Signet operates approximately 2,800 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," "preliminary," "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 it is
necessary to temporarily reclose our stores, distribution centers
and corporate facilities or for our suppliers and vendors to
temporarily reclose their facilities; 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 behaviors such as
spending and willingness to congregate in shopping centers 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,
including due to technology disruptions, future financial results
and operating results and/or disruptions arising from changes to or
termination of the relevant non-prime outsourcing agreement
requiring transition to alternative arrangements through other
providers or alternative payment options and our ability to
successfully establish future arrangements for the forward-flow
receivables; 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 including the ability to continue to utilize extended
payment terms and the 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; our ability to optimize
Signet's multi-year strategy to gain market share, expand and
improve existing services, innovate and achieve sustainable,
long-term growth; the maintenance and continued innovation 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;
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 Item 1A, Risk
Factors, and elsewhere in the Annual Report on Form 10-K for the
year ended January 30, 2021 filed
with the SEC on March 19, 2021.
Signet undertakes no obligation to update or revise any
forward-looking statements to reflect subsequent events or
circumstances, except as required by law.
Investors:
Vinnie Sinisi
SVP Investor Relations & Treasury
+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
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SOURCE Signet Jewelers Ltd.