HAMILTON, Bermuda, Sept. 2, 2021 /PRNewswire/ -- Signet
Jewelers Limited ("Signet") (NYSE:SIG), the world's largest
retailer of diamond jewelry, today announced its results for the 13
weeks ended July 31, 2021 ("second quarter Fiscal 2022").
"Our Signet team delivered strong second quarter top and bottom
line performance with continued execution of our Inspiring
Brilliance strategy, enabling us to maximize jewelry category
strength and capture share over the last year," said Virginia C. Drosos, Chief Executive Officer.
"Our performance this quarter demonstrates that our banner value
propositions, product newness, always-on marketing and connected
commerce experiences are resonating with new and loyal customers.
We are raising our guidance for the year reflecting our business
strength and confidence in our growth strategy while remaining
cautious regarding the impacts of the macro environment,
particularly in the fourth quarter. I'm proud and
appreciative of our team - they continue to embrace our new
consumer inspired capabilities with excellence."
"We expanded our share repurchase authorization to $225 million, reflecting our confidence in
Signet's long-term growth opportunities. Our performance this
quarter generated strong cash flow from operating activities as
well as incremental cost savings. Our cash position reflects the
efficiency and focus of our now 3.5 years of transformation and
provides for further investment as we remain focused on our capital
priorities to invest in our growth strategy, progress toward our
leverage goals, as well as return capital to shareholders," said
Joan Hilson, Chief Financial and
Strategy Officer.
Second Quarter Fiscal 2022 Highlights:
- Total sales were $1.8 billion, an
increase of more than $900 million to
Q2 of FY21 and more than $423 million
to Q2 of FY20.
- Q2 same store sales ("SSS") up 97.4% (1) to Q2 of
FY21 and up 38.1% to Q2 of FY20.
- eCommerce sales were $336.2
million, up 24.5% to Q2 of FY21 and up 114.3% to Q2 of
FY20.
- Brick and mortar SSS up 130.8% to Q2 of FY21 and up 27.5% to Q2
of FY20.
- GAAP operating income of $225.4
million, up from a loss of $89.7
million in Q2 of FY21 and a loss of $22.4 million in Q2 of FY20.
- Non-GAAP operating income of $223.0
million, up from a loss of $41.7
million in Q2 of FY21 and income of $53.1 million in Q2 of FY20.
- GAAP diluted earnings per share ("EPS") of $3.60, up from a loss per share of $1.73 in Q2 of FY21 and a loss per share of
$0.86 in Q2 of FY20.
- Non-GAAP diluted EPS(2) of $3.57, an increase from a loss per share of
$1.13 in Q2 of FY21 and EPS of
$0.51 in Q2 of FY20.
- Cash flow from operating activities to date of $458.5 million, including $81.3 million from the sale of credit card
receivables, up more than $300
million and $210 million to
this time in FY21 and FY20, respectively.
(1) Same store sales
include physical store sales and eCommerce sales.
|
(2) See non-GAAP
reconciliation page.
|
|
|
|
|
Fiscal 22
Q2
|
|
Fiscal 21
Q2
|
|
Fiscal 20
Q2
|
Sales ($ in
millions)
|
|
$
|
1,788.1
|
|
|
$
|
888.0
|
|
|
$
|
1,364.4
|
|
SSS % change
(1)
|
|
97.4
|
%
|
|
(31.3)
|
%
|
|
(1.5)
|
%
|
GAAP
|
|
|
|
|
|
|
Operating income
(loss)
|
|
$
|
225.4
|
|
|
$
|
(89.7)
|
|
|
$
|
(22.4)
|
|
Operating income
(loss) as % of sales
|
|
12.6
|
%
|
|
(10.1)
|
%
|
|
(1.6)
|
%
|
GAAP Diluted
EPS
|
|
$
|
3.60
|
|
|
$
|
(1.73)
|
|
|
$
|
(0.86)
|
|
Non-GAAP
(2)
|
|
|
|
|
|
|
Non-GAAP operating
income (loss)
|
|
$
|
223.0
|
|
|
$
|
(41.7)
|
|
|
$
|
53.1
|
|
Non-GAAP operating
income (loss) as % of sales
|
|
12.5
|
%
|
|
(4.7)
|
%
|
|
3.9
|
%
|
Non-GAAP Diluted
EPS
|
|
$
|
3.57
|
|
|
$
|
(1.13)
|
|
|
$
|
0.51
|
|
|
(1) Same store sales
include physical store sales and eCommerce sales.
|
(2) See non-GAAP
reconciliation page.
|
Second Quarter Fiscal 2022 Results:
|
Change
from previous year
|
|
|
Second Quarter
Fiscal 2022
|
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
|
97.6
|
%
|
|
1.8
|
%
|
|
99.4
|
%
|
|
0.6
|
%
|
|
100.0
|
%
|
|
$
|
1,645.7
|
|
International
segment
|
95.1
|
%
|
|
(1.2)
|
%
|
|
93.9
|
%
|
|
20.4
|
%
|
|
114.3
|
%
|
|
$
|
130.7
|
|
Other segment
(1)
|
—
|
%
|
|
192.5
|
%
|
|
192.5
|
%
|
|
—
|
%
|
|
192.5
|
%
|
|
$
|
11.7
|
|
Signet
|
97.4
|
%
|
|
2.0
|
%
|
|
99.4
|
%
|
|
2.0
|
%
|
|
101.4
|
%
|
|
$
|
1,788.1
|
|
|
(1)
Includes sales from Signet's diamond sourcing
initiative.
|
By operating segment:
North America
- North America SSS increased 97.6% versus last year (40.2%
versus 2 years ago), with broad-based category strength. Average
transaction value ("ATV") increased 10.0% and the number of
transactions increased 70.1% compared to the second quarter last
year.
- Brick and mortar SSS grew 130.4% versus last year (29.4% versus
2 years ago). eCommerce sales grew 25.8% versus last year (117.2%
versus 2 years ago).
International
- International SSS increased 95.1% versus last year (18.2%
versus 2 years ago). ATV decreased 4.5% and the number of
transactions increased 89.5% compared to the second quarter of last
year.
- Brick and mortar SSS grew 136.0% versus last year (9.7% versus
2 years ago). eCommerce sales grew 9.7% versus last year (81.7%
versus 2 years ago).
GAAP gross margin was $717.6
million, or 40.1% of sales, up 1,480 bps versus the prior
year quarter and up 650 bps versus the second quarter of FY20. The
majority of gross margin rate improvement was driven by leveraging
of fixed costs such as occupancy, further enhanced by real estate
optimization and merchandise strategies.
SG&A was $502.6 million, or
28.1% of sales, 180 bps favorable to the prior year quarter and 210
bps favorable to the second quarter of FY20. The rate improvement
was primarily driven by higher store labor productivity and more
favorable terms with credit partners, partially offset by higher
marketing investments.
GAAP operating income was $225.4
million or 12.6% of sales. The operating income compares to
an operating loss of $89.7 million,
or (10.1)% of sales in the prior year second quarter and operating
loss of $22.4 million, or (1.6)% of
sales in Q2 of FY20.
Non-GAAP operating income was $223.0
million, or 12.5% of sales, compared to Non-GAAP operating
loss of $41.7 million, or (4.7)% of
sales in prior year second quarter and non-GAAP operating income of
$53.1 million, or 3.9% of sales in Q2
of FY20.
|
|
Second quarter
Fiscal 2022
|
|
Second quarter
Fiscal 2021
|
GAAP Operating
income (loss) in millions
|
|
$
|
|
% of
sales
|
|
$
|
|
% of
sales
|
North America
segment
|
|
$
|
237.3
|
|
|
14.4
|
%
|
|
$
|
(57.0)
|
|
|
(6.9)
|
%
|
International
segment
|
|
15.5
|
|
|
11.9
|
%
|
|
(15.6)
|
|
|
(25.6)
|
%
|
Other
segment
|
|
(0.1)
|
|
|
(0.9)
|
%
|
|
(0.2)
|
|
|
(5.0)
|
%
|
Corporate and
unallocated expenses
|
|
(27.3)
|
|
|
nm
|
|
(16.9)
|
|
|
nm
|
Total GAAP operating
income (loss)
|
|
$
|
225.4
|
|
|
12.6
|
%
|
|
$
|
(89.7)
|
|
|
(10.1)
|
%
|
|
|
|
|
Second quarter
Fiscal 2022
|
|
Second quarter
Fiscal 2021
|
Non-GAAP Operating
income (loss) in millions (1)
|
|
$
|
|
% of
sales
|
|
$
|
|
% of
sales
|
North America
segment
|
|
$
|
235.5
|
|
|
14.3
|
%
|
|
$
|
(12.0)
|
|
|
(1.5)
|
%
|
International
segment
|
|
15.5
|
|
|
11.9
|
%
|
|
(11.8)
|
|
|
(19.3)
|
%
|
Other
segment
|
|
(0.1)
|
|
|
(0.9)
|
%
|
|
(0.2)
|
|
|
(4.0)
|
%
|
Corporate and
unallocated expenses
|
|
(27.9)
|
|
|
nm
|
|
(17.7)
|
|
|
nm
|
Total Non-GAAP
operating income (loss)
|
|
$
|
223.0
|
|
|
12.5
|
%
|
|
$
|
(41.7)
|
|
|
(4.7)
|
%
|
|
(1) See non-GAAP
reconciliation page.
|
nm Not
meaningful
|
The current quarter GAAP income tax benefit was $3.5 million including a discrete tax benefit of
$49.8 million resulting from the
reversal of the valuation allowance recorded against certain state
deferred tax assets as the Company's performance has improved
significantly since the allowance was recorded. This compares
to an income tax benefit of $17.2
million in the prior year second quarter.
GAAP Diluted EPS was $3.60,
including the gain on sale of in-house credit receivables.
Excluding that gain, diluted EPS was $3.57 on a non-GAAP basis. GAAP and non-GAAP
diluted EPS in the quarter includes the dilutive impact of the
preferred shares in the share count based on the level of net
income this quarter.
Balance Sheet and Statement of Cash Flows Highlights:
Total liquidity was $2.8 billion
at quarter end, consisting of cash of $1.6
billion and $1.2 billion
available on the revolving credit facility. Ending inventory was
$2.0 billion, a reduction of more
than $185 million to Q2 of FY21. Long
term debt was $146.9 million,
compared to $1.3 billion at the end
of the prior year second quarter. Additionally, the Company has
preferred share obligations of $651.3
million, compared to $625.6
million at the end of the prior year second quarter.
Return of Capital:
The Company's capital priorities remain: 1) investing in the
business 2) targeting an Adjusted Debt to EBITDAR ratio below 3.0x
and 3) returning capital to shareholders. Aligned with returning
capital, the Company has increased its share repurchase
authorization from $166 million to a
total of $225 million which it will
evaluate on an opportunistic basis.
Signet's Board of Directors has, subsequent to quarter end,
declared a quarterly cash dividend on common shares of $0.18 per share for the third quarter of Fiscal
2022, payable November 26, 2021 to
shareholders of record on October 29,
2021, with an ex-dividend date of October 28, 2021.
Fiscal 2022 Guidance:
|
Third
Quarter
|
|
Fiscal
2022
|
|
Previous
Fiscal
2022
|
Total revenue (in
billions)
|
$1.26 to
$1.31
|
|
$6.80 to
$6.95
|
|
$6.50 to
$6.65
|
Same store sales
(1)
|
(3%) to 1%
|
|
30% to 33%
|
|
24% to 27%
|
Non-GAAP operating
income (2) (in millions)
|
$10 to $25
|
|
$618 to
$673
|
|
$490 to
$545
|
|
(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's Third Quarter and Fiscal 2022 Outlook is based on
the following assumptions:
- Continued uncertainty regarding macroeconomic factors exists,
including but not limited to the magnitude and duration of COVID-19
resurgence through the Delta variant in key trade areas, extended
duration of heightened unemployment, supply chain disruptions,
pricing environment changes (including, but not limited to,
materials, labor, fulfillment and advertising costs) and government
support policies which can impact consumers' ability to spend,
particularly in discretionary categories like jewelry. Further,
there can be no assurance that second quarter results and trends
will continue for the remainder of the fiscal year and such results
and trends are not indicative of future performance. Please see
disclosures within the Safe Harbor Statement for other risk
factors.
- While not experienced to-date, Signet continues to expect a
shift of consumer discretionary spending away from the jewelry
category toward experience-oriented categories within the second
half of the fiscal year. The Delta variant has added complexity in
predicting the magnitude and timing of this shift. As such,
negative low-to-mid single digit same store sales are implied in
the fourth quarter. The Company is planning for increased marketing
expense and promotions in the back half of the fiscal year to
proactively manage against shifts in consumer spending. Depending
on the timing and extent of potential shifts in spending, future
results could differ materially from current guidance.
- The Company has increased its gross cost savings expectations
for Fiscal 2022 to $85 million to
$105 million from $75 million to $95
million. Signet's continues to identify cost savings to
partially mitigate the additional investments required in digital
and technology to further strengthen the Company's competitive
advantage and long-term positioning within the jewelry category.
Cost savings are expected to benefit both SG&A and gross
margin.
- Signet has narrowed its planned Fiscal 2022 capital
expenditures to a range of $190
million to $200 million from
$175 million to $200 million.
- The Company expects to close over 100 stores in Fiscal 2022 and
open up to 100 locations, primarily in highly efficient Piercing
Pagoda formats.
- Signet's efforts to mitigate supply chain disruption amongst
the pandemic impact on India have
been effective thus far. Guidance assumes no material supply chain
disruptions for the remainder of the year.
- Signet continues to put the health and safety of its employees
and customers first and will close stores in the event that either
is at risk; however, guidance does not contemplate large scale
store closures resulting from COVID-19 variants.
- As previously announced, the Company recently entered into an
agreement to wind up its U.K. pension scheme. As such, the
Company expects to recognize non-cash, non-operating pre-tax
settlement charges totaling approximately $125 million to $150
million by the time the transaction is completed, subject to
finalization of any applicable adjustments, true up costs, and the
impact of foreign currency. However, the amount of such settlement
charges that will be recognized in Fiscal 2022 and thereby impact
Fiscal 2022 GAAP earnings cannot be forecasted.
Our Purpose and Sustainable Growth:
As a company with a purpose-inspired business strategy, Signet
is committed to ongoing leadership in Corporate Citizenship &
Sustainability and views ESG initiatives as an important growth
driver. Accordingly, Signet released its set of 44 Corporate
Sustainability Goals in June of this quarter. As members of the UN
Global Compact, Signet continues its commitment to the Sustainable
Development Goals through business operations and philanthropic
efforts. For example, in an effort to bring the Company's legacy
corporate giving program in line with its broader Sustainability
strategy, Signet has also successfully launched the Signet Love
Inspires Foundation. The Foundation's grant-making policy is
aligned with the United Nations Sustainable Development Goals to
meaningfully measure Signet's impact towards solving the world's
most pressing problems, focusing on underserved women and children,
and social change advocacy.
Conference Call:
A conference call is scheduled for September 2, 2021 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: +1-844-750-4866
International Dial-in: +1-412-317-5109
Conference call participants may also pre-register at:
https://dpregister.com/sreg/10158960/eb8f404130
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 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 could have in the future,
on Signet's business, financial condition, profitability and cash
flows; the effect of steps we take in response to the pandemic; the
severity, duration and potential resurgence of the pandemic
(including through variants), 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 willingness to
congregate in shopping centers and shifts in spending away from the
jewelry category 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
strategies; 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, planned
share repurchases 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, as well as management of its digital
marketing costs; 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 team members; 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 new information technology
systems which impact financial reporting; 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 corporate taxation
rates, 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 or deductions associated with payments to foreign
related parties that are subject to a low effective tax rate; 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; 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 2021
Annual Report on Form 10-K filed with the SEC on March 19,
2021 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:
Vinnie
Sinisi
SVP Investor Relations & Treasury
+1-330-665-6530
vincent.sinisi@signetjewelers.com
Media:
Colleen
Rooney
Chief Communications & ESG 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
directly 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 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 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.
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 in-house finance 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 does not represent the residual cash flow available for
discretionary purposes.
|
|
26 weeks
ended
|
(in millions)
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
Net cash provided by
operating activities
|
|
$
|
458.5
|
|
|
$
|
156.1
|
|
|
$
|
246.6
|
|
Purchase of property,
plant and equipment
|
|
(32.2)
|
|
|
(23.6)
|
|
|
(52.2)
|
|
Free cash
flow
|
|
426.3
|
|
|
132.5
|
|
|
194.4
|
|
Proceeds from sale of
in-house finance receivables
|
|
(81.3)
|
|
|
—
|
|
|
—
|
|
Adjusted free cash
flow (excluding sale of in-house finance receivables)
|
|
$
|
345.0
|
|
|
$
|
132.5
|
|
|
$
|
194.4
|
|
|
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions)
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
|
July 31,
2021
|
|
August 1,
2020
|
Gross
margin
|
|
$
|
717.6
|
|
|
$
|
224.3
|
|
|
$
|
458.7
|
|
|
$
|
1,396.0
|
|
|
$
|
428.5
|
|
Restructuring charges
- cost of sales
|
|
—
|
|
|
(0.2)
|
|
|
4.4
|
|
|
—
|
|
|
(0.6)
|
|
Non-GAAP Gross
Margin
|
|
$
|
717.6
|
|
|
$
|
224.1
|
|
|
$
|
463.1
|
|
|
$
|
1,396.0
|
|
|
$
|
427.9
|
|
|
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions)
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
|
July 31,
2021
|
|
August 1,
2020
|
Total GAAP operating
income (loss)
|
|
$
|
225.4
|
|
|
$
|
(89.7)
|
|
|
$
|
(22.4)
|
|
|
$
|
394.1
|
|
|
$
|
(389.3)
|
|
Charges related to
transformation plan
|
|
(0.9)
|
|
|
28.7
|
|
|
27.8
|
|
|
(1.6)
|
|
|
41.0
|
|
Asset impairments,
net (1)
|
|
(0.1)
|
|
|
20.3
|
|
|
47.7
|
|
|
(0.3)
|
|
|
156.6
|
|
Rocksbox
acquisition-related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
Gain on sale of
in-house finance receivables
|
|
(1.4)
|
|
|
—
|
|
|
—
|
|
|
(1.4)
|
|
|
—
|
|
Shareholder
settlement
|
|
—
|
|
|
(1.0)
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
Total non-GAAP
operating income (loss)
|
|
$
|
223.0
|
|
|
$
|
(41.7)
|
|
|
$
|
53.1
|
|
|
$
|
391.9
|
|
|
$
|
(184.2)
|
|
|
(1)
Includes asset impairments, net recorded due to the various impacts
of COVID-19 to the Company's business and related gains on
terminations or modifications of leases, resulting from previously
recorded impairments of the right of use assets in Fiscal
2021.
|
|
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions)
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
|
July 31,
2021
|
|
August 1,
2020
|
North America segment
GAAP operating income (loss)
|
|
$
|
237.3
|
|
|
$
|
(57.0)
|
|
|
$
|
11.8
|
|
|
$
|
449.3
|
|
|
$
|
(291.2)
|
|
Charges related to
transformation plan
|
|
(0.3)
|
|
|
27.5
|
|
|
14.1
|
|
|
(1.0)
|
|
|
36.0
|
|
Asset impairments,
net (1)
|
|
(0.1)
|
|
|
17.5
|
|
|
47.7
|
|
|
(0.3)
|
|
|
135.4
|
|
Gain on sale of
in-house finance receivables
|
|
(1.4)
|
|
|
—
|
|
|
—
|
|
|
(1.4)
|
|
|
—
|
|
Rocksbox
acquisition-related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
North America segment
non-GAAP operating income (loss)
|
|
$
|
235.5
|
|
|
$
|
(12.0)
|
|
|
$
|
73.6
|
|
|
$
|
447.7
|
|
|
$
|
(119.8)
|
|
|
(1)
Includes asset impairments, net recorded due to the various impacts
of COVID-19 to the Company's business and related gains on
terminations or modifications of leases, resulting from previously
recorded impairments of the right of use assets in Fiscal
2021.
|
|
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions)
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
|
July 31,
2021
|
|
August 1,
2020
|
International segment
GAAP operating income (loss)
|
|
$
|
15.5
|
|
|
$
|
(15.6)
|
|
|
$
|
(1.6)
|
|
|
$
|
(4.2)
|
|
|
$
|
(54.2)
|
|
Charges related to
transformation plan
|
|
—
|
|
|
1.0
|
|
|
0.6
|
|
|
—
|
|
|
4.6
|
|
Asset impairments,
net (1)
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
21.2
|
|
International segment
non-GAAP operating income (loss)
|
|
$
|
15.5
|
|
|
$
|
(11.8)
|
|
|
$
|
(1.0)
|
|
|
$
|
(4.2)
|
|
|
$
|
(28.4)
|
|
|
(1)
Includes asset impairments, net recorded due to the various impacts
of COVID-19 to the Company's business and related gains on
terminations or modifications of leases, resulting from previously
recorded impairments of the right of use assets in Fiscal
2021.
|
|
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions)
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
|
July 31,
2021
|
|
August 1,
2020
|
Other segment GAAP
operating income (loss)
|
|
$
|
(0.1)
|
|
|
$
|
(0.2)
|
|
|
$
|
(9.1)
|
|
|
$
|
(1.0)
|
|
|
$
|
(0.5)
|
|
Charges related to
transformation plan
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
Other segment
non-GAAP operating income (loss)
|
|
$
|
(0.1)
|
|
|
$
|
(0.2)
|
|
|
$
|
(6.4)
|
|
|
$
|
(1.0)
|
|
|
$
|
(0.5)
|
|
|
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions)
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
|
July 31,
2021
|
|
August 1,
2020
|
Corporate and
unallocated expenses GAAP operating income (loss)
|
|
$
|
(27.3)
|
|
|
$
|
(16.9)
|
|
|
$
|
(23.5)
|
|
|
$
|
(50.0)
|
|
|
$
|
(43.4)
|
|
Charges related to
transformation plan
|
|
(0.6)
|
|
|
0.2
|
|
|
10.4
|
|
|
(0.6)
|
|
|
0.4
|
|
Shareholder
settlement
|
|
—
|
|
|
(1.0)
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
Corporate and
unallocated expenses non-GAAP operating income (loss)
|
|
$
|
(27.9)
|
|
|
$
|
(17.7)
|
|
|
$
|
(13.1)
|
|
|
$
|
(50.6)
|
|
|
$
|
(35.5)
|
|
|
|
|
13 weeks
ended
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
GAAP effective tax
rate
|
(1.6)
|
%
|
|
17.4
|
%
|
|
(11.8)
|
%
|
Charges related to
transformation plan
|
(0.1)
|
%
|
|
(10.9)
|
%
|
|
(7.1)
|
%
|
Asset impairments,
net
|
—
|
%
|
|
(5.3)
|
%
|
|
39.0
|
%
|
Rocksbox
acquisition-related costs
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Gain on sale of
in-house finance receivables
|
(0.2)
|
%
|
|
—
|
%
|
|
—
|
%
|
Shareholder
settlement
|
—
|
%
|
|
(0.8)
|
%
|
|
—
|
%
|
Non-GAAP effective
tax rate
|
(1.9)
|
%
|
|
0.4
|
%
|
|
20.1
|
%
|
|
|
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
|
|
July 31,
2021
|
|
August 1,
2020
|
|
August 3,
2019
|
|
July 31,
2021
|
|
August 1,
2020
|
GAAP Diluted
EPS
|
|
$
|
3.60
|
|
|
$
|
(1.73)
|
|
|
$
|
(0.86)
|
|
|
$
|
5.84
|
|
|
$
|
(5.69)
|
|
Charges related to
transformation plan
|
|
(0.01)
|
|
|
0.55
|
|
|
0.54
|
|
|
(0.02)
|
|
|
0.79
|
|
Asset impairments,
net
|
|
—
|
|
|
0.39
|
|
|
0.92
|
|
|
—
|
|
|
3.02
|
|
Rocksbox
acquisition-related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Shareholder
settlement
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
|
—
|
|
|
0.14
|
|
Gain on sale of
in-house finance receivables
|
|
(0.02)
|
|
|
—
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Tax impact of items
above
|
|
—
|
|
|
(0.32)
|
|
|
(0.09)
|
|
|
(0.01)
|
|
|
(0.98)
|
|
Non-GAAP Diluted
EPS
|
|
$
|
3.57
|
|
|
$
|
(1.13)
|
|
|
$
|
0.51
|
|
|
$
|
5.81
|
|
|
$
|
(2.72)
|
|
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions, except
per share amounts)
|
|
July 31,
2021
|
|
August 1,
2020
|
|
July 31,
2021
|
|
August 1,
2020
|
Sales
|
|
$
|
1,788.1
|
|
|
$
|
888.0
|
|
|
$
|
3,476.9
|
|
|
$
|
1,740.1
|
|
Cost of
sales
|
|
(1,070.5)
|
|
|
(663.9)
|
|
|
(2,080.9)
|
|
|
(1,312.2)
|
|
Restructuring charges
- cost of sales
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.6
|
|
Gross
margin
|
|
717.6
|
|
|
224.3
|
|
|
1,396.0
|
|
|
428.5
|
|
Selling, general and
administrative expenses
|
|
(502.6)
|
|
|
(265.9)
|
|
|
(1,014.6)
|
|
|
(624.3)
|
|
Restructuring
charges
|
|
0.9
|
|
|
(28.9)
|
|
|
1.6
|
|
|
(41.6)
|
|
Asset impairments,
net
|
|
0.2
|
|
|
(20.3)
|
|
|
(1.3)
|
|
|
(156.6)
|
|
Other operating
income, net
|
|
9.3
|
|
|
1.1
|
|
|
12.4
|
|
|
4.7
|
|
Operating income
(loss)
|
|
225.4
|
|
|
(89.7)
|
|
|
394.1
|
|
|
(389.3)
|
|
Interest expense,
net
|
|
(4.4)
|
|
|
(9.4)
|
|
|
(8.3)
|
|
|
(16.5)
|
|
Other non-operating
income, net
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
Income (loss) before
income taxes
|
|
221.1
|
|
|
(98.9)
|
|
|
386.0
|
|
|
(405.5)
|
|
Income tax benefit
(expense)
|
|
3.5
|
|
|
17.2
|
|
|
(23.0)
|
|
|
126.7
|
|
Net income
(loss)
|
|
$
|
224.6
|
|
|
$
|
(81.7)
|
|
|
$
|
363.0
|
|
|
$
|
(278.8)
|
|
Dividends on
redeemable convertible preferred shares
|
|
(8.6)
|
|
|
(8.3)
|
|
|
(17.2)
|
|
|
(16.5)
|
|
Net income (loss)
attributable to common shareholders
|
|
$
|
216.0
|
|
|
$
|
(90.0)
|
|
|
$
|
345.8
|
|
|
$
|
(295.3)
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
4.10
|
|
|
$
|
(1.73)
|
|
|
$
|
6.60
|
|
|
$
|
(5.69)
|
|
Diluted
|
|
$
|
3.60
|
|
|
$
|
(1.73)
|
|
|
$
|
5.84
|
|
|
$
|
(5.69)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
52.7
|
|
|
52.0
|
|
|
52.4
|
|
|
51.9
|
|
Diluted
|
|
62.4
|
|
|
52.0
|
|
|
62.2
|
|
|
51.9
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.18
|
|
|
$
|
—
|
|
|
$
|
0.18
|
|
|
$
|
—
|
|
Condensed Consolidated Balance Sheets (Unaudited)
(in millions, except
par value per share amount)
|
|
July 31,
2021
|
|
January 30,
2021
|
|
August 1,
2020
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,573.8
|
|
|
$
|
1,172.5
|
|
|
$
|
1,204.0
|
|
Accounts receivable,
net
|
|
13.9
|
|
|
88.7
|
|
|
31.5
|
|
Other current
assets
|
|
175.0
|
|
|
236.6
|
|
|
182.9
|
|
Income
taxes
|
|
54.9
|
|
|
51.7
|
|
|
251.3
|
|
Inventories
|
|
2,004.7
|
|
|
2,032.5
|
|
|
2,193.1
|
|
Total current
assets
|
|
3,822.3
|
|
|
3,582.0
|
|
|
3,862.8
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property, plant and
equipment, net of accumulated depreciation and amortization of
$1,241.3, $1,198.1 and $1,119.3, respectively
|
|
533.2
|
|
|
605.5
|
|
|
645.8
|
|
Operating lease
right-of-use assets
|
|
1,256.2
|
|
|
1,362.2
|
|
|
1,459.9
|
|
Goodwill
|
|
245.1
|
|
|
238.0
|
|
|
238.0
|
|
Intangible assets,
net
|
|
189.7
|
|
|
179.0
|
|
|
179.0
|
|
Other
assets
|
|
244.1
|
|
|
195.8
|
|
|
179.0
|
|
Deferred tax
assets
|
|
21.3
|
|
|
16.4
|
|
|
13.6
|
|
Total
assets
|
|
$
|
6,311.9
|
|
|
$
|
6,178.9
|
|
|
$
|
6,578.1
|
|
Liabilities,
Redeemable convertible preferred shares, and Shareholders'
equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Loans and
overdrafts
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
Accounts
payable
|
|
730.6
|
|
|
812.6
|
|
|
302.2
|
|
Accrued expenses and
other current liabilities
|
|
463.9
|
|
|
494.1
|
|
|
442.0
|
|
Deferred
revenue
|
|
297.9
|
|
|
288.7
|
|
|
330.9
|
|
Operating lease
liabilities
|
|
322.1
|
|
|
377.3
|
|
|
391.0
|
|
Income
taxes
|
|
25.6
|
|
|
26.0
|
|
|
28.7
|
|
Total current
liabilities
|
|
1,840.5
|
|
|
1,998.7
|
|
|
1,499.4
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
146.9
|
|
|
146.7
|
|
|
1,336.1
|
|
Operating lease
liabilities
|
|
1,052.2
|
|
|
1,147.3
|
|
|
1,263.3
|
|
Other
liabilities
|
|
123.2
|
|
|
111.1
|
|
|
108.9
|
|
Deferred
revenue
|
|
809.4
|
|
|
783.3
|
|
|
699.3
|
|
Deferred tax
liabilities
|
|
132.9
|
|
|
159.2
|
|
|
129.1
|
|
Total
liabilities
|
|
4,105.1
|
|
|
4,346.3
|
|
|
5,036.1
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Series A redeemable
convertible preferred shares of $.01 par value: authorized 500
shares, 0.625 shares outstanding (January 30, 2021 and
August 1, 2020: 0.625 shares outstanding)
|
|
651.3
|
|
|
642.3
|
|
|
625.6
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Common shares of $.18
par value: authorized 500 shares, 53.0 shares outstanding
(January 30, 2021 and August 1, 2020: 52.3
outstanding)
|
|
12.6
|
|
|
12.6
|
|
|
12.6
|
|
Additional paid-in
capital
|
|
266.8
|
|
|
258.8
|
|
|
250.8
|
|
Other
reserves
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
Treasury shares at
cost: 17.0 shares (January 30, 2021 and August 1, 2020:
17.7 shares)
|
|
(951.0)
|
|
|
(980.2)
|
|
|
(981.1)
|
|
Retained
earnings
|
|
2,509.3
|
|
|
2,189.2
|
|
|
1,943.7
|
|
Accumulated other
comprehensive loss
|
|
(282.6)
|
|
|
(290.5)
|
|
|
(310.0)
|
|
Total shareholders'
equity
|
|
1,555.5
|
|
|
1,190.3
|
|
|
916.4
|
|
Total liabilities,
redeemable convertible preferred shares and shareholders'
equity
|
|
$
|
6,311.9
|
|
|
$
|
6,178.9
|
|
$
|
6,578.1
|
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
26 weeks
ended
|
(in
millions)
|
|
July 31,
2021
|
|
August 1,
2020
|
Cash flows from
operating activities
|
|
|
|
|
Net income
(loss)
|
|
$
|
363.0
|
|
|
$
|
(278.8)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
83.7
|
|
|
84.8
|
|
Amortization of
unfavorable contracts
|
|
(2.4)
|
|
|
(2.7)
|
|
Share-based
compensation
|
|
25.5
|
|
|
6.3
|
|
Deferred
taxation
|
|
(33.2)
|
|
|
115.0
|
|
Asset
impairments
|
|
1.3
|
|
|
156.6
|
|
Restructuring
charges
|
|
—
|
|
|
11.5
|
|
Other non-cash
movements
|
|
(0.9)
|
|
|
0.7
|
|
Changes in operating
assets and liabilities, net of acquisition:
|
|
|
|
|
Decrease in accounts
receivable
|
|
18.5
|
|
|
7.0
|
|
Proceeds from sale of
in-house finance receivables
|
|
81.3
|
|
|
—
|
|
Decrease in other
assets and other receivables
|
|
29.7
|
|
|
244.0
|
|
Decrease in
inventories
|
|
33.9
|
|
|
135.3
|
|
Increase (decrease) in
accounts payable
|
|
(95.6)
|
|
|
65.5
|
|
Decrease in accrued
expenses and other liabilities
|
|
(29.6)
|
|
|
(241.1)
|
|
Changes in operating
lease assets and liabilities
|
|
(44.7)
|
|
|
64.2
|
|
Increase in deferred
revenue
|
|
34.2
|
|
|
32.9
|
|
Changes in income tax
receivable and payable
|
|
(3.8)
|
|
|
(243.0)
|
|
Pension plan
contributions
|
|
(2.4)
|
|
|
(2.1)
|
|
Net cash provided by
operating activities
|
|
458.5
|
|
|
156.1
|
|
Investing
activities
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(32.2)
|
|
|
(23.6)
|
|
Purchase of
available-for-sale securities
|
|
(1.0)
|
|
|
—
|
|
Proceeds from sale of
available-for-sale securities
|
|
2.9
|
|
|
3.1
|
|
Acquisition of
Rocksbox Inc., net of cash acquired
|
|
(14.4)
|
|
|
—
|
|
Net cash used in
investing activities
|
|
(44.7)
|
|
|
(20.5)
|
|
Financing
activities
|
|
|
|
|
Dividends paid on
common shares
|
|
—
|
|
|
(19.3)
|
|
Dividends paid on
redeemable convertible preferred shares
|
|
(8.2)
|
|
|
(7.8)
|
|
Proceeds from
revolving credit facilities
|
|
—
|
|
|
900.0
|
|
Repayments of
revolving credit facilities
|
|
—
|
|
|
(80.0)
|
|
Payment of debt
issuance costs
|
|
(3.6)
|
|
|
—
|
|
Increase (decrease)
of bank overdrafts
|
|
0.4
|
|
|
(86.8)
|
|
Other financing
activities
|
|
(4.5)
|
|
|
(9.8)
|
|
Net cash (used in)
provided by financing activities
|
|
(15.9)
|
|
|
696.3
|
|
Cash and cash
equivalents at beginning of period
|
|
1,172.5
|
|
|
374.5
|
Increase in cash and
cash equivalents
|
|
397.9
|
|
|
831.9
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
3.4
|
|
|
(2.4)
|
|
Cash and cash
equivalents at end of period
|
|
$
|
1,573.8
|
|
|
$
|
1,204.0
|
|
Real Estate Portfolio:
Signet has a diversified real estate portfolio. On July 31,
2021, Signet had 2,837 stores totaling 4.2 million square feet of
selling space. In the second quarter, store count increased by 4
stores and square feet of selling space decreased 0.2%. Compared to
year-end Fiscal 2021, store count increased by 4 stores and square
feet of selling space decreased 0.4%.
Store count by
segment
|
January 30,
2021
|
|
Openings
|
|
Closures
|
|
July 31,
2021
|
North America
segment
|
2,481
|
|
27
|
|
(22)
|
|
2,486
|
International
segment
|
352
|
|
—
|
|
(1)
|
|
351
|
Signet
|
2,833
|
|
27
|
|
(23)
|
|
2,837
|
View original
content:https://www.prnewswire.com/news-releases/signet-jewelers-reports-second-quarter-results-above-expectations-and-raises-fy22-guidance-301368013.html
SOURCE Signet Jewelers Ltd.