Delivers double-digit operating margin and
reaffirms annual guidance
Inventory discipline providing flexibility,
delivering working capital efficiencies and enabling strategic
investments
HAMILTON, Bermuda, Sept. 1,
2022 /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 30, 2022 ("second quarter Fiscal
2023").
"Signet's focus on gaining market share, driving further
operating efficiencies, and building capabilities that are true
competitive advantages, is putting us in a position to deliver
long-term growth and increase shareholder value," said Virginia C. Drosos, Chief Executive Officer.
"Our results demonstrate the continued agility of our Signet team,
the strength of our differentiated banner portfolio, and the
flexibility of our operating model. This is all underpinned
by a balance sheet that enables us to continue to make strategic
investments such as our recent acquisition of Blue Nile."
"The discipline of our Signet team delivered $1.8 billion in revenue and a 10.6% operating
margin, despite a softer topline environment," said Joan Hilson, Chief Financial and Strategy
Officer. "Our working capital efficiency reflects inventory levels
down year over year, excluding acquisitions. This gives us the
confidence that we are well positioned to deliver newness with
minimal levels of clearance for the Holidays."
Second Quarter
Fiscal 2023 Highlights:
- Total sales were $1.8 billion,
down $33.2 million or 1.9% to a
record Q2 of FY22, and up 29% vs. Q2 of FY20.
- Same store sales ("SSS") down 8.2% (1) to Q2 of
FY22.
- GAAP operating income of $186.8
million, down from $225.4
million in Q2 of FY22, including $6.4
million related to the fair value adjustment of acquired
inventory as well as acquisition-related charges.
- Non-GAAP operating income(2) of $193.2 million, down from $223.0 million in Q2 of FY22 and up from
$53.1 million in Q2 of FY20.
- GAAP diluted earnings per share ("EPS") of $2.58, down from diluted EPS of $3.60 in Q2 of FY22, including $0.09 in charges relating to the fair value
adjustment of acquired inventory as well as acquisition-related
charges.
- Non-GAAP diluted EPS(2) of $2.68, down from $3.57 in Q2 of FY22.
- Cash and cash equivalents, at quarter end, of $851.7 million, down approximately $722 million to Q2 of FY22 reflecting share
repurchases and inventory in-stock replenishment, as well as the
acquisition of Diamonds Direct in the prior year.
- Year to date cash used for operating activities of $114.9 million, down approximately $573 million to Q2 of FY22 and driven by
inventory in-stock replenishment.
- Completed $22.8 million of share
repurchases during the second quarter.
(1)
|
Same store sales
include physical stores and eCommerce sales. Diamonds Direct is
excluded.
|
(2)
|
See non-GAAP
reconciliation page.
|
(in millions, except
per share amounts)
|
|
Fiscal 23
Q2
|
|
Fiscal 22
Q2
|
|
Fiscal 20
Q2
|
|
YTD Fiscal
2023
|
|
YTD Fiscal
2022
|
Sales
|
|
$ 1,754.9
|
|
$ 1,788.1
|
|
$ 1,364.4
|
|
$ 3,593.2
|
|
$ 3,476.9
|
SSS % change
(1)
|
|
(8.2) %
|
|
97.4 %
|
|
(1.5) %
|
|
(3.0) %
|
|
101.7 %
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
186.8
|
|
$
225.4
|
|
$ (22.4)
|
|
$
187.0
|
|
$
394.1
|
Operating income as %
of sales
|
|
10.6 %
|
|
12.6 %
|
|
(1.6) %
|
|
5.2 %
|
|
11.3 %
|
GAAP Diluted EPS (loss
per share)
|
|
$ 2.58
|
|
$ 3.60
|
|
$ (0.86)
|
|
$ 0.90
|
|
$ 5.84
|
Non-GAAP
(2)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
income
|
|
$
193.2
|
|
$
223.0
|
|
$ 53.1
|
|
$
387.8
|
|
$
391.9
|
Non-GAAP operating
income as % of sales
|
|
11.0 %
|
|
12.5 %
|
|
3.9 %
|
|
10.8 %
|
|
11.3 %
|
Non-GAAP Diluted
EPS
|
|
$ 2.68
|
|
$ 3.57
|
|
$ 0.51
|
|
$ 5.55
|
|
$ 5.81
|
|
|
(1)
|
Same store sales
include physical stores and eCommerce sales. Diamonds Direct is
excluded.
|
(2)
|
See non-GAAP
reconciliation page.
|
|
|
Second Quarter
Fiscal 2023 Results:
|
Change
from previous year
|
|
|
Second Quarter
Fiscal 2023
|
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
|
(8.7) %
|
|
7.1 %
|
|
(1.6) %
|
|
(0.2) %
|
|
(1.8) %
|
|
$
1,616.4
|
International
segment
|
(1.5) %
|
|
2.3 %
|
|
0.8 %
|
|
(15.4) %
|
|
(14.6) %
|
|
$ 111.6
|
Other segment
(1)
|
nm
|
|
nm
|
|
nm
|
|
nm
|
|
nm
|
|
$ 26.9
|
Signet
|
(8.2) %
|
|
7.7 %
|
|
(0.5) %
|
|
(1.4) %
|
|
(1.9) %
|
|
$
1,754.9
|
|
|
(1)
|
Includes sales from
Signet's diamond sourcing initiative.
|
nm
|
Not
meaningful.
|
|
|
By reportable segment:
North America
- Total sales of $1.6 billion, down
1.8% to Q2 of FY22.
- SSS declined 8.7% to Q2 of FY22 reflecting higher average
transaction value ("ATV") but a lower number of transactions.
International
- Total sales of $111.6 million,
down 14.6% to Q2 of FY22.
- SSS declined 1.5% versus Q2 of FY22 reflecting higher ATV but a
lower number of transactions.
GAAP gross margin was $664.7
million, or 37.9% of sales, down 220 basis
points to the second quarter last year. This reflects
occupancy cost deleverage on lower sales and the strength of
Diamonds Direct's bridal business which carries a lower relative
margin, while organic banners had similar merchandise margins to
last year. Additionally, the lower rate is a result of technology
investments and absence of the COVID-related tax abatements within
Signet's UK operations.
SG&A was $477.3 million, or
27.2% of sales, an improvement of 90 basis points to the
second quarter last year. This improvement reflects the impact of
lower payroll-related costs, enhanced credit agreements finalized
in Fiscal 2022, and the efficiency of Diamonds Direct's operating
model, partially offset by labor and technology investments.
GAAP and non-GAAP operating income in the prior year second
quarter included other income of $9.0
million related to UK government grants as well as interest
income from the Company's credit card program, which was sold in
the second quarter of Fiscal 2022.
GAAP operating income was $186.8
million or 10.6% of sales, compared to $225.4 million, or 12.6% of sales in the
prior year second quarter.
Non-GAAP operating income was $193.2
million, or 11.0% of sales, compared to $223.0 million, or 12.5% of sales in prior
year second quarter. Non-GAAP operating income excluded
$6.4 million in charges relating
to the fair value adjustment of acquired inventory and
acquisition-related charges.
|
|
Second
quarter Fiscal 2023
|
|
Second
quarter Fiscal 2022
|
GAAP Operating
income in millions
|
|
$
|
|
% of
sales
|
|
$
|
|
% of
sales
|
North America
segment
|
|
$
210.1
|
|
13.0 %
|
|
$
237.3
|
|
14.4 %
|
International
segment
|
|
(2.0)
|
|
(1.8) %
|
|
15.5
|
|
11.9 %
|
Other
segment
|
|
1.8
|
|
nm
|
|
(0.1)
|
|
nm
|
Corporate and
unallocated expenses
|
|
(23.1)
|
|
nm
|
|
(27.3)
|
|
nm
|
Total GAAP operating
income
|
|
$
186.8
|
|
10.6 %
|
|
$
225.4
|
|
12.6 %
|
|
|
|
|
|
|
|
|
|
|
|
Second
quarter Fiscal 2023
|
|
Second
quarter Fiscal 2022
|
Non-GAAP Operating
income in millions (1)
|
|
$
|
|
% of
sales
|
|
$
|
|
% of
sales
|
North America
segment
|
|
$
216.5
|
|
13.4 %
|
|
$
235.5
|
|
14.3 %
|
International
segment
|
|
(2.0)
|
|
(1.8) %
|
|
15.5
|
|
11.9 %
|
Other
segment
|
|
1.8
|
|
nm
|
|
(0.1)
|
|
nm
|
Corporate and
unallocated expenses
|
|
(23.1)
|
|
nm
|
|
(27.9)
|
|
nm
|
Total Non-GAAP
operating income
|
|
$
193.2
|
|
11.0 %
|
|
$
223.0
|
|
12.5 %
|
|
|
(1)
|
See non-GAAP
reconciliation page.
|
nm
|
Not
meaningful
|
|
|
The current quarter GAAP income tax expense was $35.6 million compared to an income tax benefit
of $3.5 million in the
prior year second quarter. On a non-GAAP basis, income tax expense
was $37.3 million compared to
income tax benefit of $4.2
million in the prior year second quarter. The prior year
GAAP and non-GAAP tax benefit included the release of the valuation
allowance related to certain state deferred tax assets.
GAAP diluted EPS was $2.58,
including $0.09 in charges relating
to the fair value adjustment of acquired inventory as well as
acquisition-related charges, and $0.01 related to additional buy-out of U.K.
pension obligations. Excluding these charges (and related tax
effects), diluted EPS was $2.68 on a non-GAAP basis.
GAAP EPS and non-GAAP EPS for the second quarter of Fiscal 2023
include the dilutive impact of the preferred shares in the dilutive
share count based on the level of net income this quarter.
Balance Sheet and Statement of
Cash Flows Highlights:
Year to date cash used for operating activities of $114.9 million as of Q2 Fiscal 2023 compared
to cash provided by operating activities of $458.5 million last year. Cash and cash
equivalents were $851.7 million as of
quarter end, compared to $1.6 billion
last year. The year over year change to cash and cash equivalents
was primarily driven by share repurchases and inventory in-stock
replenishment, as well as the acquisition of Diamonds Direct in the
prior year.
Ending inventory was $2.2 billion, up approximately $186.1 million to the second quarter last year as
a result of the Company's acquisition of Diamonds Direct in
November 2021 which was partially
offset by lower inventory levels in the rest of the Company.
Return of Capital:
Signet's Board of Directors has declared a quarterly cash
dividend on common shares from $0.20 per share for the third quarter of
Fiscal 2023, payable November 25,
2022 to shareholders of record on October 28, 2022, with an ex-dividend date of
October 27, 2022.
During the first half of Fiscal 2023, Signet repurchased
approximately 4.7 million shares at an average cost per share
of $72.14 or $341.0 million including $22.8 million during the second quarter
and $50 million from the completion
of the accelerated share repurchase program from Fiscal 2022.
Approximately $622.4 million remains under the
Company's authorization.
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 Environmental, Social and Governance
("ESG") initiatives as an important growth driver. The
"Signet Promise," our appointed commitment to customers holds our
global suppliers to high ethical standards and prioritizes respect
for human rights. In turn, we provide consumer confidence and
continuously improve the integrity of our global diamond supply
chain through our four-layered system of checks and balances.
Fiscal
2023 Guidance:
Signet is reaffirming its full year Fiscal 2023 revenue and
operating income guidance which is provided on a non-GAAP
basis.
|
Third
Quarter
|
|
Fiscal
2023
|
Total revenue (in
billions)
|
$1.46 to
1.49
|
|
$7.60 to
$7.70
|
Operating income
(1) (in millions)
|
$20 to 34
|
|
$787 to $828
|
Diluted EPS
(1)(2)
|
|
|
$10.98 to
$11.57
|
|
|
(1)
|
See description of
non-GAAP measures below.
|
(2)
|
EPS range reflects
updated assumptions and share repurchases completed in the second
quarter.
|
|
|
Forecasted non-GAAP operating income provided above excludes the
operations of Blue Nile following the acquisition on August 19, as well as potential non-recurring
charges, such as transaction and integration-related costs
associated with the acquisition of Blue Nile and
the potential impacts of purchase
accounting. However, given the potential impacts of
these items 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 full year Fiscal 2023 Outlook is
based on the following assumptions:
- The Company's outlook includes a level of consumer pressure,
including inflation and the impact of stimulus, similar to what is
currently being experienced. The Company's outlook does not include
1) a material worsening of macroeconomic factors which could impact
consumer spending patterns and have associated impacts on business
performance; 2) the acquisition of Blue Nile, Inc.
- Signet continues to anticipate some shift of consumer
discretionary spending away from the jewelry category reflecting
pent-up demand for experience-oriented categories during the
year.
- Signet's efforts to mitigate supply chain disruption have been
effective thus far. Guidance assumes no significant disruptions in
availability of inventory.
- The Company's outlook factors in a level of promotion.
- Annual effective tax rate of approximately 18% assumes no
additional discrete items and no changes in current tax laws during
the remainder of Fiscal 2023.
- The above guidance excludes non-recurring charges for Fiscal
2023 related to the resolution of previously disclosed legal matter
of $190 million, approximately
$11 million relating to the fair
value adjustment of acquired inventory that will be recognized
within cost of sales in Fiscal 2023, and the non-cash,
non-operating charges for the buy-out of substantially all of the
UK pension obligations of approximately $133
million.
- Earnings per share excludes any further share repurchases.
- Planned capital investments up to $250
million, reflecting continued investments in connected
commerce capabilities, banner differentiation and technology
harmonization.
Conference Call:
A conference call is scheduled for September 1,
2022 at 8:30 a.m. ET and a
simultaneous audio webcast is available at www.signetjewelers.com.
The call details are:
Toll Free US Dial-in: 1-844-200-6205
Toll Free Canada Dial-in: 1-833-950-0062
International Dial-In: +1 929-526-1599
Access Code: 305452
Conference call participants may also pre-register at:
https://www.netroadshow.com/events/login?show=0b7606f0&confId=39667
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. As a purpose-driven and sustainability-focused
company, Signet is a participant in the United Nations Global
Compact and adheres to its principles-based approach to responsible
business. Signet is a Great Place to Work –Certified™ company and
has been named to the Bloomberg Gender-Equality Index for four
consecutive years. Signet operates approximately 2,800 stores
primarily under the name brands of Kay Jewelers, Zales, Jared,
Banter by Piercing Pagoda, Diamonds Direct, JamesAllen.com, Blue
Nile, Peoples, H. Samuel, Ernest
Jones and the jewelry subscription service, Rocksbox.
Further information on Signet is available at
www.signetjewelers.com. See also www.kay.com, www.zales.com,
www.jared.com, www.banter.com,
www.diamondsdirect.com, www.jamesallen.com,
www.peoplesjewellers.com, www.hsamuel.co.uk, www.ernestjones.co.uk,
www.rocksbox.com and www.bluenile.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, results of operations, 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: difficulty or delay in
executing or integrating an acquisition, including Blue Nile, or
executing other major business or strategic initiatives, 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
COVID-19 has on many of the risks described herein, including
without limitation risks relating to disruptions in our supply
chain, our ability to attract and retain labor especially if
COVID-19 vaccine mandates are implemented, decelerating levels of
consumer confidence and consumer behaviors such as willingness to
patronize shopping centers and shifts in spending away from
the jewelry category toward more experiential purchases such
as travel, the impacts of the expiration of government stimulus on
overall consumer spending, 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, including impacts of , the cessation of
government stimulus programs, or other pricing environment
factors on the Company's commodity costs (including diamonds) or
other operating costs; a prolonged slowdown in the growth of the
jewelry market or a recession in the overall economy; financial
market risks; a decline in consumer discretionary spending or
deterioration in consumer financial position, including due
to the impacts of inflation and rising prices on necessities
such as gas and groceries; our ability to optimize Signet's
transformation strategies; 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
outsourcing agreements; 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 (including execution of accelerated 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; future legislative and regulatory
requirements in the US and globally relating to climate change,
including any new climate related disclosure or compliance
requirements, such as those recently proposed by the SEC; 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,
including any impact on the global market supply of diamonds due to
the ongoing Russia-Ukraine conflict or related sanctions;
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 its ability 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 - particularly in regions experiencing low
unemployment rates; 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; 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, organized crime or
theft, strikes, protests, riots or terrorism, acts of war
(including the ongoing Russia-Ukraine conflict), 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
2022 Annual Report on Form 10-K filed with the SEC on
March 17, 2022 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
+1-330-665-6530
vincent.sinisi@signetjewelers.com
Media:
Lindsay
Hymson
Vice President Financial Communications & Media Relations
+1 516 524 1757
Lindsay.hymson@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 condensed 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 (used in) 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. Free cash flow and adjusted free
cash flow are indicators used by management frequently in
evaluating its overall liquidity and determining appropriate
capital allocation strategies. Free cash flow and adjusted free
cash flow do not represent the residual cash flow available for
discretionary purposes.
|
|
26 weeks
ended
|
(in millions)
|
|
July 30,
2022
|
|
July 31,
2021
|
Net cash (used in)
provided by operating activities
|
|
$
(114.9)
|
|
$
458.5
|
Purchase of property,
plant and equipment
|
|
(58.2)
|
|
(32.2)
|
Free cash
flow
|
|
(173.1)
|
|
426.3
|
Proceeds from sale of
in-house finance receivables
|
|
—
|
|
(81.3)
|
Adjusted free cash
flow
|
|
$
(173.1)
|
|
$
345.0
|
|
|
13 weeks
ended
|
26 weeks
ended
|
(in millions)
|
|
July 30,
2022
|
|
July 31,
2021
|
|
July 30,
2022
|
|
July 31,
2021
|
Gross margin
|
|
$
664.7
|
|
$
717.6
|
|
$
1,388.4
|
|
$
1,396.0
|
Inventory step-up -
cost of sales
|
|
5.8
|
|
—
|
|
10.2
|
|
—
|
Non-GAAP Gross
Margin
|
|
$
670.5
|
|
$
717.6
|
|
$
1,398.6
|
|
$
1,396.0
|
|
|
|
13 weeks
ended
|
26 weeks
ended
|
(in millions)
|
|
July 30,
2022
|
|
July 31,
2021
|
|
July 30,
2022
|
|
July 31,
2021
|
Selling, general and
administrative expenses
|
|
$
477.3
|
|
$
502.6
|
|
$
1,010.4
|
|
$
1,014.6
|
Acquisition-related
costs
|
|
0.6
|
|
—
|
|
0.6
|
|
1.1
|
Non-GAAP selling,
general and administrative expenses
|
|
$
477.9
|
|
$
502.6
|
|
$
1,011.0
|
|
$
1,015.7
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions)
|
|
July 30,
2022
|
|
July 31,
2021
|
|
August 3,
2019
|
|
July 30,
2022
|
|
July 31,
2021
|
Total GAAP operating
income
|
|
$
186.8
|
|
$
225.4
|
|
$
(22.4)
|
|
$
187.0
|
|
$
394.1
|
Credits related to
transformation plan
|
|
—
|
|
(0.9)
|
|
27.8
|
|
—
|
|
(1.6)
|
Asset impairments, net
(1)
|
|
—
|
|
(0.1)
|
|
47.7
|
|
—
|
|
(0.3)
|
Acquisition-related
costs (2)
|
|
6.4
|
|
—
|
|
—
|
|
10.8
|
|
1.1
|
Gain on sale of
in-house finance
receivables
|
|
—
|
|
(1.4)
|
|
—
|
|
—
|
|
(1.4)
|
Litigation
charges
|
|
—
|
|
—
|
|
—
|
|
190.0
|
|
—
|
Total non-GAAP
operating income
|
|
$
193.2
|
|
$
223.0
|
|
$
53.1
|
|
$
387.8
|
|
$
391.9
|
|
|
(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.
|
(2)
|
Acquisition-related
costs include the impact of the fair value step-up for inventory
from Diamonds Direct, as well as professional fees for direct
transaction-related costs incurred for the acquisitions of Blue
Nile and Rocksbox in the second quarter of Fiscal 2023 and first
quarter of Fiscal 2022, respectively.
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions)
|
|
July 30,
2022
|
|
July 31,
2021
|
|
July 30,
2022
|
|
July 31,
2021
|
North America segment
GAAP operating income
|
|
$
210.1
|
|
$
237.3
|
|
$
234.9
|
|
$
449.3
|
Credits related to
transformation plan
|
|
—
|
|
(0.3)
|
|
—
|
|
(1.0)
|
Asset impairments, net
(1)
|
|
—
|
|
(0.1)
|
|
—
|
|
(0.3)
|
Gain on sale of
in-house finance receivables
|
|
—
|
|
(1.4)
|
|
—
|
|
(1.4)
|
Litigation
charges
|
|
—
|
|
—
|
|
190.0
|
|
—
|
Acquisition-related
costs (2)
|
|
6.4
|
|
—
|
|
10.8
|
|
1.1
|
North America segment
non-GAAP operating income
|
|
$
216.5
|
|
$
235.5
|
|
$
435.7
|
|
$
447.7
|
|
|
(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.
|
(2)
|
Acquisition-related
costs include the impact of the fair value step-up for inventory
from Diamonds Direct, as well as professional fees for direct
transaction-related costs incurred for the acquisitions of Blue
Nile and Rocksbox in the second quarter of Fiscal 2023 and first
quarter of Fiscal 2022, respectively.
|
|
|
13 weeks
ended
|
26 weeks
ended
|
(in millions)
|
|
July 30,
2022
|
|
July 31,
2021
|
|
July 30,
2022
|
|
July 31,
2021
|
Corporate and
unallocated expenses GAAP operating
loss
|
|
$
(23.1)
|
|
$
(27.3)
|
|
$
(44.3)
|
|
$
(50.0)
|
Credits related to
transformation plan
|
|
—
|
|
(0.6)
|
|
—
|
|
(0.6)
|
Corporate and
unallocated expenses non-GAAP
operating loss
|
|
$
(23.1)
|
|
$
(27.9)
|
|
$
(44.3)
|
|
$
(50.6)
|
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in
millions)
|
|
July 30,
2022
|
|
July 31,
2021
|
|
July 30,
2022
|
|
July 31,
2021
|
GAAP income tax expense
(benefit)
|
|
$
35.6
|
|
$
(3.5)
|
|
$
(19.6)
|
|
$
23.0
|
Credits related to
transformation plan
|
|
—
|
|
(0.3)
|
|
—
|
|
(0.5)
|
Pension settlement
loss
|
|
0.2
|
|
—
|
|
25.2
|
|
—
|
Acquisition-related
costs (1)
|
|
1.5
|
|
—
|
|
2.6
|
|
0.1
|
Gain on sale of
in-house finance receivables
|
|
—
|
|
(0.4)
|
|
—
|
|
(0.4)
|
Litigation
charges
|
|
—
|
|
—
|
|
47.7
|
|
—
|
Non-GAAP income tax
expense (benefit)
|
|
$
37.3
|
|
$
(4.2)
|
|
$
55.9
|
|
$
22.2
|
|
|
(1)
|
Acquisition-related
costs include the impact of the fair value step-up for inventory
from Diamonds Direct, as well as professional fees for direct
transaction-related costs incurred for the acquisitions of Blue
Nile and Rocksbox in the second quarter of Fiscal 2023 and first
quarter of Fiscal 2022, respectively.
|
|
13 weeks
ended
|
|
July 30,
2022
|
|
July 31,
2021
|
GAAP effective tax
rate
|
19.7 %
|
|
(1.6) %
|
Credits related to
transformation plan
|
— %
|
|
(0.1) %
|
Acquisition-related
costs (1)
|
0.1 %
|
|
— %
|
Gain on sale of
in-house finance receivables
|
— %
|
|
(0.2) %
|
Non-GAAP effective tax
rate
|
19.8 %
|
|
(1.9) %
|
|
|
(1)
|
Acquisition-related
costs include the impact of the fair value step-up for inventory
from Diamonds Direct, as well as professional fees for direct
transaction-related costs incurred for the acquisitions of Blue
Nile and Rocksbox in the second quarter of Fiscal 2023 and first
quarter of Fiscal 2022, respectively.
|
|
|
13 weeks
ended
|
|
26 weeks
ended
|
|
|
July 30,
2022
|
|
July 31,
2021
|
|
August 3,
2019
|
|
July 30,
2022
|
|
July 31,
2021
|
GAAP Diluted
EPS
|
|
$
2.58
|
|
$
3.60
|
|
$
(0.86)
|
|
$
0.90
|
|
$
5.84
|
Charges (credits)
related to
transformation plan
|
|
—
|
|
(0.01)
|
|
0.54
|
|
—
|
|
(0.02)
|
Asset impairments,
net
|
|
—
|
|
—
|
|
0.92
|
|
—
|
|
—
|
Pension settlement
loss
|
|
0.02
|
|
—
|
|
—
|
|
2.67
|
|
—
|
Litigation
charges
|
|
—
|
|
—
|
|
—
|
|
3.82
|
|
—
|
Acquisition-related
costs (1)
|
|
0.11
|
|
—
|
|
—
|
|
0.22
|
|
0.02
|
Gain on sale of
in-house finance
receivables
|
|
—
|
|
(0.02)
|
|
—
|
|
—
|
|
(0.02)
|
Dilution effect
(2)
|
|
—
|
|
—
|
|
—
|
|
(0.53)
|
|
—
|
Tax impact of items
above
|
|
(0.03)
|
|
—
|
|
(0.09)
|
|
(1.53)
|
|
(0.01)
|
Non-GAAP Diluted
EPS
|
|
$
2.68
|
|
$
3.57
|
|
$
0.51
|
|
$
5.55
|
|
$
5.81
|
|
|
(1)
|
Acquisition-related
costs include the impact of the fair value step-up for inventory
from Diamonds Direct, as well as professional fees for direct
transaction-related costs incurred for the acquisitions of Blue
Nile and Rocksbox in the second quarter of Fiscal 2023 and first
quarter of Fiscal 2022, respectively.
|
(2)
|
The adjusted diluted
weighted average common shares outstanding for the 26 weeks ended
July 30, 2022 includes the dilutive effect of the
8.0 million preferred shares which were excluded from the
calculation of GAAP diluted EPS for the same period, as their
effect was antidilutive.
|
|
|
Condensed Consolidated Statements
of Operations (Unaudited)
|
|
13 weeks
ended
|
|
26 weeks
ended
|
(in millions, except
per share amounts)
|
|
July 30,
2022
|
|
July 31,
2021
|
|
July 30,
2022
|
|
July 31,
2021
|
Sales
|
|
$
1,754.9
|
|
$
1,788.1
|
|
$
3,593.2
|
|
$
3,476.9
|
Cost of
sales
|
|
(1,090.2)
|
|
(1,070.5)
|
|
(2,204.8)
|
|
(2,080.9)
|
Gross
margin
|
|
664.7
|
|
717.6
|
|
1,388.4
|
|
1,396.0
|
Selling, general and
administrative expenses
|
|
(477.3)
|
|
(502.6)
|
|
(1,010.4)
|
|
(1,014.6)
|
Other operating income
(expense)
|
|
(0.6)
|
|
10.4
|
|
(191.0)
|
|
12.7
|
Operating
income
|
|
186.8
|
|
225.4
|
|
187.0
|
|
394.1
|
Interest expense,
net
|
|
(3.4)
|
|
(4.4)
|
|
(7.8)
|
|
(8.3)
|
Other non-operating
income (expense)
|
|
(2.4)
|
|
0.1
|
|
(136.9)
|
|
0.2
|
Income before income
taxes
|
|
181.0
|
|
221.1
|
|
42.3
|
|
386.0
|
Income taxes
|
|
(35.6)
|
|
3.5
|
|
19.6
|
|
(23.0)
|
Net income
|
|
$
145.4
|
|
$
224.6
|
|
$
61.9
|
|
$
363.0
|
Dividends on redeemable
convertible preferred shares
|
|
(8.6)
|
|
(8.6)
|
|
(17.2)
|
|
(17.2)
|
Net income
attributable to common shareholders
|
|
$
136.8
|
|
$
216.0
|
|
$
44.7
|
|
$
345.8
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.95
|
|
$
4.10
|
|
$
0.94
|
|
$
6.60
|
Diluted
|
|
$
2.58
|
|
$
3.60
|
|
$
0.90
|
|
$
5.84
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
46.4
|
|
52.7
|
|
47.6
|
|
52.4
|
Diluted
|
|
56.3
|
|
62.4
|
|
49.7
|
|
62.2
|
|
|
|
|
|
|
|
|
|
Dividends declared per
common share
|
|
$
0.20
|
|
$
0.18
|
|
$
0.40
|
|
$
0.18
|
|
Condensed Consolidated Balance
Sheets (Unaudited)
(in millions, except
par value per share amount)
|
|
July 30,
2022
|
|
January 29,
2022
|
|
July 31,
2021
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
851.7
|
|
$ 1,418.3
|
|
$ 1,573.8
|
Accounts
receivable
|
|
35.6
|
|
19.9
|
|
13.9
|
Other current
assets
|
|
199.4
|
|
208.6
|
|
175.0
|
Income
taxes
|
|
118.5
|
|
23.2
|
|
54.9
|
Inventories
|
|
2,190.8
|
|
2,060.4
|
|
2,004.7
|
Total current
assets
|
|
3,396.0
|
|
3,730.4
|
|
3,822.3
|
Non-current
assets:
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
566.5
|
|
575.9
|
|
533.2
|
Operating lease
right-of-use assets
|
|
1,113.1
|
|
1,206.6
|
|
1,256.2
|
Goodwill
|
|
486.4
|
|
484.6
|
|
245.1
|
Intangible assets,
net
|
|
312.8
|
|
314.2
|
|
189.7
|
Other assets
|
|
254.7
|
|
226.1
|
|
244.1
|
Deferred tax
assets
|
|
34.9
|
|
37.3
|
|
21.3
|
Total assets
|
|
$
6,164.4
|
|
$ 6,575.1
|
|
$ 6,311.9
|
Liabilities,
Redeemable convertible preferred shares, and
Shareholders' equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Loans and
overdrafts
|
|
$
—
|
|
$
—
|
|
$
0.4
|
Accounts
payable
|
|
689.5
|
|
899.8
|
|
730.6
|
Accrued expenses and
other current liabilities
|
|
598.5
|
|
501.6
|
|
463.9
|
Deferred
revenue
|
|
326.9
|
|
341.3
|
|
297.9
|
Operating lease
liabilities
|
|
281.3
|
|
300.0
|
|
322.1
|
Income
taxes
|
|
23.9
|
|
28.0
|
|
25.6
|
Total current
liabilities
|
|
1,920.1
|
|
2,070.7
|
|
1,840.5
|
Non-current
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
147.2
|
|
147.1
|
|
146.9
|
Operating lease
liabilities
|
|
925.8
|
|
1,005.1
|
|
1,052.2
|
Other
liabilities
|
|
101.3
|
|
117.6
|
|
123.2
|
Deferred
revenue
|
|
873.9
|
|
857.6
|
|
809.4
|
Deferred tax
liabilities
|
|
175.2
|
|
160.9
|
|
132.9
|
Total
liabilities
|
|
4,143.5
|
|
4,359.0
|
|
4,105.1
|
Commitments and
contingencies
|
|
|
|
|
|
|
Series A redeemable
convertible preferred shares
|
|
653.0
|
|
652.1
|
|
651.3
|
Shareholders'
equity:
|
|
|
|
|
|
|
Common
shares
|
|
12.6
|
|
12.6
|
|
12.6
|
Additional paid-in
capital
|
|
245.6
|
|
231.2
|
|
266.8
|
Other
reserves
|
|
0.4
|
|
0.4
|
|
0.4
|
Treasury shares, at
cost
|
|
(1,494.4)
|
|
(1,206.7)
|
|
(951.0)
|
Retained
earnings
|
|
2,868.3
|
|
2,877.4
|
|
2,509.3
|
Accumulated other
comprehensive loss
|
|
(264.6)
|
|
(350.9)
|
|
(282.6)
|
Total shareholders'
equity
|
|
1,367.9
|
|
1,564.0
|
|
1,555.5
|
Total liabilities,
redeemable convertible preferred shares and shareholders'
equity
|
|
$
6,164.4
|
|
$ 6,575.1
|
|
$ 6,311.9
|
|
Condensed Consolidated Statements
of Cash Flows (Unaudited)
|
|
26 weeks
ended
|
(in
millions)
|
|
July 30,
2022
|
|
July 31,
2021
|
Cash flows from
operating activities
|
|
|
|
|
Net income
|
|
$
61.9
|
|
$
363.0
|
Adjustments to
reconcile net income to net cash (used in) provided by
operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
79.8
|
|
83.7
|
Amortization of
unfavorable contracts
|
|
(0.9)
|
|
(2.4)
|
Share-based
compensation
|
|
22.9
|
|
25.5
|
Deferred
taxation
|
|
(11.0)
|
|
(33.2)
|
Pension settlement
loss
|
|
132.8
|
|
—
|
Other non-cash
movements
|
|
3.1
|
|
0.4
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
|
(15.7)
|
|
18.5
|
Proceeds from sale of
in-house finance receivables
|
|
—
|
|
81.3
|
(Increase) decrease in
other assets and other receivables
|
|
(4.9)
|
|
29.7
|
(Increase) decrease in
inventories
|
|
(146.6)
|
|
33.9
|
Decrease in accounts
payable
|
|
(221.2)
|
|
(95.6)
|
Increase (decrease) in
accrued expenses and other liabilities
|
|
95.3
|
|
(29.6)
|
Change in operating
lease assets and liabilities
|
|
(3.6)
|
|
(44.7)
|
Increase in deferred
revenue
|
|
2.3
|
|
34.2
|
Change in income tax
receivable and payable
|
|
(99.9)
|
|
(3.8)
|
Pension plan
contributions
|
|
(9.2)
|
|
(2.4)
|
Net cash (used in)
provided by operating activities
|
|
(114.9)
|
|
458.5
|
Investing
activities
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(58.2)
|
|
(32.2)
|
Acquisitions, net of
cash acquired
|
|
(1.9)
|
|
(14.4)
|
Other investing
activities, net
|
|
(14.9)
|
|
1.9
|
Net cash used in
investing activities
|
|
(75.0)
|
|
(44.7)
|
Financing
activities
|
|
|
|
|
Dividends paid on
common shares
|
|
(18.3)
|
|
—
|
Dividends paid on
redeemable convertible preferred shares
|
|
(16.4)
|
|
(8.2)
|
Repurchase of common
shares
|
|
(291.0)
|
|
—
|
Payment of debt
issuance costs
|
|
—
|
|
(3.6)
|
Increase of bank
overdrafts
|
|
—
|
|
0.4
|
Other financing
activities
|
|
(41.4)
|
|
(4.5)
|
Net cash used in
financing activities
|
|
(367.1)
|
|
(15.9)
|
Cash and cash
equivalents at beginning of period
|
|
1,418.3
|
|
1,172.5
|
(Decrease) increase in
cash and cash equivalents
|
|
(557.0)
|
|
397.9
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(9.6)
|
|
3.4
|
Cash and cash
equivalents at end of period
|
|
$
851.7
|
|
$ 1,573.8
|
|
Real Estate Portfolio:
Signet has a diversified real estate portfolio. On July 30,
2022, Signet had 2,833 stores totaling 4.2 million square
feet of selling space. Compared to year-end Fiscal 2022, store
count decreased and square feet of selling space
increased 0.2%
Store count by
segment
|
January 29,
2022
|
|
Openings
|
|
Closures
|
|
July 30,
2022
|
North America
segment
|
2,506
|
|
23
|
|
(36)
|
|
2,493
|
International
segment
|
348
|
|
1
|
|
(9)
|
|
340
|
Signet
|
2,854
|
|
24
|
|
(45)
|
|
2,833
|
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SOURCE Signet Jewelers Ltd.