Signet Full Year Results as Expected Before Goodwill Impairment
25 Mar 2009
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Results for the 52 weeks ended January 31, 2009 ("fiscal 2009")
- Group same store sales: down 8.2%
- Group total sales: $3,344.3 million, down 5.7% at constant exchange rates(1)
- Income before goodwill impairment, relisting costs and income taxes: $200.9 million(2)
- Goodwill impairment charge: $516.9 million
- Reported loss before income taxes: $326.5 million
- Basic loss per share: $4.62
- Adjusted basic earnings per share: $1.57(2)
(1) See note 11 of full results.
(2) Before charging $516.9 million impairment of goodwill and $10.5 million of relisting costs. These financial measures are supplemental non-GAAP measures which management believe useful to understanding the Group's performance. See note 11 for a reconciliation to reported financial measures.
- Enhance position as strongest middle market specialty retail jeweler
- Reduce business risk
- Focus on profit & cash flow maximization to further strengthen balance sheet
Group Objectives for the 52 weeks ending January 30, 2010 ("fiscal 2010")
- $100 million US cost reduction program
- Significant working capital reduction
- Capital expenditure of about $55 million
- $175 million to $225 million cash inflow before financing activities
Terry Burman, Group Chief Executive, commented: "Against a very challenging retail environment, we capitalized on the Group's competitive strengths to outperform our middle market competitors and to successfully execute our strategy of maximizing gross merchandise margin dollars.
As sector rationalization continues at an accelerated pace, proven management, a strong balance sheet and sustainable competitive advantages are important considerations in relationships with staff, suppliers and landlords. As we enter fiscal 2010, our prime objective is to strengthen further the Group's industry leading position so as to be able to benefit from the reduced capacity within the specialty jewelry sector and to be well positioned for the eventual consumer recovery. To reinforce our position, we also aim to reduce net debt by around $200 million in fiscal 2010.
Given the very challenging environment, the Group has made an encouraging start to fiscal 2010. In the US, same store sales for the first seven weeks were down by 2.7% against the comparable period in fiscal 2009, with Valentine's Day trading stronger than the remainder of the period. The change in timing of Easter had an adverse impact of about 1%. Gross merchandise margin was meaningfully up, reflecting the benefit of the price increases implemented in the first quarter of fiscal 2009 and favorable mix changes, which more than offset the increase in the cost of gold.
In the UK, same store sales for the first seven weeks were down 3.8%, with the timing of Easter having limited impact. Gross merchandise margin was up slightly, reflecting higher prices offsetting increased merchandise costs. However, pressure on UK gross merchandise margin is expected to build during the rest of the year due to higher gold costs and the weakness of the pound sterling against the US dollar."
|Enquiries:||Terry Burman, Group Chief Executive||+1 441 296 5872|
|Walker Boyd, Group Finance Director||+1 441 296 5872|
|Michael Henson, Taylor Rafferty||+1 212 889 4350|
|Jonathan Glass, Brunswick||+44 (0) 20 7404 5959|
Signet operated 1,959 specialty retail jewelry stores at January 31, 2009; these included 1,401 stores in the US, where the Group trades as "Kay Jewelers", "Jared The Galleria Of Jewelry", and under a number of regional names. At that date Signet operated 558 stores in the UK, where the Group trades as "H.Samuel", "Ernest Jones", and "Leslie Davis". Further information on Signet is available at www.signetjewelers.com. See also www.kay.com, www.jared.com, www.hsamuel.co.uk and www.ernestjones.co.uk.
Results conference call details
There will be a conference call today at 9.00 a.m. EDT (1.00 p.m. GMT and 6.00 a.m. Pacific Time) and a simultaneous audio webcast and slide presentation are available. The slides are available to be downloaded from the website ahead of the conference call. To help ensure the conference call begins in a timely manner, could all participants please dial in 5 to 10 minutes prior to the scheduled start time. The call details are:
|US dial-in:||+1 718 354 1171|
|US 48hr. replay:||+1 718 354 1112||Pass code: 4086123#|
|European dial-in:||+44 (0) 20 7138 0816|
|European 48hr. replay:||+44 (0) 20 7806 1970||Pass code: 4086123#|