HAMILTON, Bermuda--(BUSINESS WIRE)--
Signet Jewelers Limited (“Signet”) (NYSE:SIG), the world's largest
retailer of diamond jewelry, today announced its sales for the 9 weeks
ended December 30, 2017 (“Holiday Season”).
Holiday Season Summary:
-
Same store sales ("SSS") decreased 5.3%; total sales decreased 3.1%
-
Implementation of strategic priorities drove double-digit eCommerce
growth overall and SSS increase of 4.0% at Zale division
-
Fiscal 2018 EPS guidance updated to reflect current year benefits of
U.S. tax reform
Virginia C. Drosos, Chief Executive Officer of Signet Jewelers, said:
“During the Holiday Season, we made positive progress on our strategic
priorities, offset primarily by the negative impact of the credit
outsourcing transition, as evident by the mixed performance across our
banners and channels. Our overall eCommerce business grew double-digits,
and our Zale division, where our strategic initiatives are beginning to
take hold unencumbered by the credit transition, delivered same store
sales growth with strength in both bridal and fashion. Conversely,
progress in our Sterling division was overshadowed by the negative
impact of the credit outsourcing transition in stores.
“Our strategic initiatives to bring innovation to both our bridal and
fashion assortments and lead key market trends, supported by targeted
marketing and promotional strategies, helped drive sales in Zale.
Additionally, our efforts to enhance our digital presence and
OmniChannel capabilities drove strong customer engagement and marketing
efficiencies. We are resolutely focused on addressing credit transition
issues in our Sterling division to return to growth there as well.
“I thank our Team Members for their commitment to providing exceptional
service to our customers, and for their hard work to improve the
execution of our strategic priorities. We remain committed to building a
more profitable, competitive, and efficient Signet.”
Financial Guidance Fiscal Year 2018:
Signet reiterated its Fiscal 2018 SSS outlook and updated its Fiscal
2018 EPS guidance to reflect the positive impact of the Tax Cuts and
Jobs Act in the United States. Signet anticipates the reduction in the
U.S. corporate income tax rate to result in an effective tax rate in the
range of 14% to 15% for its current fiscal year. Excluding the estimated
benefit of U.S. tax reform, the company expects Fiscal 2018 EPS within
its previous guidance range.
|
|
|
|
|
Prior Guidance
|
|
|
|
Updated Guidance
(Excluding U.S. Tax
Reform)
|
|
|
|
Updated Guidance
(Including U.S. Tax
Reform)²
|
|
SSS
|
|
|
|
Down mid single-digit %
|
|
|
|
Down mid single-digit %
|
|
|
|
Down mid single-digit %
|
|
EPS¹
|
|
|
|
$6.10 - $6.50
|
|
|
|
$6.17 - $6.22
|
|
|
|
$6.45 - $6.50
|
|
Effective tax rate
|
|
|
|
22%
|
|
|
|
18%
|
|
|
|
14% - 15%
|
|
Weighted average common shares
|
|
|
|
69 million - 70 million
|
|
|
|
69 million - 70 million
|
|
|
|
69 million - 70 million
|
|
Capital expenditures in $
|
|
|
|
245 million - 260 million
|
|
|
|
230 million - 240 million
|
|
|
|
230 million - 240 million
|
|
Net selling square footage growth
|
|
|
|
-1.5% to -1.0%
|
|
|
|
Approx. -1.5%
|
|
|
|
Approx. -1.5%
|
|
(1) Includes net impact of outsourcing the credit portfolio and
related transaction costs, net impact of R2Net acquisition,
separation costs, and share repurchases associated with the credit
transaction proceeds.
|
|
(2) Excludes the impact of tax reform in the United States related
to revaluation of net deferred tax liabilities estimated to have a
favorable impact of $0.50 to $0.67 on EPS.
|
The recent passage of U.S. tax reform will also require Signet to
re-measure net deferred tax balances in Fiscal 2018. The company
currently estimates the deferred tax impact of U.S. tax reform to result
in a one-time non-cash benefit currently estimated in the range of $35
million to $45 million that will be recorded in the fourth quarter of
Fiscal 2018. This is estimated to add between $0.50 and $0.67 to EPS in
the fourth quarter and for the full year 2018. This one-time tax benefit
is not included in guidance and is not included in the table above.
Signet expects the favorable impact of U.S. tax reform to moderate in
future years as the savings from a lower corporate income tax rate in
the U.S. will be largely offset by disallowances and limitations in
certain tax deductions.
Holiday Season Fiscal 2018 Sales Highlights:
Signet's total sales were $1,881.7 million, down $59.2 million or 3.1%,
compared to $1,940.9 million in prior year. SSS decreased 5.3%. Sales
declines were primarily driven by weakness in the Sterling division,
impacted predominantly by the credit outsourcing transition which
accounted for approximately two-thirds of the decrease.
Signet’s eCommerce sales were $210.5 million, up $68.0 million or 47.7%,
compared to $142.5 million in prior year. eCommerce sales growth was led
by the Sterling division, reflecting the R2Net acquisition and the
successful implementation of several enhancements to its OmniChannel
platforms, search efficacy, functionality, and digital and social media
marketing. Investments in search engine optimization led to a 48%
increase in page-1 keyword search results and drove a nearly 20%
increase in traffic to Sterling banners. R2Net eCommerce sales were
$50.6 million, up 38.6%.
By category:
-
Bridal performance in Zale division was positive driven by innovation
and newness in assortment, including Enchanted Disney, Vera Wang Love,
solitaires and fancy cut diamonds, supported by targeted marketing and
promotional strategies. This was offset by softness in Sterling
division, particularly Kay bridal sales in stores, primarily due to
the credit transition.
-
Fashion category delivered sales growth in Zale division, reflecting
strengthened product assortment in key price points and leading trends
such as stacking and layering and yellow gold. New styles, combined
with targeted digital and social media marketing initiatives, helped
deliver the solid performance in fashion.
By operating segment:
-
Sterling Jewelers division results were considerably impacted by the
credit outsourcing transition, most notably in sales of bridal
merchandise. The transition particularly affected sales at Kay, where
customers tend to more frequently utilize credit in store, especially
for bridal purchases, as compared to Jared. Pockets of strength in
Sterling included double-digit eCommerce sales growth and the success
of the Chosen collection at Jared, as well as new merchandise sales in
fashion. In addition to credit, lower sales of Ever Us and less
effective promotional events impacted Sterling division performance.
-
Execution of Signet’s strategic initiatives drove solid growth in Zale
division, including at Zales, Piercing Pagoda and Peoples. The new
Enchanted Disney collection and line extensions in Vera Wang Love, in
addition to an improved selection of solitaires and fancy cut diamonds
delivered strong performance at Zales. Chains and gold jewelry drove
improvement in Piercing Pagoda. Increased digital marketing helped
drive successful promotions, providing an immersive OmniChannel
experience across TV, online, and in-store.
-
UK Jewelry division sales declined due principally to bridal and
diamond fashion jewelry, partially offset by higher sales in select
prestige watch brands and strength in eCommerce.
|
Sales change from previous year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-same
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same
|
|
|
|
store
|
|
|
|
Total sales
|
|
|
|
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
store
|
|
|
|
sales,
|
|
|
|
at constant
|
|
|
|
translation
|
|
|
|
Total
|
|
|
|
|
Total sales
|
|
Holiday Season Fiscal 2018
|
|
|
|
sales(1)
|
|
|
|
net(2)
|
|
|
|
exchange rate
|
|
|
|
impact
|
|
|
|
sales
|
|
|
|
|
(in mill. $)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kay
|
|
|
|
(10.8
|
)%
|
|
|
|
2.0
|
%
|
|
|
|
(8.8
|
)%
|
|
|
|
—
|
%
|
|
|
(8.8
|
)%
|
|
|
|
723.1
|
|
Jared
|
|
|
|
(5.9
|
)%
|
|
|
|
0.9
|
%
|
|
|
|
(5.0
|
)%
|
|
|
|
—
|
%
|
|
|
(5.0
|
)%
|
|
|
|
345.6
|
|
R2Net
|
|
|
|
38.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50.6
|
|
Regional brands
|
|
|
|
(29.1
|
)%
|
|
|
|
(10.5
|
)%
|
|
|
|
(39.6
|
)%
|
|
|
|
—
|
%
|
|
|
(39.6
|
)%
|
|
|
|
27.1
|
|
Sterling Jewelers division
|
|
|
|
(8.5
|
)%
|
|
|
|
4.0
|
%
|
|
|
|
(4.5
|
)%
|
|
|
|
—
|
%
|
|
|
(4.5
|
)%
|
|
|
|
1,146.4
|
|
Zales Jewelers
|
|
|
|
4.6
|
%
|
|
|
|
(2.4
|
)%
|
|
|
|
2.2
|
%
|
|
|
|
—
|
%
|
|
|
2.2
|
%
|
|
|
|
401.5
|
|
Gordon’s Jewelers
|
|
|
|
(12.6
|
)%
|
|
|
|
(22.9
|
)%
|
|
|
|
(35.5
|
)%
|
|
|
|
—
|
%
|
|
|
(35.5
|
)%
|
|
|
|
10.7
|
|
Total Zale US Jewelry
|
|
|
|
4.2
|
%
|
|
|
|
(3.5
|
)%
|
|
|
|
0.7
|
%
|
|
|
|
—
|
%
|
|
|
0.7
|
%
|
|
|
|
412.2
|
|
Peoples Jewellers
|
|
|
|
3.8
|
%
|
|
|
|
(2.9
|
)%
|
|
|
|
0.9
|
%
|
|
|
|
4.9
|
%
|
|
|
5.8
|
%
|
|
|
|
66.0
|
|
Mappins
|
|
|
|
(14.5
|
)%
|
|
|
|
(32.3
|
)%
|
|
|
|
(46.8
|
)%
|
|
|
|
2.4
|
%
|
|
|
(44.4
|
)%
|
|
|
|
5.0
|
|
Total Zale Canada Jewelry
|
|
|
|
2.4
|
%
|
|
|
|
(7.5
|
)%
|
|
|
|
(5.1
|
)%
|
|
|
|
4.5
|
%
|
|
|
(0.6
|
)%
|
|
|
|
71.0
|
|
Total Zale Jewelry
|
|
|
|
3.9
|
%
|
|
|
|
(4.1
|
)%
|
|
|
|
(0.2
|
)%
|
|
|
|
0.7
|
%
|
|
|
0.5
|
%
|
|
|
|
483.2
|
|
Piercing Pagoda
|
|
|
|
4.9
|
%
|
|
|
|
0.0
|
%
|
|
|
|
4.9
|
%
|
|
|
|
—
|
%
|
|
|
4.9
|
%
|
|
|
|
73.0
|
|
Zale division
|
|
|
|
4.0
|
%
|
|
|
|
(3.6
|
)%
|
|
|
|
0.4
|
%
|
|
|
|
0.7
|
%
|
|
|
|
1.1
|
%
|
|
|
|
556.2
|
|
H.Samuel
|
|
|
|
(10.2
|
)%
|
|
|
|
0.0
|
%
|
|
|
|
(10.2
|
)%
|
|
|
|
6.3
|
%
|
|
|
|
(3.9
|
)%
|
|
|
|
95.3
|
|
Ernest Jones
|
|
|
|
(10.5
|
)%
|
|
|
|
0.3
|
%
|
|
|
|
(10.2
|
)%
|
|
|
|
6.3
|
%
|
|
|
|
(3.9
|
)%
|
|
|
|
81.8
|
|
UK Jewelry division
|
|
|
|
(10.3
|
)%
|
|
|
|
0.1
|
%
|
|
|
|
(10.2
|
)%
|
|
|
|
6.3
|
%
|
|
|
|
(3.9
|
)%
|
|
|
|
177.1
|
|
Other segment
|
|
|
|
—
|
%
|
|
|
|
(61.5
|
)%
|
|
|
(61.5
|
)%
|
|
|
|
—
|
%
|
|
|
|
(61.5
|
)%
|
|
|
|
2.0
|
|
Signet
|
|
|
|
(5.3
|
)%
|
|
|
|
1.4
|
%
|
|
|
|
(3.9
|
)%
|
|
|
|
0.8
|
%
|
|
|
|
(3.1
|
)%
|
|
|
|
1,881.7
|
|
Notes: 1=For stores open for at least 12 months. 2=For stores not
open in the last 12 months.
|
Quarterly Dividend:
Signet’s board declared a quarterly cash dividend of $0.31 per share for
the fourth quarter of Fiscal 2018, payable on March 3, 2018 to
shareholders of record on February 2, 2018, with an ex-dividend date of
February 1, 2018.
Conference Call:
A conference call is scheduled today at 8:30 a.m. ET and a simultaneous
audio webcast and slide presentation are available at www.signetjewelers.com.
The slides are available to be downloaded from the website. The call
details are:
Dial-in: 1-647-689-4229 Access code: 7291678
A replay and transcript of the call will be posted on Signet's website
as soon as they are available and will be accessible for one year.
About Signet and Safe Harbor Statement:
Signet Jewelers Limited is the world's largest retailer of diamond
jewelry. Signet operates approximately 3,600 stores primarily under the
name brands of Kay Jewelers, Zales, Jared The Galleria Of Jewelry,
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.
Signet will continue to analyze the full effects of the U.S. tax reform
on its financial statements and operations, and will provide you more
detail on our fourth quarter earnings call. The impact of the U.S. tax
reform may differ from this estimate, possibly materially, due to, among
other things, changes in interpretations and assumptions Signet has
made, guidance that may be issued and actions Signet may take as a
result of the U.S. tax reform.
This release contains statements which are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements, based upon management’s beliefs and expectations
as well as on assumptions made by and data currently available to
management, appear in a number of places throughout this document and
include statements regarding, among other things, Signet’s results of
operation, financial condition, liquidity, prospects, growth, strategies
and the industry in which Signet operates. The use of the words
“expects,” “intends,” “anticipates,” “estimates,” “predicts,”
“believes,” “should,” “potential,” “may,” “forecast,” “objective,”
“plan,” or “target,” and other similar expressions are intended to
identify forward-looking statements. These forward-looking statements
are not guarantees of future performance and are subject to a number of
risks and uncertainties, including but not limited to, the effect of
federal tax reform and adjustments relating to such impact on the
completion of our fourth quarter and year-end financial statements,
changes in interpretation or assumptions, and/or updated regulatory
guidance regarding the U.S. tax reform, the benefits and outsourcing of
the credit portfolio sale including I/T disruptions, future financial
results and operating results, the timing and expected completion of the
second phase of the credit outsourcing, the impact of weather-related
incidents on Signet’s business, the benefits and integration of R2Net,
general economic conditions, regulatory changes following the United
Kingdom’s announcement to exit from the European Union, a decline in
consumer spending, the merchandising, pricing and inventory policies
followed by Signet, the reputation of Signet and its brands, the level
of competition in the jewelry sector, the cost and availability of
diamonds, gold and other precious metals, regulations relating to
customer credit, seasonality of Signet’s business, financial market
risks, deterioration in customers’ financial condition, exchange rate
fluctuations, changes in Signet’s credit rating, changes in consumer
attitudes regarding jewelry, management of social, ethical and
environmental risks, the development and maintenance of Signet’s
omni-channel retailing, security breaches and other disruptions to
Signet’s information technology infrastructure and databases, inadequacy
in and disruptions to internal controls and systems, changes in
assumptions used in making accounting estimates relating to items such
as extended service plans and pensions, risks related to Signet being a
Bermuda corporation, the impact of the acquisition of Zale Corporation
on relationships, including with employees, suppliers, customers and
competitors, and our ability to successfully integrate Zale
Corporation’s operations and to realize synergies from the transaction.
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" section of Signet's
Fiscal 2017 Annual Report on Form 10-K filed with the SEC on March 16,
2017 and quarterly reports on Form 10-Q 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180110005390/en/
Source: Signet Jewelers Limited