HAMILTON, Bermuda--(BUSINESS WIRE)--
Signet Jewelers Limited (“Signet”) (NYSE:SIG), the world's largest
retailer of diamond jewelry, today announced its results for the 13
weeks ended October 28, 2017 (“third quarter Fiscal 2018”).
Summary:
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Same store sales ("SSS") down 5.0%, including an estimated 120 basis
point negative impact due to weather-related incidents and systems and
process disruptions associated with outsourcing of the credit
portfolio.
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Loss per share of $0.20, including ($0.25) per share in net
transaction costs related to the first phase of strategic credit
outsourcing and the R2Net acquisition, and ($0.10) due to
weather-related incidents and credit outsourcing disruptions.
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Substantial progress on strategic initiatives, with double-digit
eCommerce sales growth, improved fashion category performance in
updated collections at key price points, enhanced digital marketing
and streamlined promotions.
-
Revised Fiscal 2018 guidance to reflect the impact of credit
outsourcing disruptions.
Virginia C. Drosos, Chief Executive Officer of Signet Jewelers, said:
"Signet had a challenging third quarter. In addition to an anticipated
sequential slowdown in our same store sales, unfavorable weather-related
incidents, along with unexpected disruptions during the transition of
our credit services, further negatively impacted results. Encouragingly,
within this backdrop, we advanced our strategic priorities, which are
beginning to deliver results.
"We are seeing positive customer reaction to enhancements in our
OmniChannel experience, as well as streamlined marketing messages and
improved fashion assortment. We have also implemented several synergies
from the R2Net acquisition ahead of plan. Unfortunately, these wins are
being overshadowed by the systems disruptions and significant process
changes associated with the outsourcing of our credit portfolio, with
particular impact at Kay. While the identified systems issues are behind
us, we expect some credit process disruption to continue and to
negatively impact our fourth quarter and full-year performance. As a
result, we now expect our fourth quarter same store sales to be down
low- to mid-single digits, leading to Fiscal 2018 same store sales down
mid-single digits and earnings ranging from $6.10 to $6.50 per share.
"We remain focused on executing our three strategic priorities: Customer
First, OmniChannel, and Culture of Agility and Efficiency. While it’s
still early, we are aggressively transforming our business and believe
we are on the right track to create a more competitive and innovative
Signet that is poised for sustainable, profitable growth. I thank our
Team Members for their dedication and hard work."
Progress on Strategic Priorities
In the third quarter, Signet continued to advance its three strategic
priorities:
-
Customer First
-
Streamlined promotional strategies and effectively targeted
customers in a continued promotional environment.
-
Expanded fashion category assortment aligned with successful
trends and at key price points, including the launch of Interwoven
brand.
-
Increased marketing reach and effectiveness with digital and
social media impressions more than doubling year-to-date to reach
1 billion impressions in Q3.
-
Launched a data management platform to better identify customer
profiles and deliver personalized content on Signet’s websites.
-
OmniChannel
-
Delivered total eCommerce growth of 56.4% driven by the
newly-acquired R2Net, as well as strong digital marketing tactics
and recent enhancements to Sterling division websites which drove
double-digit percentage growth.
-
Re-launched Zale eCommerce site with new hybris platform.
-
Began implementing R2Net’s diamond imagery and content technology
in Jared stores, 24/7 customer service on Jared.com Design-A-Ring,
and Ring Try-on App for Kay.
-
Culture of Agility and Efficiency
-
Disciplined cost reductions drove an improvement in selling,
general and administrative expenses ("SGA") rate.
-
Lowered inventory levels by 6.9% as a result of strong working
capital management.
-
Reduced store tasks to release nearly 80,000 hours per month to be
dedicated to customer service.
-
Consolidation of distribution centers near completion.
Financial Guidance Fiscal Year 2018:
On October 23, 2017, Signet completed the first phase of strategic
outsourcing of its credit portfolio to Alliance Data Systems (“Alliance
Data”) and Genesis Financial Solutions (“Genesis”). As part of the first
phase, Alliance Data acquired the prime credit quality portion of
Signet’s existing credit portfolio and became the primary provider of
credit to Signet’s customers, while the credit servicing functions of
the non-prime book has been outsourced to Genesis.
Signet is experiencing greater than anticipated disruptions related to
the complex credit transition process. Signet and its credit partners
are working with great urgency to resolve these issues, and while the
critical majority of the systems-related issues have been identified and
restored, the Company expects the financial impact to carry forward into
the fourth quarter given the significant changes to the credit-related
processes.
As a result, Signet now expects Fiscal 2018 SSS to be down a mid
single-digit percentage and EPS to be in the range of $6.10 and $6.50.
The Company is in advanced discussions with interested funding partners
related to the second phase of its credit outsourcing, which is expected
to be completed in the first half of calendar year 2018.
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Prior Guidance
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Current Guidance
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SSS
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Down low to mid single-digit %
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Down mid single-digit %
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EPS¹
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$7.16 - $7.56
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$6.10 - $6.50
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Effective tax rate
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24%
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22%
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Weighted average common shares
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69 million - 70 million
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69 million - 70 million
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Capital expenditures in $
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260 million - 275 million
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245 million - 260 million
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Net selling square footage growth
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-1.0% to 0%
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-1.5% to -1.0%
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(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.
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The following are additional considerations to assist financial modeling:
-
Capital expenditures will be driven primarily by new Kay off-mall
store openings, as well as store remodels and information technology
("I/T") to support key business strategies. For Fiscal 2018, Signet
expects net store closures of approximately 125 stores, consisting of
roughly 90 to 100 store openings and about 215 to 225 closures. Store
closures are primarily focused on mall-based regional brands not
meeting Signet's financial return targets. Store openings will be
primarily Kay off-mall locations.
-
The capital expenditure mix in Fiscal 2018 will skew toward I/T
investments to support Signet's OmniChannel initiatives. As I/T
investments depreciate faster than store assets, this will have a
small unfavorable impact as depreciation accelerates near and medium
term.
-
Fiscal 2018 is a 53-week fiscal year for Signet, ending February 3,
2018, driven by the retail industry calendar. As previously
communicated, the additional week, January 28, 2018 - February 3,
2018, will have no impact to SSS as it is excluded from the
calculation and no meaningful impact to operating profit.
Third Quarter Fiscal 2018 Financial Highlights:
Signet's total sales were $1,156.9 million, down $29.3 million or 2.5%,
compared to a decrease also of 2.5% in the 13 weeks ended October 29,
2016 ("third quarter Fiscal 2017"). SSS decreased 5.0%, which includes a
positive 40 basis point contribution from R2Net, compared to a decrease
of 2.0% in the third quarter Fiscal 2017. Third quarter SSS were
negatively impacted due to weather-related incidents by an estimated 60
basis points and disruptions related to the credit outsourcing
transition by an estimated 60 basis points.
Sales declines were primarily driven by soft bridal sales and a lower
number of customer transactions. These were offset in part by the
strength in eCommerce, with sales of $80.7 million, a 56.4% increase,
including the impact of R2Net. Excluding R2Net, eCommerce sales grew
10.5%, driven by 34% growth at Sterling, partially offset by a decline
in Zale eCommerce sales which was impacted by the conversion to the
hybris platform during the quarter.
By operating segment:
-
Sterling Jewelers' SSS decreased 6.2%, including 60 basis points of
favorable impact from R2Net sales. Average transaction value ("ATV")
increased 1.6% and the number of transactions declined 7.6%. The SSS
decline was driven by a decrease in bridal sales, which were
disproportionately affected by systems and process disruptions
associated with the outsourcing of credit services. This was partially
offset by higher sales of select fashion jewelry collections at Kay
and Jared.
-
Zale Jewelry's SSS decreased 3.4%. ATV increased 2.5%, and the number
of transactions decreased 6.9%. The SSS declines were generally across
categories, while bridal and new fashion collections ended the quarter
on a strong trajectory. eCommerce sales were negatively impacted by
the planned conversion of Zale eCommerce platforms to hybris
technology, which is beginning to drive improvements in website
functionality and performance.
-
Piercing Pagoda's SSS increased 2.1%. ATV increased 9.1%, while the
number of transactions decreased 6.6%. This SSS increase was driven
primarily by higher sales of fashion gold jewelry.
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UK Jewelry's SSS decreased 5.1%. ATV increased 8.3% and the number of
transactions decreased 12.9%. The SSS decline was driven principally
by non-branded jewelry offset in part by higher sales in select watch
brands.
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Sales change from previous year
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Third quarter Fiscal 2018
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Same store sales1
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Non-same store sales, net2
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Total sales at constant exchange rate
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Exchange translation impact
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Total sales
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Total sales (in mill. $)
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Kay
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(7.2
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)%
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2.8
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%
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(4.4
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)%
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—
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%
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(4.4
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)%
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436.3
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Jared
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(5.1
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)%
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1.3
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%
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(3.8
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)%
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|
—
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%
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(3.8
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)%
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218.0
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R2Net3
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17.9
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%
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23.7
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Regional brands
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(16.3
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)%
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(13.3
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)%
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(29.6
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)%
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—
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%
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(29.6
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)%
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20.7
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Sterling Jewelers division
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(6.2
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)%
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4.3
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%
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(1.9
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)%
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—
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%
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(1.9
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)%
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698.7
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Zales Jewelers
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(3.3
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)%
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(1.0
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)%
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(4.3
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)%
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—
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%
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(4.3
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)%
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|
215.7
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Gordon’s Jewelers
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(15.8
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)%
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(18.9
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)%
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(34.7
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)%
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—
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%
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(34.7
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)%
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6.4
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Zale US Jewelry
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(3.7
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)%
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(1.8
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)%
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(5.5
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)%
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—
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%
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(5.5
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)%
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|
222.1
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Peoples Jewellers
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(0.5
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)%
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(1.1
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)%
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(1.6
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)%
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4.3
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%
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2.7
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%
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42.3
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Mappins
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(15.9
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)%
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(24.7
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)%
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(40.6
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)%
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2.9
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%
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(37.7
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)%
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3.8
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Zale Canada Jewelry
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(1.9
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)%
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(4.8
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)%
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(6.7
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)%
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4.2
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%
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(2.5
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)%
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46.1
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Zale Jewelry
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(3.4
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)%
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(2.3
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)%
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(5.7
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)%
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0.7
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%
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(5.0
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)%
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268.2
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Piercing Pagoda
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2.1
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%
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1.6
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%
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3.7
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%
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—
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%
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3.7
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%
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55.4
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Zale division
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(2.5
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)%
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(1.7
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)%
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(4.2
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)%
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0.6
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%
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(3.6
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)%
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|
323.6
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H.Samuel
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(4.6
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)%
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0.8
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%
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(3.8
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)%
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|
1.9
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%
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(1.9
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)%
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|
61.6
|
Ernest Jones
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(5.6
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)%
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2.7
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%
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|
(2.9
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)%
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|
1.9
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%
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(1.0
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)%
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|
66.8
|
UK Jewelry division
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|
|
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(5.1
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)%
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1.8
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%
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(3.3
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)%
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|
1.8
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%
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(1.5
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)%
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|
128.4
|
Other segment
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|
|
|
|
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|
|
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|
|
|
6.2
|
Signet
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|
|
|
(5.0
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)%
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|
2.2
|
%
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|
(2.8
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)%
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0.3
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%
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(2.5
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)%
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|
1,156.9
|
Notes: 1=For stores open for at least 12 months. 2=For stores not
open in the last 12 months. 3=Includes 47 days of R2Net sales as if
R2Net had been part of Signet in the same period prior year.
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Gross margin was $321.1 million or 27.8% of sales, down 170 basis points
compared to prior year, including de-leverage of 30 bps of R2Net which
carries a lower gross margin rate. The remaining decline in rate was
driven by lower sales on fixed costs (e.g. store occupancy) and a lower
gross merchandise margin rate, impacted by the inclusion of R2Net.
Excluding the mix effect of R2Net, gross merchandise margin increased
driven by streamlined marketing initiatives and effective customer
targeting, despite more promotional activity. By division:
-
Sterling Jewelers gross margin decreased $20.2 million. The gross
margin rate decreased 230 basis points, of which 60 basis points is
attributed to inclusion of R2Net. The remainder of the rate decline is
primarily due to de-leverage of fixed costs, and higher disposition of
inventory in part due to distribution center consolidation, offset in
part by store banner merchandise margin improvement and less bad debt
expense.
-
Zale gross margin decreased $5.6 million. The gross margin rate
decreased 60 basis points due primarily to de-leverage of fixed costs,
higher disposition of inventory in part due to distribution center
consolidation and promotions, partially offset by an improvement in
merchandise margin.
-
UK Jewelry gross margin decreased $3.2 million. The gross margin rate
decreased 210 basis points driven principally by greater promotional
activity and de-leverage of fixed costs.
SGA declined 2.7% to $375.9 million or 32.5% of sales, including $8.1
million of transaction costs related to R2Net, compared to $386.5
million or 32.6% of sales in the prior year. SGA rate improved 10 basis
points, or, 80 basis points excluding R2Net transaction costs. R2Net
transaction costs were offset by disciplined cost reductions in store
and corporate payroll, other payroll related benefits, including a $4
million pension curtailment, and a continued shift of marketing spend to
higher-return investments in digital.
In the third quarter, Signet recognized a $12.2 million net credit
transaction expense related to the sale of the prime accounts
receivables. This included $22.4 million of legal, advisory,
implementation, and retention expenses, partially offset by a $10.2
million beneficial interest gain related to expected profit sharing.
Other operating income was $72.5 million compared to $68.6 million in
the prior year third quarter, up $3.9 million or 5.7%. This increase was
due to the Sterling division’s higher interest income earned from higher
outstanding receivable balances.
Signet's operating income was $5.5 million or 0.5% of sales, including
$20.3 million of net transaction cost related to the outsourcing of
credit portfolio and the acquisition of R2Net, compared to $32.1 million
or 2.7% of sales in prior year third quarter. Operating margin decline
of 220 basis points was primarily driven by 170 basis points related to
transaction costs.
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|
|
|
|
|
|
|
|
|
|
|
Third quarter Fiscal 2018
|
|
Third quarter Fiscal 2017
|
Income/(loss) in millions
|
|
|
|
$
|
|
% of sales
|
|
$
|
|
% of sales
|
Sterling Jewelers division (includes R2Net)
|
|
|
|
$
|
73.7
|
|
|
10.5
|
%
|
|
$
|
78.6
|
|
|
11.0
|
%
|
Zale division
|
|
|
|
(19.9
|
)
|
|
(6.1
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)%
|
|
(24.7
|
)
|
|
(7.4
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)%
|
UK Jewelry division
|
|
|
|
(1.7
|
)
|
|
(1.3
|
)%
|
|
—
|
|
|
—
|
%
|
Other
|
|
|
|
(46.6
|
)
|
|
nm
|
|
|
(21.8
|
)
|
|
nm
|
|
Total
|
|
|
|
5.5
|
|
|
0.5
|
%
|
|
32.1
|
|
|
2.7
|
%
|
Note:
|
|
Sterling Jewelers includes the beneficial interest gain of $10.2
million and Other includes $22.4 million of credit related
transaction costs. The acquisition costs-only of R2Net are in Other.
|
nm:
|
|
Not meaningful.
|
|
|
|
Income tax benefit was $7.2 million compared to a $2.4 million expense
in the prior year third quarter. The income tax benefit for the quarter
represents the adjustment required to provide for taxes at the expected
annual effective tax rate.
Third quarter loss per share was $0.20 versus earnings per share of
$0.20 in the third quarter of 2017. This included the following
unfavorable factors (per share):
-
Net credit transaction costs ($0.14)
-
R2Net acquisition costs ($0.11)
-
Disruptions related to weather and credit outsourcing ($0.10)
Balance Sheet and Statement of Cash Flows:
Cash and cash equivalents were $113.4 million compared to $82.7 million
at the prior year quarter-end. The sale of the prime portion of accounts
receivable and favorable changes to inventory were partially offset by
share repurchases, the acquisition of R2Net, and lower net income.
At the end of the third quarter, net accounts receivable were $640.1
million compared to $1,581.1 million at the prior year quarter-end. The
decrease in receivables is primarily driven by the sale of the prime
portfolio in the third quarter of $960 million. Third quarter Sterling
Jewelers credit participation rate was 59.6% compared to 66.8% in the
third quarter of last year. The decline in penetration rate was driven
by a combination of a continued trend in lower credit applications and
therefore resulting in a lower number of approved credit applicants as
well as disruption related to the credit transition. Finance charge
income in the third quarter was $70.3 million and net bad debt expense
was $51.5 million -- a net favorable difference of $18.8 million. This
compares to a difference of $9.8 million in the prior year. This
favorable year-on-year relationship was driven primarily by lower bad
debt expense due to the decrease in portfolio assets.
Net inventories were $2,466.1 million, down 6.9% compared to $2,649.4
million at the prior year quarter-end. This was driven primarily by a
focus on working capital across the business.
Long term debt was $696.8 million compared to $1,324.2 million in the
prior year period. The $627.4 million decline was driven principally by
repayment of the $600.0 million asset backed securitization associated
with the sale of Signet's prime accounts receivable portfolio.
Signet’s capital allocation is essentially unchanged in light of the
resolution of the Company’s credit strategic review. Signet remains
committed to maintaining an investment grade profile with a strong
balance sheet and financial flexibility to fund its business and growth
strategy. The proceeds from the transaction were used to redeem the
securitization facility and repay the short-term loan associated with
the R2Net acquisition. Signet does not expect material additional share
repurchases in Fiscal 2018. The Company is targeting to maintain an
adjusted leverage ratio between 3.0x to 3.5x.
On October 28, 2017 Signet had 3,639 stores totaling 5.1 million square
feet of selling space. Since year-end, store count decreased by 43 and
square feet of selling space increased 0.2%. The majority of new store
openings were in off-mall locations which tend to be bigger than mall
locations where most closures occurred with a focus on regional store
banners.
|
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|
|
|
|
|
|
|
|
|
Store count
|
|
|
|
Jan 28, 2017
|
|
Openings
|
|
Closures
|
|
Oct 28, 2017
|
Kay
|
|
|
|
1,192
|
|
53
|
|
(8
|
)
|
|
1,237
|
Jared
|
|
|
|
275
|
|
2
|
|
(1
|
)
|
|
276
|
Regional brands
|
|
|
|
121
|
|
—
|
|
(21
|
)
|
|
100
|
Sterling Jewelers division
|
|
|
|
1,588
|
|
55
|
|
(30
|
)
|
|
1,613
|
Zales
|
|
|
|
751
|
|
11
|
|
(39
|
)
|
|
723
|
Peoples
|
|
|
|
143
|
|
2
|
|
(12
|
)
|
|
133
|
Gordons
|
|
|
|
42
|
|
—
|
|
(10
|
)
|
|
32
|
Mappins
|
|
|
|
34
|
|
—
|
|
(12
|
)
|
|
22
|
Total Zale Jewelry
|
|
|
|
970
|
|
13
|
|
(73
|
)
|
|
910
|
Piercing Pagoda
|
|
|
|
616
|
|
9
|
|
(17
|
)
|
|
608
|
Zale division
|
|
|
|
1,586
|
|
22
|
|
(90
|
)
|
|
1,518
|
H.Samuel
|
|
|
|
304
|
|
2
|
|
(2
|
)
|
|
304
|
Ernest Jones
|
|
|
|
204
|
|
1
|
|
(1
|
)
|
|
204
|
UK Jewelry division
|
|
|
|
508
|
|
3
|
|
(3
|
)
|
|
508
|
Signet
|
|
|
|
3,682
|
|
80
|
|
(123
|
)
|
|
3,639
|
|
|
|
|
|
|
|
|
|
|
|
|
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
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Access code: 5595748
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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.
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 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.
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Condensed Consolidated Income Statements
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(Unaudited)
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|
|
|
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|
|
|
|
|
|
13 weeks ended
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39 weeks ended
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(in millions, except per share amounts)
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October 28, 2017
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October 29, 2016
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October 28, 2017
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October 29, 2016
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Sales
|
|
|
|
1,156.9
|
|
|
1,186.2
|
|
|
3,959.9
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|
|
4,138.5
|
|
Cost of sales
|
|
|
|
(835.8
|
)
|
|
(836.2
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)
|
|
(2,689.7
|
)
|
|
(2,723.2
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)
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Gross margin
|
|
|
|
321.1
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|
|
350.0
|
|
|
1,270.2
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|
|
1,415.3
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Selling, general and administrative expenses
|
|
|
|
(375.9
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)
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|
(386.5
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)
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|
(1,237.7
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)
|
|
(1,264.9
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)
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Credit transaction, net
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|
|
|
(12.2
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)
|
|
—
|
|
|
2.6
|
|
|
—
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Other operating income, net
|
|
|
|
72.5
|
|
|
68.6
|
|
|
221.3
|
|
|
213.6
|
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Operating income
|
|
|
|
5.5
|
|
|
32.1
|
|
|
256.4
|
|
|
364.0
|
|
Interest expense, net
|
|
|
|
(16.6
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)
|
|
(12.7
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)
|
|
(42.7
|
)
|
|
(36.4
|
)
|
(Loss) income before income taxes
|
|
|
|
(11.1
|
)
|
|
19.4
|
|
|
213.7
|
|
|
327.6
|
|
Income taxes
|
|
|
|
7.2
|
|
|
(2.4
|
)
|
|
(45.7
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)
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|
(81.9
|
)
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Net (loss) income
|
|
|
|
(3.9
|
)
|
|
17.0
|
|
|
168.0
|
|
|
245.7
|
|
Dividends on redeemable convertible preferred shares
|
|
|
|
(8.2
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)
|
|
(2.2
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)
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(24.6
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)
|
|
(2.2
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)
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Net (loss) income attributable to common shareholders
|
|
|
|
(12.1
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)
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|
14.8
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|
|
143.4
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|
|
243.5
|
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(Loss) earnings per common share:
|
|
|
|
|
|
|
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|
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Basic
|
|
|
|
$
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(0.20
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)
|
|
$
|
0.20
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|
|
$
|
2.24
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|
|
$
|
3.19
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Diluted
|
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.20
|
|
|
$
|
2.24
|
|
|
$
|
3.18
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Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
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Basic
|
|
|
|
60.1
|
|
|
73.5
|
|
|
64.0
|
|
|
76.4
|
|
Diluted
|
|
|
|
60.1
|
|
|
73.6
|
|
|
64.1
|
|
|
76.5
|
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Dividends declared per common share
|
|
|
|
$
|
0.31
|
|
|
$
|
0.26
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|
|
$
|
0.93
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|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Condensed Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
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(in millions, except par value per share amount)
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October 28, 2017
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January 28, 2017
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October 29, 2016
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Assets
|
|
|
|
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|
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Current assets:
|
|
|
|
|
|
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Cash and cash equivalents
|
|
|
|
113.4
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|
|
98.7
|
|
|
82.7
|
|
Accounts receivable, net
|
|
|
|
640.1
|
|
|
1,858.0
|
|
|
1,581.1
|
|
Other receivables
|
|
|
|
80.3
|
|
|
95.9
|
|
|
74.2
|
|
Other current assets
|
|
|
|
145.0
|
|
|
136.3
|
|
|
146.8
|
|
Income taxes
|
|
|
|
17.3
|
|
|
4.4
|
|
|
20.8
|
|
Inventories
|
|
|
|
2,466.1
|
|
|
2,449.3
|
|
|
2,649.4
|
|
Total current assets
|
|
|
|
3,462.2
|
|
|
4,642.6
|
|
|
4,555.0
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation of
$1,162.7, $1,049.4 and $1,015.4, respectively
|
|
|
|
855.1
|
|
|
822.9
|
|
|
791.1
|
|
Goodwill
|
|
|
|
867.1
|
|
|
517.6
|
|
|
517.0
|
|
Intangible assets, net
|
|
|
|
410.4
|
|
|
417.0
|
|
|
419.8
|
|
Other assets
|
|
|
|
169.1
|
|
|
165.1
|
|
|
157.5
|
|
Deferred tax assets
|
|
|
|
1.3
|
|
|
0.7
|
|
|
—
|
|
Retirement benefit asset
|
|
|
|
35.5
|
|
|
31.9
|
|
|
47.1
|
|
Total assets
|
|
|
|
5,800.7
|
|
|
6,597.8
|
|
|
6,487.5
|
|
Liabilities and Shareholders’ equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Loans and overdrafts
|
|
|
|
291.8
|
|
|
91.1
|
|
|
288.8
|
|
Accounts payable
|
|
|
|
324.9
|
|
|
255.7
|
|
|
382.2
|
|
Accrued expenses and other current liabilities
|
|
|
|
430.5
|
|
|
478.2
|
|
|
402.9
|
|
Deferred revenue
|
|
|
|
270.3
|
|
|
276.9
|
|
|
256.7
|
|
Income taxes
|
|
|
|
—
|
|
|
101.8
|
|
|
4.4
|
|
Total current liabilities
|
|
|
|
1,317.5
|
|
|
1,203.7
|
|
|
1,335.0
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
696.8
|
|
|
1,317.9
|
|
|
1,324.2
|
|
Other liabilities
|
|
|
|
244.4
|
|
|
213.7
|
|
|
219.9
|
|
Deferred revenue
|
|
|
|
646.1
|
|
|
659.0
|
|
|
632.1
|
|
Deferred tax liabilities
|
|
|
|
143.8
|
|
|
101.4
|
|
|
133.4
|
|
Total liabilities
|
|
|
|
3,048.6
|
|
|
3,495.7
|
|
|
3,644.6
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Series A redeemable convertible preferred shares of $.01 par
value: authorized 500 shares, 0.625 shares outstanding (January 28,
2017 and October 29, 2016: 0.625 shares outstanding)
|
|
|
|
613.1
|
|
|
611.9
|
|
|
611.7
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
Common shares of $0.18 par value: authorized 500 shares, 60.4 shares
outstanding (January 28, 2017: 68.3 outstanding; October 29, 2016:
69.6 outstanding)
|
|
|
|
15.7
|
|
|
15.7
|
|
|
15.7
|
|
Additional paid-in capital
|
|
|
|
285.6
|
|
|
280.7
|
|
|
128.5
|
|
Other reserves
|
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
Treasury shares at cost: 26.8 shares (January 28, 2017: 18.9 shares;
October 29, 2016: 17.6 shares)
|
|
|
|
(1,945.2
|
)
|
|
(1,494.8
|
)
|
|
(1,338.9
|
)
|
Retained earnings
|
|
|
|
4,074.9
|
|
|
3,995.9
|
|
|
3,727.8
|
|
Accumulated other comprehensive loss
|
|
|
|
(292.4
|
)
|
|
(307.7
|
)
|
|
(302.3
|
)
|
Total shareholders’ equity
|
|
|
|
2,139.0
|
|
|
2,490.2
|
|
|
2,231.2
|
|
Total liabilities, redeemable convertible preferred shares and
shareholders’ equity
|
|
|
|
5,800.7
|
|
|
6,597.8
|
|
|
6,487.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
39 weeks ended
|
(in millions)
|
|
|
|
October 28, 2017
|
|
October 29, 2016
|
Cash flows from operating activities
|
|
|
|
|
|
|
Net income
|
|
|
|
168.0
|
|
|
245.7
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
147.1
|
|
|
138.8
|
|
Amortization of unfavorable leases and contracts
|
|
|
|
(10.8
|
)
|
|
(14.9
|
)
|
Pension benefit
|
|
|
|
(3.6
|
)
|
|
(1.3
|
)
|
Share-based compensation
|
|
|
|
11.0
|
|
|
14.0
|
|
Deferred taxation
|
|
|
|
41.7
|
|
|
60.9
|
|
Excess tax benefit from exercise of share awards
|
|
|
|
—
|
|
|
(1.3
|
)
|
Credit transaction, net
|
|
|
|
(30.9
|
)
|
|
—
|
|
Amortization of debt discount and issuance costs
|
|
|
|
3.2
|
|
|
2.2
|
|
Other non-cash movements
|
|
|
|
1.5
|
|
|
1.9
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Decrease in accounts receivable
|
|
|
|
286.1
|
|
|
174.0
|
|
Proceeds from sale of in-house finance receivables
|
|
|
|
960.2
|
|
|
—
|
|
Decrease in other receivables and other assets
|
|
|
|
19.6
|
|
|
9.0
|
|
Increase in other current assets
|
|
|
|
(2.5
|
)
|
|
(15.4
|
)
|
Decrease (increase) in inventories
|
|
|
|
4.6
|
|
|
(217.0
|
)
|
Increase in accounts payable
|
|
|
|
39.7
|
|
|
114.1
|
|
Decrease in accrued expenses and other liabilities
|
|
|
|
(5.4
|
)
|
|
(82.2
|
)
|
Decrease in deferred revenue
|
|
|
|
(29.5
|
)
|
|
(2.5
|
)
|
Decrease in income taxes payable
|
|
|
|
(115.3
|
)
|
|
(62.6
|
)
|
Pension plan contributions
|
|
|
|
(2.4
|
)
|
|
(2.5
|
)
|
Net cash provided by operating activities
|
|
|
|
1,482.3
|
|
|
360.9
|
|
Investing activities
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
|
|
(166.1
|
)
|
|
(195.6
|
)
|
Purchase of available-for-sale securities
|
|
|
|
(1.7
|
)
|
|
(10.4
|
)
|
Proceeds from sale of available-for-sale securities
|
|
|
|
0.9
|
|
|
10.0
|
|
Acquisition of R2Net Inc., net of cash acquired
|
|
|
|
(332.4
|
)
|
|
—
|
|
Net cash used in investing activities
|
|
|
|
(499.3
|
)
|
|
(196.0
|
)
|
Financing activities
|
|
|
|
|
|
|
Dividends paid on common shares
|
|
|
|
(57.7
|
)
|
|
(57.5
|
)
|
Dividends paid on redeemable convertible preferred shares
|
|
|
|
(26.9
|
)
|
|
—
|
|
Proceeds from issuance of redeemable convertible preferred shares,
net of issuance costs
|
|
|
|
—
|
|
|
611.6
|
|
Proceeds from term and bridge loans
|
|
|
|
350.0
|
|
|
—
|
|
Repayments of term and bridge loans
|
|
|
|
(365.7
|
)
|
|
(12.0
|
)
|
Proceeds from securitization facility
|
|
|
|
1,745.9
|
|
|
1,837.1
|
|
Repayments of securitization facility
|
|
|
|
(2,345.9
|
)
|
|
(1,837.1
|
)
|
Proceeds from revolving credit facility
|
|
|
|
605.0
|
|
|
598.0
|
|
Repayments of revolving credit facility
|
|
|
|
(405.0
|
)
|
|
(339.0
|
)
|
Repurchase of common shares
|
|
|
|
(460.0
|
)
|
|
(1,000.0
|
)
|
Repayments of bank overdrafts
|
|
|
|
(5.9
|
)
|
|
(13.3
|
)
|
Other financing activities
|
|
|
|
(4.5
|
)
|
|
(6.0
|
)
|
Net cash used in financing activities
|
|
|
|
(970.7
|
)
|
|
(218.2
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
98.7
|
|
|
137.7
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
12.3
|
|
|
(53.3
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
2.4
|
|
|
(1.7
|
)
|
Cash and cash equivalents at end of period
|
|
|
|
113.4
|
|
|
82.7
|
|

View source version on businesswire.com: http://www.businesswire.com/news/home/20171121005273/en/
Source: Signet Jewelers Limited