SIGNET JEWELERS REPORTS FISCAL 2023 RESULTS

Full yr non-GAAP working margin displays sustainable structural enhancements

Achieved This fall expectations for income and non-GAAP working revenue

Guiding $11.07 to $11.59 in non-GAAP diluted EPS in Fiscal 2024 ⁽¹⁾

HAMILTON, Bermuda, March 16, 2023 /PRNewswire/ — Signet Jewelers Restricted (“Signet”) (NYSE:SIG), the world’s largest retailer of diamond jewellery, at the moment introduced its outcomes for the 13 weeks (“fourth quarter Fiscal 2023”) and 52 weeks (“Fiscal 2023”) ended January 28, 2023.

“Thanks to our group for his or her dedication, agility, and wonderful execution. We delivered on our three key priorities of rising market share, reaching an annual double-digit non-GAAP working margin, and leveraging capital allocation to drive shareholder returns regardless of headwinds and volatility all year long,” stated Signet Chief Government Officer Virginia C. Drosos. “As we flip to FY24, we’re assured within the sustainable aggressive benefits we have constructed and our capability to leverage our enhanced infrastructure and scale to develop forward of the jewellery trade.”

“Our Fiscal 2024 steering displays confidence in our capability to ship an annual double-digit non-GAAP working margin regardless of a jewellery retail setting that we estimate will decline mid-single digits by way of the yr,” stated Joan Hilson, Chief Monetary, Technique and Companies Officer. “Per our acknowledged capital allocation priorities to drive shareholder returns, we’ve got prioritized as much as $200 million in capital investments, elevated our quarterly widespread dividend to $0.23 per share as a part of our dedication as a dividend development firm, and elevated our share buyback program by $263 million, bringing the entire remaining authorization to roughly $775 million.”

Fourth Quarter Fiscal 2023 Highlights:

• Whole gross sales of $2.7 billion, down $145.1 million or 5.2% (down 4.3%⁽³⁾ on a continuing foreign money foundation) to elevated gross sales in FY22, leading to half from authorities profit packages and the Firm’s strategic transformation together with advertising and marketing initiatives, and up $512.9 million or 23.8% in comparison with FY20. As well as, the present yr quarter was negatively impacted by climate within the US within the peak promoting interval earlier than Christmas, in addition to labor strikes and the affect of the weakened British Pound within the UK.
• Similar retailer gross sales (“SSS”)⁽²⁾ down 9.1% to final yr and up 16.4% to FY20.
• GAAP working revenue of $369.5 million, down from $402.4 million in FY22 and up from $223.2 million in FY20. This fall FY23 contains $35.2 million associated to asset impairment and litigation expenses, in addition to acquisition and integration-related expenses associated to Blue Nile.
• Non-GAAP working revenue⁽³⁾ of $404.7 million in comparison with $411.0 million in FY22 and $270.3 million in FY20.
• GAAP diluted earnings per share (“EPS”) of $5.02, up from $4.91 in This fall of FY22 and $3.14 in This fall of FY20. This fall FY23 EPS contains $0.50 in expenses regarding asset impairments, litigation, and acquisition and integration-related expenses associated to Blue Nile, in addition to a discrete revenue tax expense adjustment for an unsure tax place recorded within the present quarter.
• Non-GAAP diluted EPS⁽³⁾ of $5.52, up from $5.01 in This fall of FY22 and $3.67 in FY20.
• Money and money equivalents at year-end of $1.2 billion, down roughly $252 million from This fall of FY22, pushed primarily by share repurchases, capital investments and the acquisition of Blue Nile offset by money stream from operations in the course of the yr.
• Yr to this point money flows from working actions for Fiscal 2023 of $797.9 million, down from $1.3 billion in Fiscal 2022, primarily attributable to decrease revenue and normalization of stock ranges in the course of the yr.
• Accomplished share repurchases of $64.9 million in the course of the fourth quarter.

By reportable phase:

North America

• Whole gross sales of $2.5 billion, down $103.6 million or 4.0% to final yr, and up $549.5 million or 28.1% to FY20.
• SSS decreased 9.3% versus final yr and have been up 19.8% versus This fall FY20, reflecting larger common transaction values (“ATV”), which elevated 3.9%, however offset by a decrease variety of transactions in comparison with final yr.

Worldwide

• Whole gross sales of $153.2 million, down $30.2 million or 16.5% to final yr, and down $33.0 million or 17.7% to FY20. Whole gross sales within the present yr quarter have been unfavorably impacted by labor strikes and volatility within the UK financial system, in addition to $18.7 million or 9.5% associated to the weakening of the British Pound.
• SSS decreased 6.8% versus final yr reflecting larger ATV, which elevated 13.3%, however offset by a decrease variety of transactions in comparison with final yr.

GAAP gross margin was $1.1 billion, or 41.7% of gross sales, 70 foundation factors larger in comparison with the prior yr quarter. This enchancment displays a 100 basis-point merchandise margin enlargement in our core companies and development in providers which greater than offset the anticipated dilution of Blue Nile, in addition to the deleveraging of fastened prices, primarily occupancy.

GAAP SG&A was $702.5 million, or 26.3% of gross sales, 20 foundation factors decrease versus the prior yr quarter and 310 foundation factors decrease versus the fourth quarter of FY20. The improved SG&A as a share of gross sales in comparison with the prior yr quarter was primarily pushed by the affect of price financial savings initiatives and labor efficiencies on the shops. In comparison with fourth quarter of FY20, price financial savings from new credit score agreements and a extra environment friendly labor mannequin drove nearly all of the advance.

GAAP working revenue was $369.5 million or 13.9% of gross sales, in comparison with $402.4 million, or 14.3% of gross sales within the prior yr fourth quarter and $223.2 million, or 10.4% of gross sales in This fall of FY20.

Non-GAAP working revenue was $404.7 million, or 15.2% of gross sales, in comparison with $411.0 million, or 14.6% of gross sales within the prior yr fourth quarter and $270.3 million, or 12.6% of gross sales in This fall of FY20. Non-GAAP working revenue within the present quarter excluded $35.2 million in expenses regarding asset impairments and litigation, in addition to acquisition and integration expenses associated to Blue Nile.

The present quarter GAAP and non-GAAP efficient tax fee was 24.4% primarily pushed by pre-tax earnings combine by jurisdiction, offset by the affect of a discrete tax expense associated to an unsure tax place recorded within the fourth quarter. On a GAAP foundation, revenue tax expense was $89.5 million in comparison with revenue expense of $82.4 million within the prior yr quarter. On a non-GAAP foundation, revenue tax expense was $98.3 million in comparison with revenue tax expense of $84.6 million within the prior yr quarter.

GAAP diluted EPS was $5.02, together with expenses regarding asset impairments and litigation, in addition to acquisition and integration-related expenses associated to Blue Nile. Excluding these expenses (and associated tax results), diluted EPS was $5.52 on a non-GAAP foundation. GAAP and non-GAAP diluted EPS within the quarter embody the dilutive affect of the popular shares within the share rely primarily based on the extent of web revenue this quarter.

Full Yr Fiscal 2023 Outcomes:

Whole gross sales of $7.8 billion, up $16.1 million or 0.2% to final yr (up 1.1%⁽³⁾ on a continuing foreign money foundation), and up $1.7 billion or 27.8% to FY20. SSS declined 6.1% versus final yr and elevated 18.1% in comparison with FY20.

By reportable phase:

North America

• Whole gross sales of $7.3 billion, up $24.7 million or 0.3% to final yr, and up $1.7 billion or 31.0% to FY20.
• SSS declined 7.0% versus final yr reflecting larger ATV, which elevated 11.2%, however a decrease variety of transactions in comparison with final yr.

Worldwide

• Whole gross sales of $470.1 million, down $22.3 million or 4.5% to final yr, and down $47.9 million or 9.2% to FY20. On a continuing foreign money foundation, gross sales have been up 7.9% for the yr.
• SSS elevated 8.3% versus final yr reflecting larger ATV, which elevated 8.9%, however a decrease variety of transactions in comparison with final yr.

Stability Sheet and Assertion of Money Flows:

Money stream from working actions for Fiscal 2023 was $797.9 million, in comparison with $1.3 billion within the prior yr. Money and money equivalents have been $1.2 billion as of January 28, 2023, in comparison with $1.4 billion at prior-year finish. The yr over yr change to money and money equivalents was primarily pushed by share repurchases and the acquisition of Blue Nile offset by money flows from operations.

Stock ended the yr at $2.2 billion, up 4.4%, or $89.9 million larger to final yr on account of the Firm’s acquisition of Blue Nile. In comparison with pre-pandemic ranges stock is down $485 million or 21% with out acquisitions, and down 8% total.

Signet achieved an adjusted debt to EBITDAR leverage ratio⁽¹⁾ of two.0x, properly inside its acknowledged objective of under 2.75 instances EBITDAR.

Return of Capital:

Signet’s Board of Administrators (“Board”) has declared a quarterly money dividend on widespread shares of $0.23 per share for the primary quarter of Fiscal 2024, payable Might 26, 2023 to shareholders of file on April 28, 2023, with an ex-dividend date of April 27, 2023.

Throughout Fiscal 2023, Signet repurchased roughly 6.1 million shares at a mean price per share of $70.06, or $426 million, together with $64.9 million in the course of the fourth quarter and $50 million from the completion of the accelerated share repurchase program from Fiscal 2022. On March 15, 2023, the Board accepted a $263 million improve to the multi-year authorization beneath its share repurchase program bringing the entire remaining authorization to roughly $775 million, and is web of roughly $25 million of shares repurchased in Fiscal 2024 by way of the date of this launch.

Our Goal and Sustainable Progress:

As an organization with a Goal-inspired enterprise technique, Signet believes in ongoing management in Company Citizenship & Sustainability and views Environmental, Social and Governance (“ESG”) initiatives as an vital development driver. For the third yr in a row, Signet is a Nice Place to Work-Licensed™ firm primarily based on survey responses for our group members. As well as, Nice Place to Work® and Fortune journal has named Signet to the 2022 Greatest Workplaces in Retail™ listing. Signet’s method to provide chain threat administration is a core element of our ESG program. As a tenured chief within the jewellery trade, Signet continues to carry our world suppliers to excessive moral requirements and prioritizes respect for human rights. The “Signet Promise” is Signet’s public dedication to the integrity of our world diamond provide chain although our four-layered system of checks and balances to assist shopper confidence.

First quarter and full yr Fiscal 2024 Steering:

Signet’s first quarter and full yr Fiscal 2024 steering for gross sales, working revenue and diluted EPS under is offered on a non-GAAP foundation:

Forecasted non-GAAP working revenue and diluted EPS offered above excludes potential non-recurring expenses, equivalent to asset impairments or integration-related prices related to the acquisition of Blue Nile. Nonetheless, given the potential affect of non-recurring expenses to the GAAP working revenue and diluted EPS, we can not present forecasted GAAP working revenue or diluted EPS or the possible significance of such gadgets with out unreasonable efforts. As such, we don’t current a reconciliation of forecasted non-GAAP working revenue and diluted EPS to corresponding forecasted GAAP quantities.

The Firm’s first quarter and Fiscal 2024 Outlook relies on the next assumptions:

• Annual US Jewellery trade revenues are anticipated to be down mid-single digits. The Firm’s steering contemplates market share beneficial properties in opposition to this complete trade efficiency vary.
• Deliberate capital investments as much as $200 million, reflecting investments in banner differentiation, together with shops, Linked Commerce capabilities, and digital and know-how development.
• The Firm expects headwinds to proceed in engagements with restoration later in Fiscal 2024, and proceed to rebound in Fiscal 2025. Bridal total, inclusive of engagements, traditionally represents roughly 47-49% of Signet’s merchandise gross sales over the past 5 years.
• Moreover, with the slowing financial system and continued inflationary pressures we don’t count on to see a rebound within the lower cost level shopper within the coming yr.
• Whereas timing and magnitude is troublesome to foretell, Signet additionally anticipates a continued shift of shopper discretionary spending away from the jewellery class reflecting decelerating ranges of shopper confidence and pent-up demand for experience-oriented classes, in addition to expects additional impacts of inflation and different macroeconomic components on shopper spending.
• Signet’s efforts to mitigate provide chain disruption have been efficient up to now. Steering assumes no vital disruptions in availability of stock.
• Annual tax fee of roughly 19% assumes no discrete gadgets and no modifications in present tax legal guidelines throughout Fiscal 2024.
• Earnings per share for Fiscal 2024 excludes the affect of any additional share repurchases past the roughly 0.3 million shares repurchased in Fiscal 2024 by way of the date of this launch, and contains the dilutive impact of the 8.1 million most well-liked shares.

Convention Name:

A convention name is scheduled for March 16, 2023 at 8:30 a.m. ET and a simultaneous audio webcast is on the market at www.signetjewelers.com.

To pre-register for this name, please go to the next hyperlink:

https://www.netroadshow.com/occasions/login?present=3e81ed21&confId=46003
You’ll obtain your entry particulars by way of electronic mail.

Becoming a member of by Phone:
Canada dial-in quantity (Toll Free): 1 833 950 0062
Canada dial-in quantity (Native): 1 226 828 7575
United States: 1 844 200 6205
United States (Native): 1 646 904 5544
All different places: +1 929 526 1599
Entry code: 677672

A replay and transcript of the decision might be posted on Signet’s web site as quickly as they’re accessible and might be accessible for one yr.

About Signet and Protected Harbor Assertion:

Signet Jewelers Restricted is the world’s largest retailer of diamond jewellery. As a purpose-driven and sustainability-focused firm, Signet is a participant within the United Nations International Compact and adheres to its principles-based method to accountable enterprise. Signet is a Nice Place to Work –Licensed™ firm and has been named to the Bloomberg Gender-Equality Index for 4 consecutive years. Signet operates roughly 2,800 shops primarily beneath the identify manufacturers of Kay Jewelers, Zales, Jared, Banter by Piercing Pagoda, Diamonds Direct, JamesAllen.com, Blue Nile, Peoples, H. Samuel, Ernest Jones, and the jewellery subscription service, Rocksbox. Additional data on Signet is on the market at www.signetjewelers.com. See additionally www.kay.com, www.zales.com, www.jared.com, www.banter.com, www.diamondsdirect.com, www.jamesallen.com, www.bluenile.com, www.peoplesjewellers.com, www.hsamuel.co.uk, www.ernestjones.co.uk, and www.rocksbox.com.

This launch comprises statements that are forward-looking statements inside the which means of the Non-public Securities Litigation Reform Act of 1995. These statements are primarily based upon administration’s beliefs and expectations in addition to on assumptions made by and knowledge presently accessible to administration, seem in quite a lot of locations all through this doc and embody statements concerning, amongst different issues, outcomes of operations, monetary situation, liquidity, prospects, development, methods and the trade through which we function. The usage of the phrases “expects,” “intends,” “anticipates,” “estimates,” “predicts,” “believes,” “ought to,” “potential,” “might,” “preliminary,” “forecast,” “goal,” “plan,” or “goal,” and different comparable expressions are meant to determine forward-looking statements. These forward-looking statements aren’t ensures of future efficiency and are topic to quite a lot of dangers and uncertainties which might trigger the precise outcomes to not be realized, together with, however not restricted to: problem or delay in executing or integrating an acquisition, together with Diamonds Direct and Blue Nile, or executing different main enterprise or strategic initiatives, the detrimental impacts that the COVID-19 pandemic has had, and will have sooner or later, on our enterprise, monetary situation, profitability and money flows; the impact of steps we absorb response to the pandemic; the severity, length and potential resurgence of the pandemic (together with by way of variants), together with whether or not it’s essential to briefly reclose our shops, distribution facilities and company amenities or for our suppliers and distributors to briefly reclose their amenities; the tempo of restoration because the pandemic subsides and the heightened affect COVID-19 has on most of the dangers described herein, together with with out limitation dangers regarding disruptions in our provide chain, our capability to draw and retain labor, decelerating ranges of shopper confidence and shopper behaviors equivalent to willingness to patronize procuring facilities and shifts in spending away from the jewellery class towards extra experiential purchases equivalent to journey, the impacts of the expiration of presidency stimulus on total shopper spending, our stage of indebtedness and covenant compliance, availability of enough capital, our capability to execute our enterprise plans, our lease obligations and relationships with our landlords, and asset impairments; normal financial or market circumstances, together with impacts of inflation, the cessation of presidency stimulus packages, or different pricing setting components on our commodity prices (together with diamonds) or different working prices; a chronic slowdown within the development of the jewellery market or a recession within the total financial system; monetary market dangers; a decline in shopper discretionary spending or deterioration in shopper monetary place, together with because of the impacts of inflation and rising costs on requirements equivalent to gasoline and groceries; our capability to optimize our transformation methods; modifications to rules regarding buyer credit score; disruption within the availability of credit score for purchasers and buyer incapability to fulfill credit score cost obligations; our capability to realize the advantages associated to the outsourcing of the credit score portfolio, together with attributable to know-how disruptions and/or disruptions arising from modifications to or termination of the related outsourcing agreements, in addition to a possible improve in credit score prices because of the present rate of interest setting; deterioration within the efficiency of particular person companies or of our market worth relative to its e book worth, leading to impairments of long-lived property or intangible property or different opposed monetary penalties; the volatility of our inventory worth; the affect of monetary covenants, credit score rankings or curiosity volatility on our capability to borrow; our capability to take care of enough ranges of liquidity for our money wants, together with debt obligations, cost of dividends, deliberate share repurchases (together with execution of accelerated share repurchases and the cost of associated to excise taxes) and capital expenditures in addition to the power of our clients, suppliers and lenders to entry sources of liquidity to supply for their very own money wants; modifications in our credit standing; potential regulatory modifications; future legislative and regulatory necessities within the US and globally regarding local weather change, together with any new local weather associated disclosure or compliance necessities, equivalent to these lately proposed by the SEC; change fee fluctuations; the associated fee, availability of and demand for diamonds, gold and different treasured metals, together with any affect on the worldwide market provide of diamonds because of the ongoing Russia–Ukraine battle or associated sanctions; stakeholder reactions to disclosure concerning the supply and use of sure minerals; scrutiny or detention of products produced in sure territories ensuing from commerce restrictions; seasonality of our enterprise; the merchandising, pricing and stock insurance policies adopted by us and our capability to handle stock ranges; {our relationships} with suppliers together with the power to proceed to make the most of prolonged cost phrases and the power to acquire merchandise that clients want to buy; the failure to adequately deal with the affect of current tariffs and/or the imposition of further duties, tariffs, taxes and different expenses or different boundaries to commerce or impacts from commerce relations; the extent of competitors and promotional exercise within the jewellery sector; our capability to optimize our multi-year technique to realize market share, develop and enhance current providers, innovate and obtain sustainable, long-term development; the upkeep and continued innovation of our OmniChannel retailing and skill to extend digital gross sales, in addition to administration of digital advertising and marketing prices; modifications in shopper attitudes concerning jewellery and failure to anticipate and maintain tempo with altering vogue traits; modifications within the provide and shopper acceptance of and demand for gem high quality lab created diamonds and enough identification of using substitute merchandise in our jewellery; capability to execute profitable advertising and marketing packages and handle social media; the power to optimize our actual property footprint; the efficiency of and skill to recruit, prepare, inspire and retain certified group members – significantly in areas experiencing low unemployment charges; administration of social, moral and environmental dangers; the fame of Signet and its banners; inadequacy in and disruptions to inner controls and programs, together with associated to the migration to new data know-how programs which affect monetary reporting; safety breaches and different disruptions to our data know-how infrastructure and databases; an opposed improvement in authorized or regulatory proceedings or tax issues, together with any new claims or litigation introduced by workers, suppliers, customers or shareholders, regulatory initiatives or investigations, and ongoing compliance with rules and any consent orders or different authorized or regulatory choices; failure to adjust to labor rules; collective bargaining exercise; modifications in company taxation charges, legal guidelines, guidelines or practices within the US and different jurisdictions through which our subsidiaries are included, together with developments associated to the tax therapy of firms engaged in Web commerce or deductions related to funds to overseas associated events which might be topic to a low efficient tax fee; dangers associated to worldwide legal guidelines and Signet being a Bermuda company; dangers regarding the end result of pending litigation; our capability to guard our mental property or bodily property; modifications in assumptions utilized in making accounting estimates regarding gadgets equivalent to prolonged service plans; or the affect of weather-related incidents, pure disasters, organized crime or theft, strikes, protests, riots or terrorism, acts of warfare (together with the continued Russia–Ukraine battle), or one other public well being disaster or illness outbreak, epidemic or pandemic on our enterprise.

For a dialogue of those and different dangers and uncertainties which might trigger precise outcomes to vary materially from these expressed in any forward-looking assertion, see the “Threat Elements” and “Ahead-Trying Statements” sections of Signet’s Fiscal 2022 Annual Report on Kind 10-Okay filed with the SEC on March 17, 2022, and quarterly studies on Kind 10-Q and the “Protected Harbor Statements” in present studies on Kind 8-Okay filed with the SEC. Signet undertakes no obligation to replace or revise any forward-looking statements to replicate subsequent occasions or circumstances, besides as required by regulation.

Traders:
[email protected]

Media:
Colleen Rooney
Chief Communications & ESG Officer
+1-330-668-5932
[email protected]

Non-GAAP Monetary Measures

Along with reporting the Firm’s monetary ends in accordance with typically accepted accounting ideas (“GAAP”), the Firm studies sure monetary measures on a non-GAAP foundation. The Firm believes that non-GAAP monetary measures, when reviewed along with GAAP monetary measures, can present extra data to help traders in evaluating historic traits and present interval efficiency. For these causes, inner administration reporting additionally contains non-GAAP measures. Gadgets could also be excluded from GAAP monetary measures when the Firm believes this supplies helpful supplementary data to administration and traders in assessing the working efficiency of our enterprise.

Sure non-GAAP monetary measures utilized by the Firm embody non-GAAP working revenue (loss), free money stream and adjusted free money stream, non-GAAP earnings (loss) per share, and gross sales modifications on a continuing foreign money foundation. The Firm supplies the year-over-year change in complete gross sales excluding the affect of overseas foreign money fluctuations to supply transparency to efficiency and improve traders’ understanding of underlying enterprise traits. The impact from overseas foreign money, calculated on a continuing foreign money foundation, is decided by making use of present yr common change charges to prior yr gross sales in native foreign money.

The Firm estimates the tax impact of all non-GAAP changes by making use of a statutory tax fee to every merchandise. The revenue tax gadgets symbolize the discrete quantity that affected the interval. These non-GAAP monetary measures needs to be thought of along with, and never superior to or as an alternative to the GAAP monetary measures offered on this earnings launch and the Firm’s condensed consolidated monetary statements and different publicly filed studies. As well as, our non-GAAP monetary measures might not be the identical as or akin to comparable non-GAAP measures offered by different firms.

The next data supplies reconciliations of essentially the most comparable monetary measures calculated and offered in accordance with GAAP to offered non-GAAP monetary measures.

Actual Property Portfolio:

Signet has a diversified actual property portfolio. On January 28, 2023, Signet operated 2,808 shops totaling 4.2 million sq. toes of promoting area. In comparison with prior yr, retailer rely decreased by 46 and sq. toes of promoting area elevated 0.5%.

SOURCE Signet Jewelers Ltd.