Fourth Quarter Finished Ahead of Updated Expectations
January and FY26 To-Date Positive Same Store Sales1 Trend
CEO Outlines New Strategy and Reorganization Plan
HAMILTON, Bermuda–(BUSINESS WIRE)–Signet Jewelers Limited (“Signet” or the “Company”) (NYSE:SIG), the world’s largest retailer of diamond jewelry, today announced its results for the 13 weeks (“fourth quarter Fiscal 2025”) and 52 weeks (“Fiscal 2025”) ended February 1, 2025.
“I’d like to thank the team for their efforts in delivering a positive comp in January. This positive trend has continued into the first quarter to date with growth across all categories. Since holiday, we increased our depth of assortment at key price points while also benefiting from improved Bridal trends,” said J.K. Symancyk, Chief Executive Officer. “Our overall Q4 performance and lack of growth over the past several quarters informed our new strategy to grow our business. This transformative strategy is called ‘Grow Brand Love’ and builds on a strong foundation to create shareholder value. We will infuse more style and design-led product into our assortment to accelerate our growth in self-purchase and gifting while expanding our leadership position in Bridal. To activate our strategy, we are reorganizing our business to drive a Brand mind-set and centralizing core capabilities to improve speed, maximize benefits of scale, and deliver organic growth over time.”
“Signet delivered more than $400 million of free cash flow, our 5th year in a row of strong cash conversion to adjusted operating income. This enabled a reduction in our diluted share count by nearly 20% in FY25 by returning approximately $1 billion to shareholders including the convertible preferred redemptions. Our capital allocation priorities are organic growth and return of excess cash to shareholders while maintaining a conservative balance sheet,” said Joan Hilson, Chief Operating and Financial Officer. “We are initiating FY26 guidance reflecting sales that assume a measured consumer environment. Our reorganization plan is expected to fund the reset of incentive compensation with further benefit expected beyond FY26. We are focused on real estate optimization and expect to transition over 10% of mall locations to off-mall and the eCommerce channel over the next three years, leveraging our average mall lease term of just over 2 years.”
Fourth Quarter Fiscal 2025 Highlights:
- Sales of $2.4 billion, down $145.0 million or 5.8% (down 5.7% on a constant currency basis(2)) to Q4 of FY24, including cycling an additional week a year ago.
- Same store sales (“SSS”)(1) down 1.1% to Q4 of FY24.
- Merchandise Average Unit Retail (“AUR”)(3) increased approximately 7%.
- Operating income of $152.6 million, down from $416.3 million in Q4 of FY24. Operating income was impacted by non-cash impairment charges of $200.7 million substantially related to Digital brands.
- Adjusted operating income(2) of $355.5 million, down from $409.7 million in Q4 of FY24.
- Diluted earnings per share (“EPS”) of $2.30, compared to $11.75 in Q4 of FY24. The current quarter includes $4.58 of asset impairment charges, and the prior year fourth quarter includes $4.94 related to the income tax benefit from the enactment of the Bermuda Corporate Income Tax Act of 2023 (“CITA2023”).
- Adjusted diluted EPS(2) of $6.62, compared to $6.73 in Q4 of FY24.
|
(1) |
Same store sales include physical stores and eCommerce sales. As described further below, fourth quarter Fiscal 2025 same store sales have been calculated by aligning the sales weeks of the current quarter to the equivalent sales weeks in the prior fiscal year period. |
|
(2) |
See the non-GAAP financial measures section below. |
|
(3) |
AUR reflects operational merchandise sales divided by units. |
Fourth Quarter and Full Year Fiscal 2025 Results:
|
(in millions, except per share amounts) |
|
Q4 Fiscal 2025 |
|
Q4 Fiscal 2024 |
|
Fiscal 2025 |
|
Fiscal 2024 |
||||||||
|
Sales |
|
$ |
2,352.6 |
|
|
$ |
2,497.6 |
|
|
$ |
6,703.8 |
|
|
$ |
7,171.1 |
|
|
SSS % change (1) (2) |
|
|
(1.1 |
)% |
|
|
(9.6 |
)% |
|
|
(3.4 |
)% |
|
|
(11.6 |
)% |
|
GAAP |
|
|
|
|
|
|
|
|
||||||||
|
Operating income |
|
$ |
152.6 |
|
|
$ |
416.3 |
|
|
$ |
110.7 |
|
|
$ |
621.5 |
|
|
Operating margin |
|
|
6.5 |
% |
|
|
16.7 |
% |
|
|
1.7 |
% |
|
|
8.7 |
% |
|
Diluted EPS (loss per share) |
|
$ |
2.30 |
|
|
$ |
11.75 |
|
|
$ |
(0.81 |
) |
|
$ |
15.01 |
|
|
Adjusted (3) |
|
|
|
|
|
|
|
|
||||||||
|
Adjusted operating income |
|
$ |
355.5 |
|
|
$ |
409.7 |
|
|
$ |
498.1 |
|
|
$ |
642.8 |
|
|
Adjusted operating margin |
|
|
15.1 |
% |
|
|
16.4 |
% |
|
|
7.4 |
% |
|
|
9.0 |
% |
|
Adjusted diluted EPS |
|
$ |
6.62 |
|
|
$ |
6.73 |
|
|
$ |
8.94 |
|
|
$ |
10.37 |
|
|
(1) |
Same store sales include physical stores and eCommerce sales. |
|
(2) |
The 53rd week in Fiscal 2024 has resulted in a shift as the current fiscal year began a week later than the previous fiscal year. As such, same store sales for Fiscal 2025 have been calculated by aligning the sales weeks of the current quarter and year to date periods to the equivalent sales weeks in the prior fiscal year. Total reported sales continue to be calculated based on the reported fiscal periods. |
|
(3) |
See non-GAAP financial measures below. |
Fourth Quarter Fiscal 2025 Results:
Gross margin was $1.0 billion, down approximately $80 million to Q4 of FY24, including more than $35 million from cycling the 53rd week of FY24. Gross merchandise margin expanded 30 basis points, but was more than offset primarily by fixed cost deleverage.
SG&A was $639.2 million, or 27.2% of sales, down from $671.9 million, or 26.9% of sales, in Q4 of FY24. The change in SG&A as a percentage of sales was primarily driven by higher advertising expense on lower sales.
Operating income was $152.6 million, or 6.5% of sales, compared to $416.3 million, or 16.7% of sales, in Q4 of FY24. Operating income was impacted by non-cash impairment charges of $200.7 million substantially related to the Digital brands. While integration was complete, the impairment was substantially caused by the slower than anticipated recovery in the second half of Fiscal 2025.
Adjusted operating income was $355.5 million, or 15.1% of sales, compared to $409.7 million, or 16.4% of sales in Q4 of FY24.
The current quarter income tax expense was $53.5 million compared to income tax benefit of $199.2 million in Q4 of FY24. Adjusted income tax expense was $67.0 million compared to income tax expense of $62.8 million in the Q4 of FY24.
Diluted EPS was $2.30, down from $11.75 in Q4 of FY24. Diluted EPS in the current quarter includes $4.58 of asset impairment charges. Adjusted diluted EPS was $6.62, compared to $6.73 in Q4 of FY24, reflecting reduced diluted share count from the retirement of the preferred shares and common share repurchases.
Full Year Fiscal 2025 Results:
Sales of $6.7 billion, down $467.3 million or 6.5% to last year (down 6.6% on a constant currency basis(1)). SSS declined 3.4% versus last year. Gross margin and adjusted gross margin were $2.6 billion, down from $2.8 billion in FY24. SG&A and adjusted SG&A were $2.1 billion, down from $2.2 billion in FY24.
Operating income was $110.7 million, or 1.7% of sales, compared to $621.5 million, or 8.7% of sales in FY24. Operating income was impacted by non-cash impairment charges of $369.2 million substantially related to Digital brands.
Adjusted operating income(1) was $498.1 million, or 7.4% of sales, compared to $642.8 million, or 9.0% of sales in FY24.
Diluted loss per share was $0.81, down from diluted EPS $15.01 last year. On an adjusted basis, diluted EPS(1) was $8.94, down from $10.37 last year, and reflects a reduced share count from the retirement of the preferred shares and common share repurchases. On a GAAP basis, the impact of the preferred shares was anti-dilutive.
|
(1) |
See the non-GAAP financial measures section below. |
Balance Sheet and Statement of Cash Flows:
Cash flow from operating activities for Fiscal 2025 was $590.9 million, compared to $546.9 million in the prior year. Capital expenditures for Fiscal 2025 were $153.0 million. Cash and cash equivalents were $604.0 million as of February 1, 2025. Inventory ended the year at $1.94 billion, approximately flat to last year.
Capital Returns to Shareholders:
Signet’s Board of Directors has declared a quarterly cash dividend on common shares of $0.32 per share for the first quarter of Fiscal 2026, payable May 23, 2025, to shareholders of record on April 25, 2025, with an ex-dividend date of April 25, 2025. The $0.32 per share common dividend represents a 10% increase in the dividend.
For Fiscal 2025, Signet repurchased approximately 1.6 million shares for $138.0 million, including $24.2 million during the fourth quarter. The Company had approximately $723.0 million in share repurchase authorization remaining at the end of the fiscal year.
First Quarter and Full Year Fiscal 2026 Guidance:
|
|
First Quarter |
|
Total sales |
$1.50 billion to $1.53 billion |
|
Same store sales |
Flat to +2.0% |
|
Adjusted operating income (1) |
$48 million to $60 million |
|
Adjusted EBITDA (1) |
$94 million to $106 million |
|
(1) |
See description of non-GAAP financial measures below. |
| Forecasted adjusted operating income and adjusted EBITDA exclude potential non-recurring charges, such as restructuring and reorganizational charges, asset impairments, or integration-related costs. However, given the potential impact of non-recurring charges to the GAAP operating income, we cannot provide forecasted GAAP operating income or the probable significance of such items without unreasonable efforts. As such, we do not present a reconciliation of forecasted adjusted operating income or adjusted EBITDA to corresponding forecasted GAAP amounts. | |
|
|
Fiscal 2026 |
|
Total sales |
$6.53 billion to $6.80 billion |
|
Same store sales |
(2.5%) to +1.5% |
|
Adjusted operating income (1) |
$420 million to $510 million |
|
Adjusted EBITDA (1) |
$605 million to $695 million |
|
Adjusted diluted EPS (1) |
$7.31 to $9.10 |
|
(1) |
See description of non-GAAP financial measures below. |
| Forecasted adjusted operating income, adjusted EBITDA and adjusted diluted EPS provided above exclude potential non-recurring charges, such as restructuring and reorganizational charges, asset impairments, or integration-related costs. However, given the potential impact of non-recurring charges to the GAAP operating income and diluted EPS, we cannot provide forecasted GAAP operating income or diluted EPS or the probable significance of such items without unreasonable efforts. As such, we do not present a reconciliation of forecasted adjusted operating income, adjusted EBITDA and adjusted diluted EPS to corresponding forecasted GAAP amounts. | |
The Company’s Fiscal 2026 guidance is based on the following assumptions:
- Total sales anticipates a measured consumer environment, providing for variability in consumer spending over the year.
- Does not reflect any significant impact resulting from new tariffs and regulations. The Company has a team that actively manages tariffs and will work closely with vendors as needed.
- Planned capital expenditures of approximately $145 million to $160 million.
- Net square footage decline of 1% to flat for the year.
- Annual tax rate of 23% to 25%, including the non-cash impact of approximately 4% for the CITA2023 Bermuda tax impact previously disclosed; excludes potential discrete items.
- Diluted EPS for Fiscal 2026 excludes any potential further share repurchases subsequent to today.
Our Purpose and Sustainability:
Signet Jewelers Honored for Ethical Practices and Industry Leadership
On March 11, Ethisphere named Signet to its “World’s Most Ethical Companies” list for 2025. This recognition underscores Signet’s dedication to ethical business practices that positively impact employees, the communities in which we operate, and broader stakeholders.
As a leader in ethics, responsible sourcing and business integrity, Signet hosted an industry-wide leadership symposium focused on consumer education about natural diamonds. During the event, Signet announced its intention to collaborate with DeBeers and other industry leaders on marketing and educational initiatives throughout 2025.
Signet also previewed a new, fully traceable diamond collection from Jared that will launch this fall and features responsibly sourced diamonds from Botswana. This collection highlights a digital journey that personalizes each diamond’s story, while emphasizing traceability and responsible sourcing. Signet’s continuous efforts and collaborations in the industry are aimed at enhancing responsible sourcing and positively impacting society in communities we serve.
Conference Call:
A conference call is scheduled for March 19, 2025 at 8:30 a.m. ET and a simultaneous audio webcast is available at www.signetjewelers.com.
The call details are:
Toll Free – North America +1 800 549 8228
International All Other Locations: (Toll – Local – New York) – +1 646 564 2877
Conference ID 92183
Registration for the listen-only webcast is available at the following link:
https://events.q4inc.com/attendee/250901575
A replay and transcript of the call will be posted on Signet’s website as soon as they are available and will be accessible for one year.
About Signet and Safe Harbor Statement:
Signet Jewelers Limited is the world’s largest retailer of diamond jewelry. As a Purpose-driven and sustainability-focused company, Signet is a participant in the United Nations Global Compact and adheres to its principles-based approach to responsible business. Signet operates approximately 2,600 stores primarily under the name brands of Kay Jewelers, Zales, Jared, Banter by Piercing Pagoda, Diamonds Direct, Blue Nile, James Allen, Rocksbox, Peoples Jewellers, H. Samuel, and Ernest Jones. Further information on Signet is available at www.signetjewelers.com. See also www.kay.com, www.zales.com, www.jared.com, www.banter.com, www.diamondsdirect.com, www.bluenile.com, www.jamesallen.com, www.rocksbox.com, www.peoplesjewellers.com, www.hsamuel.co.uk, www.ernestjones.co.uk.
This release contains statements which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management’s beliefs and expectations as well as on assumptions made by and data currently available to management, appear in a number of places throughout this document and include statements regarding, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. The use of the words “guidance,” “expects,” “continue,” “intends,” “anticipates,” “enhance,” “estimates,” “predicts,” “believes,” “should,” “potential,” “may,” “preliminary,” “forecast,” “objective,” “opportunity,” “plan,” “strategy,” or “target,” and other similar expressions are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties which could cause the actual results to not be realized, including, but not limited to: executing or optimizing major business or strategic initiatives, such as expansion of the services business or realizing the benefits of our restructuring plans or transformation strategies, including those that the Company may develop in the future; difficulty or delay in executing or integrating an acquisition; the impact of the conflicts in the Middle East on the operations of our quality control and technology centers in Israel; the negative impacts that public health crisis, disease outbreak, epidemic or pandemic has had, and could have in the future, on our business, financial condition, profitability and cash flows; risks relating to shifts in consumer spending away from the jewelry category or away from the cultural customs of expressing commitments through engagements and weddings; trends toward more experiential purchases such as travel; general economic or market conditions, including impacts of inflation or other pricing environment factors on our commodity costs (including diamonds) or other operating costs; a prolonged slowdown in the growth of the jewelry market or a recession in the overall economy; financial market risks; a decline in consumer discretionary spending or deterioration in consumer financial position; disruptions in our supply chain; our ability to attract and retain labor; changes to regulations relating to customer credit; disruption in the availability of credit for customers and customer inability to meet credit payment obligations, which has occurred and may continue to deteriorate; our ability to achieve the benefits related to the outsourcing of the credit portfolio, including due to technology disruptions and/or disruptions arising from changes to or termination of the relevant outsourcing agreements, as well as a potential increase in credit costs due to the current interest rate environment; deterioration in the performance of individual businesses or of our market value relative to its book value, resulting in further impairments of long-lived assets or intangible assets or other adverse financial consequences; the volatility of our stock price; the impact of financial covenants, credit ratings or interest volatility on our ability to borrow; our ability to maintain adequate levels of liquidity for our cash needs, including debt obligations, payment of dividends, planned share repurchases (including execution of accelerated share repurchases and the payment of related excise taxes) and capital expenditures as well as the ability of our customers, suppliers and lenders to access sources of liquidity to provide for their own cash needs; potential regulatory changes; future legislative and regulatory requirements in the US and globally relating to climate change, including any new climate related disclosure or compliance requirements, such as those recently issued in the state of California; exchange rate fluctuations; the cost, availability of and demand for diamonds, gold and other precious metals, including any impact on the global market supply of diamonds due to the ongoing conflicts in the Middle East, the potential sale or divestiture of the De Beers Diamond Company and its diamond mining operations by parent company Anglo-American plc, and the ongoing Russia-Ukraine conflict or related sanctions; stakeholder reactions to disclosure regarding the source and use of certain minerals; scrutiny or detention of goods produced in certain territories resulting from trade restrictions; seasonality of our business; the merchandising, pricing and inventory policies followed by us and our ability to manage inventory levels; our relationships with suppliers including the ability to continue to utilize extended payment terms and the ability to obtain merchandise that customers wish to purchase; the failure to adequately address the impact of existing tariffs and/or the imposition of additional duties, tariffs, taxes and other charges or other barriers to trade or impacts from trade relations; the level of competition and promotional activity in the jewelry sector; our ability to optimize our multi-year strategy to gain market share, expand and improve existing services, innovate and achieve sustainable, long-term growth; the maintenance and continued innovation of our OmniChannel retailing and ability to increase digital sales, as well as management of digital marketing costs; failure to anticipate and keep pace with changing fashion trends; changes in the costs, retail prices, supply and consumer acceptance of, and demand for gem quality lab-grown diamonds and adequate identification of the use of substitute products in our jewelry; ability to execute successful marketing programs and manage social media; the ability to optimize our real estate footprint, including operating in attractive trade areas and accounting for changes in consumer traffic in mall locations; the performance of and ability to recruit, train, motivate and retain qualified team members – particularly store associates in regions experiencing low unemployment rates and key executive talent during periods of leadership transition, such as our recent appointment of a new Chief Executive Officer; management of social, ethical and environmental risks; ability to deliver on our corporate sustainability goals or our environmental, social and governance goals; the reputation of Signet and its brands; inadequacy in and disruptions to internal controls and systems, including related to the migration to new information technology systems which impact financial reporting; risks associated with the Company’s use of artificial intelligence; security breaches and other disruptions to our or our third-party providers’ information technology infrastructure and databases; an adverse development in legal or regulatory proceedings or tax matters, including any new claims or litigation brought by employees, suppliers, consumers or shareholders, regulatory initiatives or investigations, and ongoing compliance with regulations and any consent orders or other legal or regulatory decisions; failure to comply with labor regulations; collective bargaining activity; changes in corporate taxation rates, laws, rules or practices in the US and other jurisdictions in which our subsidiaries are incorporated, including developments related to the tax treatment of companies engaged in internet commerce or deductions associated with payments to foreign related parties that are subject to a low effective tax rate; risks related to international laws and Signet being a Bermuda corporation; risks relating to the outcome of pending litigation; our ability to protect our intellectual property or assets including cash which could be affected by failure of a financial institution or conditions affecting the banking system and financial markets as a whole; changes in assumptions used in making accounting estimates relating to items such as extended service plans or asset impairments; or the impact of weather-related incidents, natural disasters, organized crime or theft, increased security costs, strikes, protests, riots or terrorism, or acts of war (including the ongoing Russia-Ukraine and conflicts in the Middle East).
For a discussion of these and other risks and uncertainties which could cause actual results to differ materially from those expressed in any forward-looking statement, see the “Risk Factors” and “Forward-Looking Statements” sections of Signet’s Fiscal 2024 Annual Report on Form 10-K filed with the SEC on March 21, 2024, and quarterly reports on Form 10-Q and the “Safe Harbor Statements” in current reports on Form 8-K filed with the SEC. Signet undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required by law.
Condensed Consolidated Statements of Operations (Unaudited)
|
(in millions, except per share amounts) |
13 weeks ended |
|
14 weeks ended |
|
Fiscal 2025 |
|
Fiscal 2024 |
||||||||
|
Sales |
$ |
2,352.6 |
|
|
$ |
2,497.6 |
|
|
$ |
6,703.8 |
|
|
$ |
7,171.1 |
|
|
Cost of sales |
|
(1,351.0 |
) |
|
|
(1,416.3 |
) |
|
|
(4,078.2 |
) |
|
|
(4,345.7 |
) |
|
Gross margin |
|
1,001.6 |
|
|
|
1,081.3 |
|
|
|
2,625.6 |
|
|
|
2,825.4 |
|
|
Selling, general and administrative expenses |
|
(639.2 |
) |
|
|
(671.9 |
) |
|
|
(2,122.6 |
) |
|
|
(2,197.7 |
) |
|
Asset impairments, net |
|
(202.7 |
) |
|
|
(3.4 |
) |
|
|
(372.0 |
) |
|
|
(9.1 |
) |
|
Other operating (expense) income, net |
|
(7.1 |
) |
|
|
10.3 |
|
|
|
(20.3 |
) |
|
|
2.9 |
|
|
Operating income |
|
152.6 |
|
|
|
416.3 |
|
|
|
110.7 |
|
|
|
621.5 |
|
|
Interest (expense) income, net |
|
(0.2 |
) |
|
|
8.7 |
|
|
|
9.8 |
|
|
|
18.7 |
|
|
Other non-operating income (expense), net |
|
1.7 |
|
|
|
2.0 |
|
|
|
3.7 |
|
|
|
(0.4 |
) |
|
Income before income taxes |
|
154.1 |
|
|
|
427.0 |
|
|
|
124.2 |
|
|
|
639.8 |
|
|
Income taxes |
|
(53.5 |
) |
|
|
199.2 |
|
|
|
(63.0 |
) |
|
|
170.6 |
|
|
Net income |
|
100.6 |
|
|
|
626.2 |
|
|
|
61.2 |
|
|
|
810.4 |
|
|
Dividends on redeemable convertible preferred shares |
|
— |
|
|
|
(8.6 |
) |
|
|
(96.8 |
) |
|
|
(34.5 |
) |
|
Net income (loss) attributable to common shareholders |
$ |
100.6 |
|
|
$ |
617.6 |
|
|
$ |
(35.6 |
) |
|
$ |
775.9 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings (loss) per common share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
2.32 |
|
|
$ |
13.94 |
|
|
$ |
(0.81 |
) |
|
$ |
17.28 |
|
|
Diluted |
$ |
2.30 |
|
|
$ |
11.75 |
|
|
$ |
(0.81 |
) |
|
$ |
15.01 |
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
43.4 |
|
|
|
44.3 |
|
|
|
44.1 |
|
|
|
44.9 |
|
|
Diluted |
|
43.8 |
|
|
|
53.3 |
|
|
|
44.1 |
|
|
|
54.0 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Dividends declared per common share |
$ |
0.29 |
|
|
$ |
0.23 |
|
|
$ |
1.16 |
|
|
$ |
0.92 |
|
Contacts
Investors:
Rob Ballew
Senior Vice President, Investor Relations
[email protected]
or
[email protected]
Media:
Colleen Rooney
Chief Communications & ESG Officer
+1-330-668-5932
[email protected]
