SIGNET JEWELERS LTD

Previous wording

This management's discussion and analysis provides comparisons of material changes in the condensed consolidated financial statements for the 13 and 26 weeks ended August 3, 2024 and July 29, 2023.

Current wording

This management's discussion and analysis provides comparisons of material changes in the condensed consolidated financial statements for the 13 and 39 weeks ended November 2, 2024 and October 28, 2023.

Previous wording

This Quarterly Report on Form 10-Q contains statements which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements arebased 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 "expects," "intends," "anticipates," "estimates," "predicts," "believes," "should," "potential," "may," "preliminary," "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 which could cause the actual results to not be realized, including, but not limited to: difficulty or delay in executing or integrating an acquisition, including Diamonds Direct and Blue Nile; executing other major business or strategic initiatives, such as expansion of the services business or realizing the benefits of our restructuring plans; the impact of the Israel-Hamas conflict 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, including without limitation risks relating to shifts in consumer spending away from the jewelry category, trends toward more experiential purchases such as travel, disruptions in the dating cycle caused by the COVID-19 pandemic and the pace at which such impacts on engagements are expected to recover, and the Company’s ability to capture market share of the bridal category upon the recovery of engagements; 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; our ability to optimize our transformation strategies; 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 in…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q contains statements which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements arebased 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 "expects," "intends," "anticipates," "estimates," "predicts," "believes," "should," "potential," "may," "preliminary," "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 which could cause the actual results to not be realized, including, but not limited to: executing major business or strategic initiatives, such as expansion of the services business, realizing the benefits of our restructuring plans or new transformation strategies that the Company may develop in the future; difficulty or delay in executing or integrating an acquisition; the impact of the Israel-Hamas conflict 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, including without limitation risks relating to shifts in consumer spending away from the jewelry category, trends toward more experiential purchases such as travel, the pace at which engagements are expected to recover from the disruption in the dating cycle on engagements caused by COVID-19, and the Company’s ability to capture market share of the bridal category upon the recovery of engagements; 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; our ability to optimize our transformation strategies; 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 …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Signet Jewelers Limited (“Signet” or the “Company”) is the world’s largest retailer of diamond jewelry. Signet is incorporated in Bermuda. The Company operated 2,668 retail locations as of August 3, 2024, which when combined with the Company’s digital capabilities under its Connected Commerce strategy, provides customers the opportunity to use both online and in-store experiences as part of their shopping journey. Signet manages its business by geography, a description of which follows:

Current wording

Signet Jewelers Limited (“Signet” or the “Company”) is the world’s largest retailer of diamond jewelry. Signet is incorporated in Bermuda. The Company operated 2,655 retail locations as of November 2, 2024, which when combined with the Company’s digital capabilities under its Connected Commerce strategy, provides customers the opportunity to use both online and in-store experiences as part of their shopping journey. Signet manages its business by geography, a description of which follows:

Previous wording

•The North America reportable segment operates nine banners, with the majority operating through both online and brick and mortar retail operations. The segment had 2,310 locations in the US and 91 locations in Canada as of August 3, 2024.

Current wording

•The North America reportable segment operates nine banners, with the majority operating through both online and brick and mortar retail operations. The segment had 2,298 locations in the US and 91 locations in Canada as of November 2, 2024.

Previous wording

◦In the US, the segment operates under the following banners: Kay (Kay Jewelers and Kay Outlet); Zales (Zales Jewelers and Zales Outlet); Jared (Jared The Galleria Of Jewelry and Jared Vault); Banter by Piercing Pagoda; Diamonds Direct; Rocksbox; and digital banners, James Allen and Blue Nile.

Current wording

◦In the US, the segment operates under the following banners: Kay (Kay Jewelers and Kay Outlet); Zales (Zales Jewelers and Zales Outlet); Jared (Jared Jewelers and Jared Vault); Banter by Piercing Pagoda; Diamonds Direct; Rocksbox; and digital banners, James Allen and Blue Nile.

Previous wording

•The International reportable segment had 267 locations in the UK, Republic of Ireland and Channel Islands as of August 3, 2024, and maintains an online retail presence for its principal banners, H. Samuel and Ernest Jones.

Current wording

•The International reportable segment had 266 locations in the UK and Republic of Ireland as of November 2, 2024, and maintains an online retail presence for its principal banners, H. Samuel and Ernest Jones.

Previous wording

Signet’s sales decreased by 7.6% during the second quarter of Fiscal 2025 compared to the same period in Fiscal 2024. During the second quarter, the Company saw positive factors in sales driven by new fashion assortments, sequential improvements in engagement trends and overall same store sales and continued strong performance in services. However, these favorable impacts were more than offset by competitive pricing pressure, store closures and the UK watch divestiture, timing of the 53rd week from Fiscal 2024 which shifted some early Mother’s Day shopping into the first quarter, a slower than expected engagement recovery and continued macroeconomic impacts on consumer spending. The second quarter was also unfavorably impacted by the continued integration challenges at the digital banners which began in the second half of Fiscal 2024. During the second quarter of Fiscal 2025, the

Current wording

Signet’s sales decreased by 3.1% during the third quarter of Fiscal 2025 compared to the same period in Fiscal 2024. During the third quarter, the Company saw positive factors in sales driven by new fashion assortments, sequential improvements in overall same store sales, moderate bridal improvement in our core banners and continued strong performance in services. However, these favorable impacts were more than offset by store closures and the prestige watch business divestiture in the UK, the impacts of the hurricanes in the southern US, a slower than expected engagement recovery, continued uncertainties in consumer spending patterns, and competitive pricing pressure. The third quarter was also unfavorably impacted by the integration and re-platforming challenges that persist at the digital banners which began in the second half of Fiscal 2024. During the third quarter of Fiscal 2025, the Company’s average merchandise transaction values (“ATV”) were flat in the North America reportable segment and decreased by 13.4% in the International reportable segment. The ATV in North America was bolstered by the newness in Signet’s product assortment, particularly in fashion, which was able to offset the impacts of competitive pricing pressure noted above, particularly in bridal. Same store sales in the International reportable segment were up 1.6% in the third quarter; however, overall reported sales and ATV were down year over year due to unfavorable impact of the previously disclosed divestiture of the UK prestige watch business in the fourth quarter of Fiscal 2024, which carried products at high price points.

Previous wording

Refer to the “Results of Operations” section below for further information on performance during the second quarter of Fiscal 2025.

Current wording

Refer to the “Results of Operations” section below for further information on performance during the third quarter of Fiscal 2025.

Previous wording

The Company will continue strategic investments that differentiate Signet from its competitors, in particular investments in its banner value propositions, its services business, the newness of its product offerings, personalization of marketing, and its digital and data analytics capabilities. Furthermore, the Company will maintain its diligent and effective efforts to drive cost savings and leverage its flexible operating model, scale and fleet optimization. As part of its efforts to focus on its strategic business in the UK, the Company completed the divestiture of the Company’s UK prestige watch business during the fourth quarter of Fiscal 2024 and closed 20 stores to date in Fiscal 2025, primarily at the Ernest Jones banner. These actions, as well as further streamlining overhead in the UK support center, are aimed at improving profitability in this segment, with margins in line with the rest of the business within the next three years.

Current wording

The Company plans to continue strategic investments that differentiate Signet from its competitors, in particular investments in its banner value propositions, including the renovation of its fleet, its services business, increase the flow of newness of its product offerings, and personalized marketing. Furthermore, the Company will maintain its diligent and effective efforts to drive cost savings and leverage its flexible operating model, scale and fleet optimization. As part of its efforts to focus on its strategic business in the UK, the Company completed the divestiture of the Company’s UK prestige watch business during the fourth quarter of Fiscal 2024 and closed 21 stores to date in Fiscal 2025, primarily at the Ernest Jones banner. These actions, as well as further streamlining overhead in the UK support center, are aimed at improving profitability in this segment, with margins in line with the rest of the business within the next three years.

Previous wording

The Company continues to monitor the impacts of certain macroeconomic factors on its business, such as inflation and the Russia-Ukraine and Israel-Hamas conflicts. Signet operates quality control and technology centers in Israel, and to date, these operations have not been materially impacted by the geopolitical conflict in the Middle East. While the Company currently does not expect disruptions to its operations in Israel to have a material impact on the Company’s results of operations, the Company will continue to closely monitor this conflict and any impacts on its business, as well as its team members in Israel. Uncertainties exist that could impact the Company’s results of operations or cash flows in the future, such as competitive pricing pressure, including on lab-created diamonds, continued inflationary impacts to the Company (including, but not limited to, materials, labor, fulfillment and advertising costs) or adverse shifts in consumer discretionary spending, slower than anticipated recovery of engagements, deterioration of consumer credit, supply chain disruptions to the Company’s business, the Company’s ability to recruit and retain qualified team members, or organized retail crime and its impact to mall traffic. See “Forward-Looking Statements” above as well as the “Risk Factors” included in Item 1A of Signet’s Fiscal 2024 Annual Report on Form 10-K.

Current wording

The Company continues to monitor the impacts of certain macroeconomic factors on its business, such as inflation and the Russia-Ukraine and Israel-Hamas conflicts. Signet operates quality control and technology centers in Israel, and to date, these operations have not been impacted by the geopolitical conflict in the Middle East. While the Company currently does not expect disruptions to its operations in Israel to have a material impact on the Company’s results of operations, the Company will continue to closely monitor this conflict and any impacts on its business, as well as its team members in Israel. Uncertainties exist that could impact the Company’s results of operations or cash flows in the future, such as competitive pricing pressure, including lab-created diamonds, continued inflationary impacts to the Company (including, but not limited to, materials, labor, fulfillment and advertising costs) or adverse shifts in consumer discretionary spending, slower than anticipated recovery of engagements, deterioration of consumer credit, supply chain disruptions to the Company’s business, the Company’s ability to recruit and retain qualified team members, or organized retail crime and its impact to mall traffic. In addition, the Company will monitor potential impacts of changes to regulations, taxes and tariffs as a result of the incoming US administration. See “Forward-Looking Statements” above as well as the “Risk Factors” included in Item 1A of Signet’s Fiscal 2024 Annual Report on Form 10-K.

Previous wording

Comparison of Second Quarter Fiscal 2025 to Second Quarter Fiscal 2024

Current wording

Comparison of Third Quarter Fiscal 2025 to Third Quarter Fiscal 2024

Previous wording

Signet's total sales decreased 7.6% year over year to $1.49 billion in the 13 weeks ended August 3, 2024. Same store sales decreased 3.4%, compared to a decrease of 12.0% in the prior year quarter. These decreases were the result of competitive pricing pressure, a slower than expected engagement recovery, timing of the 53rd week in Fiscal 2024 shifting some Mother’s Day sales into first quarter, the impacts of store closures, and the continued macroeconomic impacts on consumer spending. These decreases were partially offset by higher ATV in the second quarter in the North America segment led by growth in fashion.

Current wording

Signet's total sales decreased 3.1% year over year to $1.35 billion in the 13 weeks ended November 2, 2024. Same store sales decreased 0.7%, compared to a decrease of 11.8% in the prior year quarter. These decreases were the result of decreased traffic and operational challenges at the digital banners, the impact of the hurricanes in the Southern US and the slower than expected engagement recovery, which were partially offset by growth in fashion and new merchandise. Additionally, the decrease in total reported sales was also impacted by store closures and divestiture of the prestige watch business in the UK year over year.

Previous wording

eCommerce sales in the second quarter of Fiscal 2025 were $332.3 million, down $33.2 million or 9.1%, compared to $365.5 million in the prior year second quarter, driven by the decline in the bridal category, including the impact of the continued operational issues in the digital banners. eCommerce sales accounted for 22.3% of second quarter sales, down from 22.7% of total sales in the prior year second quarter. Brick and mortar same store sales decreased 2.9% from the prior year second quarter.

Current wording

eCommerce sales in the third quarter of Fiscal 2025 were $289.2 million, down $11.7 million or 3.9%, compared to $300.9 million in the prior year third quarter, primarily due to challenges in the digital banners noted above. eCommerce sales accounted for 21.4% of third quarter sales, relatively flat compared to 21.6% of total sales in the prior year third quarter. Brick and mortar same store sales were flat from the prior year third quarter.

Previous wording

The breakdown of the second quarter sales performance by reportable segment is set out in the table below:

Current wording

The breakdown of the third quarter sales performance by reportable segment is set out in the table below:

Previous wording

ATV is an operating metric defined as net merchandise sales divided by the total number of customer transactions. The ATV is measured each period based on the reported sales for the corresponding period presented.

Current wording

ATV is an operating metric defined as net merchandise sales divided by the total number of customer transactions. The ATV is measured each period based on the reported merchandise sales for the corresponding period presented.

Previous wording

The North America reportable segment’s total sales were $1.40 billion compared to $1.50 billion in the prior year quarter, or a decrease of 6.9%. This decrease was the result of competitive pricing pressure, a slower than expected engagement recovery, timing of the 53rd week in Fiscal 2024 shifting some Mother’s Day sales into first quarter, and the continued macroeconomic impacts on consumer spending. These decreases were partially offset by higher ATV in the second quarter and by the Company’s strategic product assortment which drove growth in fashion during the quarter. Same store sales decreased 3.7% compared to a decrease of 12.2% in the prior year quarter primarily due to the decline in the number of transactions by 8.8% year over year, offset by the higher ATV noted above.

Current wording

The North America reportable segment’s total sales were $1.26 billion compared to $1.29 billion in the prior year quarter, or a decrease of 2.3%. This decrease was the result of a slower than expected engagement recovery, operational challenges and decreased traffic at the digital banners, the impact of the hurricanes in the Southern US, and the continued uncertainties in consumer spending. These decreases were partially offset by the Company’s higher penetration of new merchandise which drove growth in fashion during the quarter. Same store sales decreased 0.8% compared to a decrease of 12.3% in the prior year quarter due to the decline in the number of transactions by 2.1% year over year.

Previous wording

The International reportable segment’s total sales decreased 15.2% to $86.5 million compared to $102.0 million in the prior year quarter, primarily due to the divestiture of the prestige watch business in the fourth quarter of Fiscal 2024, as well as the impact of store closures. Total sales at constant exchange rates decreased 15.8%. The number of transactions decreased 3.6% and ATV decreased 13.4% year over year.

Current wording

The International reportable segment’s total sales decreased 11.4%, or 15.5% at constant exchange rates, to $83.3 million compared to $94.0 million in the prior year quarter, primarily due to the divestiture of the prestige watch business in the fourth quarter of Fiscal 2024, as well as the impact of store closures. The number of transactions decreased 3.2% and ATV decreased 13.4% year over year. Same store sales increased 1.6% compared to a decrease of 4.6% in the prior year quarter.

Previous wording

Signet’s total sales decreased 8.5% to $3.00 billion compared to $3.28 billion in the prior year. Signet’s same store sales decreased 6.2%, compared to a decrease of 13.0% in the prior year. As further described above, these declines were driven primarily by competitive pricing pressure, a slower than expected engagement recovery, and continued pressure on consumer discretionary spending.

Current wording

Signet’s total sales decreased 6.9% to $4.35 billion compared to $4.67 billion in the prior year. Signet’s same store sales decreased 4.6%, compared to a decrease of 12.6% in the prior year. As further described above, these declines were driven primarily by a slower than expected engagement recovery, store closures and the prestige watch divestiture in the UK, operational challenges at the digital banners, and the impact of the macro environment on consumer spending, particularly earlier in the year.

Previous wording

eCommerce sales year to date were $670.2 million, down $75.9 million or 10.2%, compared to $746.1 million in the prior year. eCommerce sales accounted for 22.3% of year to date sales, down from 22.7% of total sales in the prior year. Brick and mortar same store sales decreased 5.3% from the prior period. The decrease in eCommerce sales as of percentage of sales is primarily driven by the decline in the bridal category, including the unfavorable impact from continued operational issues in the digital banners.

Current wording

eCommerce sales year to date were $959.4 million, down $87.6 million or 8.4%, compared to $1.05 billion in the prior year. eCommerce sales accounted for 22.0% of year to date sales, down slightly from 22.4% of total sales in the prior year. The decrease in total eCommerce sales was driven by the challenges in the digital banners noted above. Brick and mortar same store sales decreased 3.7% from the prior period.

Previous wording

The North America reportable segment’s total sales were $2.82 billion compared to $3.06 billion in the prior year, down 8.0%. This decrease was primarily driven by the impact of heightened inflationary pressure on consumers’ discretionary spending and the decline in the bridal category, driven by lower engagements. Same store sales decreased 6.6% compared to a decrease of 13.3% in the prior year. North America’s ATV remained relatively flat when compared with the prior year, while the number of transactions decreased 8.3%.

Current wording

The North America reportable segment’s total sales were $4.08 billion compared to $4.35 billion in the prior year, down 6.3%. This decrease was primarily driven by the impact of the macro environment on consumer spending, operational challenges at the digital banners, and the decline in the bridal category, driven by the slower than expected engagement recovery. Same store sales decreased 4.9% compared to a decrease of 13.0% in the prior year. North America’s ATV remained flat when compared with the prior year, while the number of transactions decreased 6.4%.

Previous wording

The International reportable segment’s total sales decreased 16.1% to $163.7 million compared to $195.0 million in the prior year, primarily due to the impact of the divestiture of the prestige watch business in the fourth quarter of Fiscal 2024 and the impact of store closures. Total sales at constant exchange rates decreased 17.6%. The number of transactions decreased 4.7% and ATV decreased 14.4% over prior year. The decline in ATV was driven by the divestiture of the prestige watch business, which carried products at high price points.

Current wording

The International reportable segment’s total sales decreased 14.5% to $247.0 million compared to $289.0 million in the prior year, primarily due to the impact of the divestiture of the prestige watch business in the fourth quarter of Fiscal 2024 and the impact of store closures. Total sales at constant exchange rates decreased 16.9%. The number of transactions decreased 4.2% and ATV decreased 13.9% over prior year. The decline in ATV was driven by the divestiture of the prestige watch business, which carried products at high price points.

Previous wording

In the second quarter of Fiscal 2025, gross margin was $566.3 million or 38.0% of sales compared to $610.8 million or 37.9% of sales in the prior year comparable period. In the first half of Fiscal 2025, gross margin was $1.1 billion or 37.9% of sales compared to $1.2 billion or 37.9% of sales in the prior year comparable period. The Company maintained relatively flat gross margins for both the 13 and 26 weeks ended August 3, 2024 reflecting a more than 100 basis points improvement in merchandise margins, led by growth in services, product newness and higher fashion penetration, which nearly offset the deleveraging of fixed costs on lower sales volume.

Current wording

In the third quarter of Fiscal 2025, gross margin was $485.3 million or 36.0% of sales compared to $501.3 million or 36.0% of sales in the prior year quarter. For the 39 weeks ended November 2, 2024, gross margin was $1.62 billion or 37.3% of sales compared to $1.74 billion or 37.3% of sales in the prior year comparable period. The Company maintained flat gross margins for both the 13 and 39 weeks ended November 2, 2024 reflecting growth in services, product newness and higher fashion penetration, which offset the deleveraging of fixed costs on lower sales volume.

Previous wording

In the second quarter of Fiscal 2025, SG&A was $498.4 million or 33.4% of sales compared to $511.2 million or 31.7% of sales in the prior year quarter. In the first half of Fiscal 2025, SG&A was$1.01 billion or 33.8% of sales compared to $1.04 billion or 31.7% of sales in the prior year comparable period. The increase in SG&A as a percentage of sales for both the 13 and 26 weeks ended August 3, 2024 was driven by higher advertising expense and deleverage of fixed costs, primarily the fixed portion of labor.

Current wording

In the third quarter of Fiscal 2025, SG&A was $469.6 million or 34.8% of sales compared to $484.2 million or 34.8% of sales in the prior year quarter. For the 39 weeks ended November 2, 2024, SG&A was$1.48 billion or 34.1% of sales compared to $1.53 billion or 32.6% of sales in the prior year comparable period. The increase in SG&A as a percentage of sales for both the 13 and 39 weeks ended November 2, 2024 was driven by higher advertising expense and deleverage of fixed costs, primarily the fixed portion of labor. In addition, the third quarter of Fiscal 2025 included approximately $2.0 million of leadership transition costs.

Previous wording

For the 13 and 26 weeks ended August 3, 2024, the Company recorded non-cash, pre-tax impairment charges of $166.2 million and $168.6 million, respectively, compared to charges of $3.8 million and $5.6 million in the 13 and 26 weeks ended July 29, 2023, respectively. In the first half of Fiscal 2025, $166.0 million of the charges related to impairment of goodwill and indefinite-lived trade names for Diamonds Direct and the Digital Banners, and $2.6 million related to the impairment of long-lived assets. In the first half of 2024, all charges were related to the impairment of long-lived assets. See Note 12 and Note 18 for additional information.

Current wording

For the 13 and 39 weeks ended November 2, 2024, the Company recorded pre-tax impairment charges of $0.7 million and $169.3 million, respectively, compared to charges of $0.1 million and $5.7 million in the 13 and 39 weeks ended October 28, 2023, respectively. For the 13 weeks ended November 2, 2024, asset impairments were related to the impairment of long-lived assets. For the 39 weeks ended November 2, 2024, $166.0 million of the charges related to impairment of goodwill and indefinite-lived trade names for Diamonds Direct and the Digital Banners, and $3.3 million related to the impairment of long-lived assets. For the 13 and 39 weeks ended October 28, 2023, all charges were related to impairment of long-lived assets. See Note 12 and Note 18 for additional information.

Previous wording

In the second quarter of Fiscal 2025, other operating expense was $2.6 million, compared to $5.6 million in the prior year quarter. In the first half of Fiscal 2025, other operating expensewas$7.4 million compared to $3.7 million in the prior year comparable period. The 13 and 26 weeks ended August 3, 2024 primarily included restructuring charges of $1.2 million and $5.8 million, respectively, and foreign exchange losses of $0.5 million and $1.2 million, respectively. The 13 and 26 weeks ended July 29, 2023 primarily included restructuring charges of $4.2 million and foreign exchange rate losses of $1.2 million and $1.8 million, respectively, partially offset by a credit to income of $3.0 million related to an adjustment of a prior litigation accrual. See Note 17, Note 18 and Note 20 for additional information.

Current wording

In the third quarter of Fiscal 2025, other operating expense was $5.8 million, compared to $3.7 million in the prior year quarter. For the 39 weeks ended November 2, 2024, other operating expensewas$13.2 million compared to $7.4 million in the prior year comparable period. The 13 and 39 weeks ended November 2, 2024 primarily included restructuring and related charges of $5.2 million and $11.0 million, respectively, and foreign exchange losses of $0.2 million and $1.4 million, respectively. The 13 and 39 weeks ended October 28, 2023 primarily included restructuring charges of $1.6 million and $5.8 million, respectively, and foreign exchange losses of $0.7 million and $2.5 million, respectively, partially offset by a credit to income of $3.0 million related to an adjustment of a prior litigation accrual. See Note 17, Note 18, and Note 20 for additional information.

Previous wording

For the second quarter of Fiscal 2025, operating loss was $100.9 million or (6.8)% of sales, compared to operating income of $90.2 million or 5.6% of sales in the prior year quarter. In the first half of Fiscal 2025, operating loss was $51.1 million or (1.7)% of sales compared to $191.9 million or 5.8% of sales in the prior year comparable period. The decrease in operating income both the 13 and 26 weeks ended August 3, 2024 was primarily driven by the impact of goodwill and indefinite-lived intangible impairment charges, lower sales volume and higher advertising expense noted above, partially offset by improved merchandise margins and cost savings initiatives.

Current wording

For the third quarter of Fiscal 2025, operating income was $9.2 million or 0.7% of sales, compared to operating income of $13.3 million or 1.0% of sales in the prior year quarter. For the 39 weeks ended November 2, 2024, operating loss was $41.9 million or (1.0)% of sales compared to $205.2 million or 4.4% of sales in the prior year comparable period. The decrease in operating income for the 13 weeks ended November 2, 2024 was primarily driven by lower sales volume and higher advertising expense noted above. The decrease in operating income for the 39 weeks ended November 2, 2024 was primarily driven by the impact of goodwill and indefinite-lived intangible impairment charges, lower sales volume and higher advertising expense noted above, partially offset by cost savings initiatives.

Previous wording

Signet’s operating (loss) income by reportable segment for the second quarter is as follows:

Current wording

Signet’s operating income (loss) by reportable segment for the third quarter is as follows:

Previous wording

Signet’s operating (loss) income by reportable segment for the year to date period is as follows:

Current wording

Signet’s operating income (loss) by reportable segment for the year to date period is as follows:

Previous wording

(1) Operating (loss) income during the 13 and 26 weeks ended August 3, 2024 includes $166.2 million and $168.2 million, respectively, of asset impairment charges primarily related to goodwill and indefinite-lived intangible assets; $0.9 million and $1.1 million, respectively, of integration-related expenses, primarily severance and retention, incurred for the integration of Blue Nile; and $0.2 million and $0.8 million, respectively, of restructuring charges.

Current wording

(1) Operating income during the 13 and 39 weeks ended November 2, 2024 includes $0.8 million and $169.0 million, respectively, of asset impairment charges primarily related to goodwill and indefinite-lived intangible assets recognized in the second quarter; and $5.4 million and $6.2 million, respectively, of restructuring and related charges. Operating income during the 39 weeks ended November 2, 2024 includes $1.1 million of integration-related expenses, primarily severance and retention, incurred for the integration of Blue Nile.

Previous wording

Operating income during the 13 and 26 weeks ended July 29, 2023 includes $4.8 million and $12.6 million, respectively, of acquisition and integration-related expenses, primarily severance and retention, and exit and disposal costs, and system decommissioning costs incurred for the integration of Blue Nile; $3.8 million and $5.6 million, respectively, of net asset impairment charges; and $4.2 million of restructuring charges. Operating income during the 26 weeks ended July 29, 2023 includes a $3.0 million credit to income related to the adjustment of a prior litigation accrual.

Current wording

Operating income during the 13 and 39 weeks ended October 28, 2023 includes $7.5 million and $20.1 million, respectively, of integration-related expenses, primarily severance and retention, and exit and disposal costs, and system decommissioning costs incurred for the integration of Blue Nile; and $0.2 million and $4.4 million, respectively, of restructuring charges. Operating income during the 39 weeks ended October 28, 2023 includes a $3.0 million credit to income related to the adjustment of a prior litigation accrual and $5.6 million of net asset impairment charges primarily related to restructuring and integration.

Previous wording

(2)Operating loss during the 13 and 26 weeks ended August 3, 2024 includes $1.0 million and $5.0 million, respectively, of restructuring charges and $1.2 million and $2.5 million, respectively, of net losses from the previously announced divestiture of the UK prestige watch business. Operating loss during the 26 weeks ended August 3, 2024 includes $0.4 million of net asset impairment charges primarily related to planned store closures.

Current wording

(2)Operating loss during the 13 and 39 weeks ended November 2, 2024 includes $0.4 million and $5.4 million, respectively, of restructuring charges. Operating loss during the 39 weeks ended November 2, 2024 includes $2.5 million of net losses from the previously announced divestiture of the UK prestige watch business and $0.3 million of net asset impairment charges primarily related to planned store closures.

Previous wording

For the 13 and 26 weeks ended August 3, 2024, net interest income was $2.4 million and $11.0 million, respectively, compared to net interest income of $1.8 million and $7.4 million in the 13 and 26 weeks ended July 29, 2023, respectively. The increase in net interest income recognized in the 13 weeks ended August 3, 2024 compared to the prior year comparable period was the result of lower interest expense incurred as a result of the repayment of the Senior Notes in the second quarter. The increase in net interest income recognized in the 26 weeks ended August 3, 2024 compared to the prior year comparable period was due to higher invested cash balances compared to the prior year period, higher interest rates and lower interest expense incurred as a result of the repayment of the Senior Notes as previously noted.

Current wording

For the 13 and 39 weeks ended November 2, 2024, net interest expense was $1.0 million and net interest income was $10.0 million, respectively, compared to net interest income of $2.6 million and $10.0 million in the 13 and 39 weeks ended October 28, 2023, respectively. The change in the 13 weeks ended November 2, 2024 compared to the prior year comparable period was the result of lower cash balances earning interest due to the redemptions of Preferred Shares, repayment of the Senior Notes and share repurchases, as well as interest expense incurred from borrowings on the ABL. Net interest income remained flat in the 39 weeks ended November 2, 2024 compared to the prior year comparable period due to higher invested cash balances in the beginning of the current year period compared to the prior year period, higher interest rates and lower interest expense incurred as a result of the repayment of the Senior Notes as previously noted, offsetting interest expense incurred on borrowings on the ABL.

Previous wording

In the second quarter of Fiscal 2025, income tax expense was $1.6 million, with an effective tax rate (“ETR”) of (1.7)%, compared to income tax expense of $17.2 million, with an ETR of 18.6%, in the prior year comparable period. The ETR for the second quarter of Fiscal 2025 was primarily impacted by the discrete impairment charges of$166 million, of which $123 million relates to non-deductible goodwill. The Fiscal 2024 ETR was lower than the US federal income tax rate, primarily due to the favorable impacts of foreign rate differences and benefits from global reinsurance arrangements.

Current wording

In the third quarter of Fiscal 2025, income tax expense was $1.4 million, with an effective tax rate (“ETR”) of 16.7%, compared to income tax expense of $1.9 million, with an ETR of 14.0%, in the prior year comparable period. The ETRs for the third quarter of

Previous wording

In the year to date period of Fiscal 2025, income tax expense was$8.1 million, with an ETR of (21.1)%, compared to income tax expense of $26.7 million, with an ETR of 13.4% in the prior year comparable period. The ETR for the 26 weeks ended August 3, 2024 was lower than the US federal income tax rate, primarily due to the favorable impact of foreign rate differences and benefits from global reinsurance arrangements, as well as discrete tax impacts during Fiscal 2025, including the non-deductible impairment charges described above and the excess tax benefit for share-based compensation which vested during the year of $5.0 million. The year to date ETR in the prior year comparable period was lower than the US federal income tax rate primarily due to the discrete tax benefits related to thereclassification of the remaining pension settlement loss out of AOCI of $4.1 million and the excess tax benefit for share-based compensation which vested during the year of $7.7 million.

Current wording

The ETR for the 39 weeks ended November 2, 2024 was different than the US federal income tax rate, primarily due to the favorable impact of foreign rate differences and benefits from global reinsurance arrangements, as well as discrete tax impacts during Fiscal 2025, including the non-deductible impairment charges described above and the excess tax benefit for share-based compensation which vested during the year of $5.0 million. The year to date ETR in the prior year comparable period was lower than the US federal income tax rate primarily due to the favorable impact of foreign rate differences and benefits from global reinsurance arrangements, as well as the discrete tax benefits recognized through the third quarter of Fiscal 2024. The Fiscal 2024 discrete tax benefits relate to thereclassification of the remaining pension settlement loss out of AOCI of $4.1 million and the excess tax benefit for share-based compensation which vested during the year of $9.4 million.

Previous wording

Net cash is a non-GAAP measure defined as the total of cash and cash equivalents less debt. Management considers this metric to be helpful to understand the total indebtedness of the Company after consideration of cash balances on-hand.

Current wording

Net (debt) cash is a non-GAAP measure defined as the total of cash and cash equivalents less debt. Management considers this metric to be helpful to understand the total indebtedness of the Company after consideration of cash balances on-hand.

Previous wording

Free cash flow is a non-GAAP measure defined as the net cash provided by (used in) operating activities less purchases of property, plant and equipment. Management considers this metric to be helpful in understanding how the business is generating cash from its operating and investing activities that can be used to meet the financing needs of the business. Free cash flow is an indicator frequently used by management to evaluate its overall liquidity needs and determine appropriate capital allocation strategies. Free cash flow does not represent the residual cash flow available for discretionary purposes.

Current wording

Free cash flow is a non-GAAP measure defined as the net cash (used in) provided by operating activities less purchases of property, plant and equipment. Management considers this metric to be helpful in understanding how the business is generating cash from its operating and investing activities that can be used to meet the financing needs of the business. Free cash flow is an indicator frequently used by management to evaluate its overall liquidity needs and determine appropriate capital allocation strategies. Free cash flow does not represent the residual cash flow available for discretionary purposes.

Previous wording

(6) As described in Note 5, the Company recorded a deemed dividend to net (loss) income attributable to common shareholders of $85.1 million in the first quarter of Fiscal 2025, which represents the excess of the conversion value of the Preferred Shares over their carrying value upon redemption, and includes $1.5 million of related expenses.

Current wording

(7) As described in Note 5, the Company recorded a deemed dividend to net income (loss) attributable to common shareholders of $85.2 million in of Fiscal 2025, which represents the excess of the conversion value of the Preferred Shares over their carrying value upon redemption and includes $1.6 million of related expenses.

Previous wording

(7) Adjusted diluted EPS for the 13 and 26 weeks ended August 3, 2024 was calculated using 44.9 million and 47.9 million diluted weighted average common shares outstanding, respectively. The additional dilutive shares were excluded from the calculation of GAAP diluted EPS as their effect was antidilutive. Refer to Note 7 for additional information.

Current wording

(8) Adjusted diluted EPS for the 39 weeks ended November 2, 2024 was calculated using 45.9 million diluted weighted average common shares outstanding. The additional dilutive shares were excluded from the calculation of GAAP diluted EPS as their effect was antidilutive. Refer to Note 7 for additional information.

Previous wording

The Company’s primary sources of liquidity are cash on hand, cash provided by operations and availability under its senior secured asset-based revolving credit facility (the “ABL”). As of August 3, 2024, the Company had $403.1 million of cash and cash equivalents and no outstanding borrowings on the ABL. The available borrowing capacity on the ABL was $1.2 billion as of August 3, 2024.

Current wording

The Company’s primary sources of liquidity are cash on hand, cash provided by operations and availability under its senior secured asset-based revolving credit facility (the “ABL”). As of November 2, 2024, the Company had $157.7 million of cash and cash equivalents and $253.0 million of outstanding borrowings on the ABL. The available borrowing capacity on the ABL was $929 million as of November 2, 2024.

Previous wording

The Company has a disciplined approach to capital allocation, utilizing the following capital priorities: 1) invest in its business to drive growth through both organic investments and acquisitions; 2) optimize its capital structure and maintain an adjusted leverage ratio (a non-GAAP measure as defined in Item 7 of the Signet’s Fiscal 2024 Annual Report on Form 10-K) of at or below 2.5x; and 3) return cash to shareholders through share repurchases and dividends.

Current wording

The Company has a disciplined approach to capital allocation, utilizing the following capital priorities: 1) drive growth through both organic investments and acquisitions; 2) optimize its capital structure and maintain an adjusted leverage ratio (a non-GAAP measure as defined in Item 7 of the Signet’s Fiscal 2024 Annual Report on Form 10-K) of at or below 2.5x; and 3) return cash to shareholders through share repurchases and dividends.