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 weeks ended May 3, 2025 and May 4, 2024.

Current 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 2, 2025 and August 3, 2024.

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 "guidance," "expects," "continue," "intends," "anticipates," "enhance," "estimates," "predicts," "believes," "should," "potential," "may," "preliminary," "forecast," "objective," "opportunity," "plan," "strategy," "target," or “will” 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; attracting and retaining key executive talent during periods of leadership transition, such as our recent appointment of a new CEO and other recent changes in senior leadership from the reorganization under our Grow Brand Love strategy; the failure to adequately mitigate 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; 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 m…

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 "guidance," "expects," "continue," "intends," "anticipates," "enhance," "estimates," "predicts," "believes," "should," "potential," "may," "preliminary," "forecast," "objective," "opportunity," "plan," "strategy," "target," or “will” 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; attracting and retaining key executive talent during periods of leadership transition, such as our recent appointment of a new CEO and other recent changes in senior leadership from the reorganization under our Grow Brand Love strategy; the failure to adequately mitigate 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; 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 m…

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 and is incorporated in Bermuda. The Company operated 2,633 retail locations as of May 3, 2025, 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 and is incorporated in Bermuda. The Company operated 2,623 retail locations as of August 2, 2025, 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 brands, with the majority operating through both online and brick and mortar retail operations. The segment had 2,280 locations in the US and 91 locations in Canada as of May 3, 2025.

Current wording

•The North America reportable segment operates nine brands, with the majority operating through both online and brick and mortar retail operations. The segment had 2,273 locations in the US and 91 locations in Canada as of August 2, 2025.

Previous wording

•The International reportable segment had 262 locations in the UK and Republic of Ireland as of May 3, 2025, and maintains an online retail presence for its principal brands, H.Samuel and Ernest Jones.

Current wording

•The International reportable segment had 259 locations in the UK and Republic of Ireland as of August 2, 2025, and maintains an online retail presence for its principal brands, H.Samuel and Ernest Jones.

Previous wording

In Fiscal 2026, the Company launched its Grow Brand Love strategy. This transformative strategy focuses on driving sustainable growth and builds on a strong core foundation to create shareholder value. In addition, this strategy emphasizes style and product innovation, captivating experiences, and brand loyalty while harnessing centralized core capabilities. The Company has identified three strategic imperatives as part of the Grow Brand Love framework: shifting from banners to brand mindset; growing our core business and expanding into adjacent categories; and organizational realignment to accelerate strategy execution. The Grow Brand Love strategy is further described in the Purpose and Strategy section within Item 1 of Signet’s Fiscal 2025 Annual Report on Form 10-K filed with the SEC on March 19, 2025.

Current wording

In Fiscal 2026, the Company launched its Grow Brand Love strategy. This transformative strategy focuses on driving sustainable growth and builds on a strong core foundation to create shareholder value. In addition, this strategy emphasizes style and product innovation, captivating experiences, and brand loyalty while harnessing centralized core capabilities. The Company has identified three strategic imperatives as part of the Grow Brand Love framework: shifting from a banners to brand mindset; growing our core business and expanding into adjacent categories; and organizational realignment to accelerate strategy execution. The Grow Brand Love strategy is further described in the Purpose and Strategy section within Item 1 of Signet’s Fiscal 2025 Annual Report on Form 10-K filed with the SEC on March 19, 2025.

Previous wording

Signet’s sales increased by 2.0% during the first quarter of Fiscal 2026 compared to the same period in Fiscal 2025. During the first quarter, the Company saw positive same stores sales growth of 2.5% driven by increased merchandise average unit retail (“AUR”) in both bridal and fashion, unit growth in engagements, closing gaps in key price points and expanding our assortment. This overall year over year improvement was softened by an approximate 140 basis point drag from underperformance in the James Allen brand in the first quarter. During the first quarter of Fiscal 2026, AUR increased by 8.9% in the North America reportable segment and 2.8% in the International reportable segment compared to the first quarter of Fiscal 2025. AUR in North America was bolstered by a focus on key price points in both bridal and fashion, as noted above, specifically in our Kay, Zales and Jared brands. Same store sales in the International reportable segment were up 4.5% in the first quarter.

Current wording

Signet’s total sales increased by 3.0% during the second quarter of Fiscal 2026 compared to the same period in Fiscal 2025. The Company saw positive same stores sales growth of 2.0% during the quarter, driven by growth in fashion and services. Merchandise average unit retail (“AUR”) increased in both fashion and bridal, which offset an overall decline in units period over period. The unit decline primarily reflects decreases in Banter, which was more impacted by higher gold prices, as well as a strategic reduction of low-priced promotional items. The overall year over year sales improvement was impacted by an approximate 120 basis point drag from underperformance in the James Allen brand in the second quarter. During the second quarter of Fiscal 2026, AUR was up 9.8% in the North America reportable segment and 5.6% in the International reportable segment compared to the second quarter of Fiscal 2025. AUR in North America was bolstered by a focus on our assortment strategy, particularly in lab-grown diamond (“LGD”) fashion, as well as the impact of higher gold prices, as noted above. Same store sales in the International reportable segment were up 0.8% in the second quarter.

Previous wording

Refer to the “Results of Operations” section below for additional information on performance during the first quarter of Fiscal 2026.

Current wording

Refer to the “Results of Operations” section below for additional information on performance during the second quarter of Fiscal 2026.

Previous wording

The Company anticipates same store sales to be down 2.0% to up 1.5% for Fiscal 2026 providing for some variability in an uncertain consumer spending environment. The Company believes it can continue the first quarter trends on fashion and bridal at key price points and expand margins as our assortment and promotional flexibility should more than offset impacts from existing tariffs. The Company believes that under its new Grow Brand Love strategy it can deliver long term sustainable growth by better aligning our brands to their unique customer expectations, as well as offering a balanced assortment in both bridal and fashion. In addition, concentrating on our three largest brands - Kay, Zales and Jared - creates the most meaningful impact on growth, most immediately through assortment architecture, promotion management, and maximizing the investments in our e-commerce channel.

Current wording

The Company anticipates same store sales in the range of down 0.75% to up 1.75% for Fiscal 2026 providing for variability in a measured consumer spending environment. The Company believes it is well positioned as it moves toward the Holiday Season, by having the right merchandise assortment at the right price points, while leveraging our marketing and brand experience to capitalize on consumer demand. The Company believes that it can build on its early progress under our Grow Brand Love strategy through distinct merchandise in both fashion and bridal, enhanced marketing, and unique customer experiences. In addition, the enhanced focus on our three largest brands - Kay, Zales and Jared - creates the most meaningful impact on growth, most immediately through assortment architecture, promotion management, and maximizing the investments in our e-commerce channel.

Previous wording

The Company continues to evaluate the impacts of certain macroeconomic factors on its business, such as tariffs, inflation and the Russia-Ukraine and Middle East conflicts. The Company is closely monitoring ongoing activities related to changes to US economic policy, including potential impacts from both taxes and tariffs. Signet looks to navigate tariffs through a combination of vendor negotiations, value engineering of new merchandise to avoid retail increases where possible, as well as promotion and lifecycle management. As previously discussed, 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-grown diamonds, continued inflationary impacts to the Company (including, but not limited to, materials, labor, fulfillment and advertising costs), 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, and organized retail crime and its impact to mall traffic. See “Forward-Looking Statements” above as well as the “Risk Factors” section within Item 1A of Signet’s Fiscal 2025 Annual Report on Form 10-K.

Current wording

The Company also continues to evaluate the impacts of other macroeconomic factors on its business, such as inflation and the Russia-Ukraine and Middle East conflicts. As previously discussed, 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 on lab-grown diamonds, continued inflationary impacts to the Company (including, but not limited to, materials, labor, fulfillment and advertising costs), 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, and organized retail crime and its impact to mall traffic. See “Forward-Looking Statements” above as well as the “Risk Factors” section within Item 1A of Signet’s Fiscal 2025 Annual Report on Form 10-K.

Previous wording

Comparison of First Quarter Fiscal 2026 to First Quarter Fiscal 2025

Current wording

Comparison of Second Quarter Fiscal 2026 to Second Quarter Fiscal 2025

Previous wording

Signet's total sales increased 2.0% year over year to $1.54 billion in the 13 weeks ended May 3, 2025. Same store sales increased 2.5%, compared to a decrease of 8.9% in the prior year quarter. These increases were primarily from closing merchandise assortment gaps at key gifting price points both in fashion and in bridal, as well as increased AUR in both categories, however were softened by an approximate 140 basis point drag from underperformance in the James Allen brand in the first quarter.

Current wording

Signet's total sales increased 3.0% year over year to $1.54 billion in the 13 weeks ended August 2, 2025. Same store sales increased 2.0%, compared to a decrease of 3.4% in the prior year quarter. These increases were primarily from filling merchandise assortment gaps at key price points in fashion, as well as growth in services. The improved assortment across the bridal and fashion categories led to an increase in AUR of approximately 9% compared to the prior year second quarter. These increases were impacted by an approximate 120 basis point drag on same store sales from underperformance in the James Allen brand in the second quarter.

Previous wording

E-commerce sales in the first quarter of Fiscal 2026 were $338.7 million, up $0.8 million or 0.2%, compared to $337.9 million in the prior year first quarter. E-commerce sales accounted for 22.0% of first quarter sales, a slight decrease compared to 22.4% of total sales in the prior year first quarter. Brick and mortar same store sales increased 2.9% from the prior year first quarter.

Current wording

E-commerce sales in the second quarter of Fiscal 2026 were $317.6 million, down $14.7 million or 4.4%, compared to $332.3 million in the prior year second quarter. This decrease was primarily due to underperformance in the James Allen brand noted above. E-commerce sales accounted for 20.7% of second quarter sales, a decrease compared to 22.3% of total sales in the prior year second quarter. Brick and mortar same store sales increased 3.8% from the prior year second quarter.

Previous wording

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

Current wording

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

Previous wording

As described above, AUR is an additional operating metric defined as merchandise sales divided by merchandise units. AUR is measured each period based on reported sales for the corresponding period presented.

Current wording

As described above, AUR is an additional operating metric defined as merchandise sales on a constant currency basis divided by merchandise units. AUR is measured each period based on reported sales for the corresponding period presented.

Previous wording

The North America reportable segment’s total sales were $1.45 billion compared to $1.42 billion in the prior year quarter, or an increase of 2.1%. This increase was primarily from closing merchandise assortment gaps at key gifting price points both in fashion and in bridal, as well as increased AUR in fashion. This increase was softened by the underperformance of the James Allen brand noted above. The number of units sold decreased 6.6% year over year. Same store sales increased 2.3% compared to a decrease of 9.2% in the prior year quarter.

Current wording

The North America reportable segment’s total sales were $1.43 billion compared to $1.40 billion in the prior year quarter, or an increase of 2.1%. This increase in overall sales and same store sales was primarily from filling merchandise assortment gaps at key price points in fashion, which drove strong AUR growth and offset a decrease in units, as well as continued growth in services compared to the prior year quarter. These increases were impacted by the underperformance of the James Allen brand noted above. The number of units sold decreased 7.6% year over year, primarily in Banter. Same store sales increased 2.0% compared to a decrease of 3.7% in the prior year quarter.

Previous wording

The International reportable segment’s total sales increased 3.8%, or 1.5% at constant exchange rates, to $80.1 million compared to $77.2 million in the prior year quarter. The number of units sold decreased 1.1% and AUR increased 2.8% year over year. Same store sales increased 4.5% compared to a decrease of 3.2% in the prior year quarter. The total reported sales increase was slightly lower than same store sales due to store closures.

Current wording

The International reportable segment’s total sales increased 6.1%, or 0.4% at constant exchange rates, to $91.8 million compared to $86.5 million in the prior year quarter. The number of units sold decreased 4.6% and AUR increased 5.6% year over year. Same store sales increased 0.8% compared to an increase of 1.7% in the prior year quarter. The increase in total sales at constant exchange rates was slightly lower than the increase in same store sales due to store closures.

Previous wording

In the first quarter of Fiscal 2026, gross margin was $598.8 million or 38.8% of sales compared to $572.4 million or 37.9% of sales in the prior year quarter. Gross margin in total dollars and as a percentage of sales increased compared to the prior year quarter reflecting merchandise margin expansion driven by higher AUR in both fashion and bridal, as discussed above, and a balanced promotional strategy, as well as leveraging of fixed costs such as occupancy.

Current wording

In the second quarter of Fiscal 2026, gross margin was $591.9 million or 38.6% of sales compared to $566.3 million or 38.0% of sales in the prior year quarter. For the 26 weeks ended August 2, 2025, gross margin was $1.2 billion or 38.7% of sales compared to $1.1 billion or 37.9% of sales in the prior year comparable period. Gross margin increased in total dollars and as a percentage of sales for both the 13 and 26 weeks ended August 2, 2025 reflecting merchandise margin expansion driven by higher AUR in fashion and bridal, as discussed above, as well as growth in services, refined promotional and assortment strategies, and leveraging of fixed costs such as occupancy.

Previous wording

In the first quarter of Fiscal 2026, other operating expense was $24.7 million, compared to $7.2 million in the prior year quarter. The 13 weeks ended May 3, 2025 primarily included restructuring and asset impairment charges of $22.2 million related to the actions under the Company’s new corporate strategy, Grow Brand Love. The 13 weeks ended May 4, 2024 primarily included restructuring and asset impairment charges of $7.0 million. See Note 17 and Note 18 for additional information.

Current wording

In the second quarter of Fiscal 2026, other operating expense was $3.6 million, compared to $2.6 million in the prior year quarter. In the first half of Fiscal 2026, other operating expense was $25.1 million, compared to $7.4 million in the prior year comparable period. The 13 and 26 weeks ended August 2, 2025 primarily included restructuring charges of $2.8 million and $21.8 million, respectively, related to the actions under the Company’s new corporate strategy, Grow Brand Love. The 13 and 26 weeks ended August 3, 2024 primarily included restructuring charges of $1.2 million and $5.8 million. See Note 17 and Note 18 for additional information.

Previous wording

For the first quarter of Fiscal 2026, operating income was $48.1 million, or 3.1% of sales, compared to operating income of $49.8 million or 3.3% of sales in the prior year quarter. The decrease in operating income for the 13 weeks ended May 3, 2025 was primarily driven by restructuring costs, partially offset by stronger sales performance and gross margin as described above.

Current wording

For the second quarter of Fiscal 2026, operating income was $2.8 million, or 0.2% of sales, compared to an operating loss of $100.9 million or (6.8)% of sales in the prior year quarter. In the first half of Fiscal 2026, operating income was $50.9 million or 1.7% of sales compared to operating loss of $51.1 million or (1.7)% of sales in the prior year comparable period. The increase in operating income for both the 13 and 26 weeks ended August 2, 2025 was primarily driven by stronger sales performance and gross margins as described above, as well as lower goodwill and indefinite-lived intangible asset impairment charges taken in the current year, partially offset by higher restructuring costs.

Previous wording

In the first quarter, operating income in the North America reportable segment was $83.0 million, or 5.7% of segment sales, and includes $10.9 million of restructuring charges and $3.2 million of asset impairment charges primarily related to long-lived assets. In the prior year quarter, operating income in the North America reportable segment was $83.2 million, or 5.9% of segment sales, and included $2.0 million of asset impairment charges primarily related to planned store closures and $0.6 million of restructuring charges.

Current wording

In the second quarter, operating income in the North America reportable segment was $23.0 million, or 1.6% of segment sales, and includes $80.2 million of asset impairment charges primarily related to goodwill and indefinite-lived intangible assets and $1.0 million of restructuring charges. In the prior year quarter, operating loss in the North America reportable segment was $77.2 million, or (5.5)% of segment sales, and included $166.2 million of asset impairment charges primarily related to goodwill and indefinite-lived intangible assets and $0.2 million of restructuring charges.

Previous wording

In the first quarter, operating loss in the International reportable segment was $7.0 million, or (8.7)% of segment sales. In the prior year quarter, operating loss in the International reportable segment was $13.0 million, or (16.8)% of segment sales, and included $4.0 million of restructuring charges and $1.3 million of net losses from the previously announced divestiture of the UK prestige watch business.

Current wording

In the second quarter, operating loss in the International reportable segment was $2.2 million, or (2.4)% of segment sales. In the prior year quarter, operating loss in the International reportable segment was $4.2 million, or (4.9)% of segment sales, and included $1.0 million of restructuring charges and $1.2 million of net losses from the previously announced divestiture of the UK prestige watch business.

Previous wording

In the first quarter, corporate and unallocated expenses were $24.0 million and includes $8.1 million of restructuring charges. In the prior year quarter, corporate and unallocated expenses were $17.3 million.

Current wording

In the second quarter, corporate and unallocated expenses were $17.6 million, compared to $16.9 million in the prior year quarter. In the first half of Fiscal 2026, corporate and unallocated expenses were $41.6 million, compared to $34.2 million in the first half of Fiscal 2025. The Company incurred$1.7 million and $9.8 million of restructuring charges in the 13 and 26 weeks ended August 2, 2025, respectively.

Previous wording

For the 13 weeks ended May 3, 2025, net interest income was $0.8 million, compared to $8.6 million in the 13 weeks ended May 4, 2024. The decrease in the current year quarter was the result of lower cash balances earning interest as compared with the prior year quarter, primarily due to cash used over the past year related to the Preferred Shares retirement, repayment of the Senior Notes and common share repurchases.

Current wording

For the 13 and 26 weeks ended August 2, 2025, net interest expense was $0.1 million and net interest income was $0.7 million, respectively, compared to net interest income of $2.4 million and $11.0 million in the 13 and 26 weeks ended August 3, 2024, respectively. The decreases in the current year quarter and year to date period are the result of lower cash balances earning interest as compared with the prior year comparable periods, primarily due to cash used over the past year related to the Preferred Shares retirement, repayment of the Senior Notes and common share repurchases.

Previous wording

In the first quarter of Fiscal 2026, income tax expense was $12.1 million, with an effective tax rate (“ETR”) of 26.5%, compared to income tax expense of $6.5 million, with an ETR of 11.1%, in the prior year comparable period. Signet was not subject to income tax in Bermuda prior to Fiscal 2026. On December 27, 2023, Bermuda enacted a 15% corporate income tax that was effective for the Company beginning with Fiscal 2026. The ETR for the first quarter of Fiscal 2026 was higher than the Bermuda income tax rate, primarily as a result of the unfavorable impact of foreign rate differences (primarily in the US) and unfavorable discrete tax items recognized in the 13 weeks ended May 3, 2025, including the tax shortfall for share-based compensation which vested during the year of $0.8 million.

Current wording

In the first half of Fiscal 2026, income tax expense was $26.3 million, with an ETR of 51.9%, compared to income tax expense of $8.1 million, with an ETR of (21.1)% in the prior year comparable period. The ETR for the 26 weeks ended August 2, 2025 was higher than the Bermuda income tax rate, primarily as a result of the unfavorable impact of foreign rate differences (primarily in the US) and unfavorable discrete tax items recognized, including non-deductible goodwill impairment charges of $53.6 million and the tax shortfall for share-based compensation which vested during the year of $0.7 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 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.

Previous wording

Free cash flow is a non-GAAP measure defined as the net cash used in operating activities less capital expenditures. 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 provided by (used in) operating activities less capital expenditures. 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

(3) As described in Note 5, the Company recorded a deemed dividend to net income (loss) attributable to common shareholders of $85.2 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 $1.6 million of related expenses.

Current wording

(4) As described in Note 5, the Company recorded a deemed dividend to net (loss) income attributable to common shareholders of $85.2 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 $1.6 million of related expenses.

Previous wording

(4) Adjusted diluted EPS for the 13 weeks ended May 4, 2024 was calculated using 48.0 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.

Current wording

(5) 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.

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 May 3, 2025, the Company had $264.1 million of cash and cash equivalents and no outstanding borrowings on the ABL. The available borrowing capacity on the ABL was $1.1 billion as of May 3, 2025.

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 August 2, 2025, the Company had $281.4 million of cash and cash equivalents and no outstanding borrowings on the ABL. The available borrowing capacity on the ABL was $1.1 billion as of August 2, 2025.

Previous wording

The strategic imperatives of the Company’s Grow Brand Love transformation strategy have been designed to accelerate growth by building on a strong core foundation to create shareholder value. The Company will focus on increasing market share in core areas such as Bridal, while expanding into categories like self-purchase and gifting. In order to achieve these goals, the Company is in the process of restructuring to streamline operations, increase efficiencies, improve accountability and reduce costs. Streamlining the organization is expected to enable our new go-to-market strategies and contribute towards our efforts to strengthen our brand portfolio. We are also optimizing our real estate footprint to support the positioning of our brands and modernizing our stores through capital improvements. The Company invested $153.0 million for capital expenditures in Fiscal 2025 and has planned for capital expenditures of up to $160 million in Fiscal 2026, reflecting primarily investments in new stores and renovations, as well as additional digital and technology advancements.

Current wording

The strategic imperatives of the Company’s Grow Brand Love transformation strategy have been designed to accelerate growth by building on a strong core foundation to create shareholder value. The Company will focus on increasing market share in core areas such as Bridal, while expanding into categories like self-purchase and gifting. In order to achieve these goals, the Company is in the process of restructuring to streamline operations, increase efficiencies, improve accountability and reduce costs. Streamlining the organization is expected to enable our new go-to-market strategies and contribute towards our efforts to strengthen our brand portfolio. We are also optimizing our real estate footprint to support the positioning of our brands and modernizing our stores through capital improvements. These real estate initiatives will include the closure of underperforming stores, repositioning stores out of declining venues, renovation of stores and an increased focus on transference from closed locations to capitalize on brand equity across the portfolio. The Company invested $153.0 million for capital expenditures in Fiscal 2025 and has planned for capital expenditures of up to $160 million in Fiscal 2026, reflecting primarily investments in new stores and renovations as described above, as well as additional digital and technology advancements.

Previous wording

$414.1 million, including accrued and unpaid dividends. During the second and third quarters of Fiscal 2025, the Preferred Holders converted all of the remaining Preferred Shares, and the Company elected to settle all the remaining Preferred Shares in cash totaling $401.5 million. The ability of the Company to settle the Preferred Shares in cash highlights the effectiveness of the Company’s flexible operating model and working capital efficiency, which has generated significant free cash flow and liquidity over the past few years. Refer to Note 5 for additional information.

Current wording

On April 1, 2024, in accordance with the terms of the amended Certificate of Designation for the Preferred Shares, the Preferred Holders converted half of the then outstanding Preferred Shares and the Company elected to settle such conversions in cash totaling $414.1 million, including accrued and unpaid dividends. During the second and third quarters of Fiscal 2025, the Preferred Holders converted all of the remaining Preferred Shares, and the Company elected to settle all the remaining Preferred Shares in cash totaling $401.5 million. The ability of the Company to settle the Preferred Shares in cash highlights the effectiveness of the Company’s flexible operating model and working capital efficiency, which has generated significant free cash flow and liquidity over the past few years. Refer to Note 5 for additional information.

Previous wording

The Company remains committed to its goal of returning cash to shareholders, which includes being a dividend growth company. For the fourth year in a row, Signet has increased its quarterly common dividend from $0.29 per share in Fiscal 2025 to $0.32 per share beginning in Fiscal 2026. The Company also remains focused on common share repurchases under its 2017 Program. In March 2024, the Board approved a further $200 million increase to the multi-year authorization under the 2017 Program. The Company repurchased $117.4 million of common shares during the 13 weeks ended May 3, 2025 with $605.6 million of shares authorized for repurchase remaining as of May 3, 2025. See Note 6 for additional information related to the common share repurchases.

Current wording

The Company remains committed to its goal of returning cash to shareholders, which includes being a dividend growth company. For the fourth year in a row Signet has increased its quarterly common dividend, from $0.29 per share in Fiscal 2025 to $0.32 per share beginning in Fiscal 2026. The Company also remains focused on common share repurchases under its 2017 Program. In March 2024, the Board approved a further $200 million increase to the multi-year authorization under the 2017 Program. The Company has repurchased $149.7 million of common shares to date in Fiscal 2026, with $573.4 million of shares authorized for repurchase remaining as of August 2, 2025. See Note 6 for additional information related to the common share repurchases.

Previous wording

Signet derives most of its operating cash flows through the sale of merchandise and extended service plans. As a retail business, Signet receives cash when it makes a sale to a customer or when the payment has been processed by Signet or the relevant bank if the payment is made by third-party credit or debit card. The Company has outsourced its entire credit card portfolio, and it receives cash from its outsourced financing partners (net of applicable fees) generally within two days of the customer sale. Offsetting these receipts, the Company’s largest operating expenses are the purchase of inventory, payroll and payroll-related benefits, store occupancy costs (including rent) and advertising.

Current wording

Signet derives most of its operating cash flows through the sale of merchandise and extended service plans. As a retail business, Signet receives cash when it makes a sale to a customer or when the payment has been processed by Signet or the relevant bank if the payment is made by third-party credit or debit card. The Company has outsourced its entire credit card portfolio, and it receives cash from its outsourced financing partners (net of applicable fees) generally within two to five days of the customer sale. Offsetting these receipts, the Company’s largest operating expenses are the purchase of inventory, payroll and payroll-related benefits, store occupancy costs (including rent) and advertising.

Previous wording

Net cash used in operating activities was $175.3 million during the 13 weeks ended May 3, 2025 compared to $158.2 million in the prior year comparable period. The change in operating cash flows compared to prior year was primarily driven by higher paydowns of accounts payable year over year. The significant movements in operating cash flows are further described below:

Current wording

Net cash used in operating activities was $89.0 million during the 26 weeks ended August 2, 2025 compared to $114.4 million in the prior year comparable period. The change in operating cash flows compared to prior year was primarily driven by higher gross profit in the current year period. The significant movements in operating cash flows are further described below:

Previous wording

•The change in current income taxes was a use of $7.5 million in the current period compared to a use of $38.6 million in the prior year. The current year use was primarily the result of net income tax payments of $16.2 million, compared to net income tax payments of $45.3 million in the prior year period.

Current wording

•The change in current income taxes was a use of $21.9 million in the current period compared to a use of $52.0 million in the prior year. The current year use was primarily the result of net income tax payments of $46.2 million, compared to net income tax payments of $74.3 million in the prior year period.

Previous wording

•Cash used by inventory was $56.1 million, consistent with a use of $48.9 million in the prior year, reflecting seasonal replenishment of inventories following the fourth quarter.

Current wording

•Cash used by inventory was $35.9 million, compared to a use of $41.4 million in the prior year, reflecting seasonal replenishment of inventories following the fourth quarter of both fiscal years.

Previous wording

•Cash used by accounts payable was $187.5 million compared to a use of $136.7 million in the prior year period. Accounts payable is historically a use of cash in the first quarter, as the Company pays down invoices due from Holiday Season merchandise purchases. The increased use compared to the prior first quarter is due to timing and mix of payables.

Current wording

•Cash used by accounts payable was $248.5 million compared to a use of $193.3 million in the prior year period. Accounts payable is historically a use of cash in the first quarter, as the Company pays down invoices due from Holiday Season merchandise purchases. The increased use compared to the prior year is due to timing and mix of payables, as the first half of the prior year benefited from the impacts of the 53rd week in Fiscal 2024.

Previous wording

•Cash used by accrued expenses and other liabilities was $5.4 million, compared to a use of $40.8 million in the prior year period. The difference compared to the prior year comparable period is primarily due to timing of advertising payments.

Current wording

•Cash provided by accrued expenses and other liabilities was $10.1 million, compared to a use of $36.1 million in the prior year period. The difference compared to the prior year comparable period is primarily due to timing of advertising payments.

Previous wording

Net cash used in investing activities for the 13 weeks ended May 3, 2025 was $36.6 million compared to a use of $21.5 million in the prior year period. Cash used in Fiscal 2026 was related to capital expenditures of $36.6 million. Capital expenditures are associated with new stores, remodels of existing stores, and capital investments in digital and IT. Signet has planned Fiscal 2026 capital expenditures of up to $160 million. In Fiscal 2025, net cash used in investing activities was primarily related to capital expenditures of $23.3 million.

Current wording

Net cash used in investing activities for the 26 weeks ended August 2, 2025 was $60.7 million compared to a use of $57.2 million in the prior year period. Cash used in Fiscal 2026 was related to capital expenditures of $60.6 million. Capital expenditures are associated with new stores, remodels of existing stores, and capital investments in digital and IT. Signet has planned Fiscal 2026 capital expenditures of up to $160 million. In Fiscal 2025, net cash used in investing activities was primarily related to capital expenditures of $51.3 million.

Previous wording

Stores opened and closed in the 13 weeks ended May 3, 2025:

Current wording

Stores opened and closed in the 26 weeks ended August 2, 2025: