Benjamin Hughes

March 20, 2024 - 10:50 am

Signet Jewelers Announces Strong Financial Results and Expands Cost Savings Initiatives

HAMILTON, Bermuda, March 20, 2024 /PRNewswire/ - Signet Jewelers Limited ("Signet"), the largest retailer of diamond jewelry globally, has disclosed their financial achievements for both the 14 weeks (the fourth quarter of Fiscal 2024) and the 53 weeks (Fiscal 2024) ending February 3, 2024.

Virginia C. Drosos, CEO of Signet, expressed gratitude towards the team for meeting targets and effectively facing a challenging quarter and fiscal year. By focusing on building brand equity, enhancing customer experiences, and ensuring product freshness, the company circumvented the impact of steep discounting by rivals. Gross margin saw a notable 160 basis points rise, and the average transaction value was upheld. Fiscal 2025 is eyed with optimism as the company forecasts gradual recovery in same-store sales over the year.

Joan Hilson, Chief Financial, Strategy & Services Officer, highlighted Signet's remarkable free cash flow generation for the fourth consecutive year – over $600 million in Fiscal 2024, barring non-recurring legacy legal settlements. This success is ascribed to nimble inventory management and strict cost control measures. With such robust cash conversion, the share buyback initiative has been scaled from $650 million to $850 million, and a common dividend increase of 26% is anticipated, ensuring proper financial capacity to manage upcoming fiscal maturities. For Fiscal 2025, an expected $150 million to $180 million in cost savings will contribute to driving operating income.

Financial Highlights of the Fourth Quarter

The fourth quarter concluded with total sales of $2.5 billion, a decrease of 6.3% from the previous year, influenced partially by the sale of U.K. prestige watch locations. Same store sales were down 9.6%, but GAAP operating income rose to $416.3 million from $369.5 million in the prior year's fourth quarter. Signet's non-GAAP operating income saw a slight increase, while the GAAP diluted EPS shot up significantly to $11.75, bolstered by the Bermuda tax asset benefit. The year culminated with a cash and cash equivalents surge to $1.4 billion and the repurchase of roughly 246,000 shares during the quarter.

Snapshot of Full Year Fiscal 2024 Results

For the full year, total sales tallied $7.2 billion, marking an 8.6% decline from the previous year. The North America segment experienced a decrease of 8.0%, while the International segment witnessed an 8.4% fall in total sales. Despite the sales downturn, Signet enhanced its gross margin by 160 basis points to 43.3%, owing primarily to merchandise margin growth.

Advances in Shareholder Value

Signet's Board has lifted the quarterly cash dividend for common shares to $0.29 for Fiscal 2025 Q1, signifying a 26% hike from last year. Fiscal 2024 saw the company repurchasing about 1.9 million shares at an average price of $73.06, and post-quarter, additional shares worth $7 million were acquired. These actions underscore Signet's capability to provide substantial value back to its stakeholders.

Projections for Fiscal 2025

With a soft start to Fiscal 2025, Signet anticipates significant improvement from mid-February onwards. Although U.S. engagement incidents are projected to fall compared to the previous year, the company remains steadfast in its ability to offer unparalleled value through its expansive portfolio of jewelry brands.