Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — FY2011 Earnings Presentation
18 slides from Signet Jewelers's earnings presentation, Jan 11, 2011
Slide 1: Fiscal 2011 Holiday Season Statement
Fiscal 2011 Holiday Season Statement January 11, 2011
Slide 2: Forward Looking Statements & Other Disclosure Matters
Forward Looking Statements & Other Disclosure Matters Forward-Looking Statements - This presentation contains statements which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, based upon management’s beliefs and expectations
Slide 3: Sales Performance
Sales Performance To January 1, 2011 9 weeks 48 weeks US UK Total US UK Total Change in sales % % % % % % Same store sales 11.7 (4.2) 8.1 8.9 (1.7) 6.6 Space impact (1.3) (1.1) (1.2) (0.9) (1.6) (1.1) Change at constant 10.4 (5.3) 6.9 8.0 (3.3) 5.5 exchange rate Exchange translation — (3.5) (0.9) —
Slide 4: Expected Fiscal 2011 Performance
Expected Fiscal 2011 Performance Reported Ö Income before income taxes $287.5 - $302.5 million, up 25% - 31% Ö Diluted earnings per share $2.20 - $2.32, up 20% - 27% Excluding Non-recurring Item1 Ö Income before income taxes $335 - $350 million, up 45% - 52% Ö Diluted earnings per share $2.54 - $2.6
Slide 5: Fiscal 2011 Operating Margin
Fiscal 2011 Operating Margin Ö Gross margin Ö improved gross merchandise margin Ö US net bad debt to total sales down 130 – 150 bpts Ö leverage of store occupancy costs Ö Selling, General & administrative costs Ö Fiscal 2010 change in vacation entitlement policy Ö management transition costs Ö under
Slide 6: Financial & Other Items
Financial & Other Items Ö Interest items Ö $47.5 million ‘Make Whole’ payment Ö other interest costs expected to be about $25 million Ö Fiscal 2012 net interest expense expected to be $6 - $7 million Ö Tax items Ö expected tax rate for Fiscal 2011 of ~34% Ö geographic mix of profits Ö Fiscal 2011 fo
Slide 7: US Jewelry
US Jewelry “Further growth from a proven strategy” 7
Slide 8: US Performance
US Performance Change from comparable Holiday Fiscal 2011 Year to Date prior year period Same store ASP1 Same store ASP1 sales, % % sales, % % Kay 10.6 8.8 6.8 7.1 Jared 18.7 10.4 16.0 6.9 Regional Brands 1.4 9.9 2.0 4.5 US division 11.7 11.3 8.9 8.1 Space change (1.3) (0.9) Total sales US division
Slide 9: Management Actions Driving Holiday Sales
Management Actions Driving Holiday Sales Ö Well trained and motivated staff Ö Continued success of differentiated ranges Ö Fiscal 2011 participation forecast to be up ~300bpts Ö Robust, flexible supply chain Ö Increased national television advertising impressions Ö Kay impressions up ~5% Ö Jared imp
Slide 10: In-house Receivables
In-house Receivables Ö Forecast credit metrics for Fiscal 2011 Ö participation up 10 to 30 bpts Ö net bad debt to total US sales 4.1% to 4.3% • down 150 to 130 bpts Ö collection rate about 12.7% - up about 20 bpts Ö Performance driven by: Ö sales growth Ö macro-economic environment Ö focus on execut
Slide 11: UK Jewelry
UK Jewelry “Making existing space work harder” 11
Slide 12: UK Performance
UK Performance Change from comparable Holiday Fiscal 2010 Year to Date prior year period Same store ASP1 Same store ASP1 sales, % % sales, % % H.Samuel (2.8) 4.5 (2.1) 8.0 Ernest Jones (5.9) 8.1 (1.3) 9.4 UK division (4.2) 4.9 (1.7) 9.2 Space change (1.1) (1.6) Total sales UK division (5.3) (3.3) at
Slide 13: Management Actions Driving Holiday Performance
Management Actions Driving Holiday Performance Ö Further improvements in customer service Ö Merchandise successes Ö charm bracelets and gold rings Ö Improved in-store presentation Ö Leverage of marketing scale Ö increased TV advertising by H.Samuel Ö customer relationship marketing expanded for both
Slide 14: Signet's Strengths
Signet’s Strengths Ö Record of gaining market share Ö quality of sales associates / customer service / in-store experience and divisional management Ö ability to leverage supply chain leadership Ö development & growth of differentiated merchandise Ö high customer awareness driven by largest national
Slide 15: Regulation G
Regulation G JEWELERS
Slide 16: Correction of Immaterial Error
Correction of Immaterial Error During the third quarter of Fiscal 2011, Signet changed its accounting for extended service plans. Previously, revenue from the sale of extended service plans was deferred, net of direct costs arising from the sale, and was recognized in proportion to the historical ac
Slide 17: Exchange Translation Impact on Sales
Exchange Translation Impact on Sales Signet has historically used constant exchange rates to compare period-to-period changes in certain financial data. This is referred to as ‘at constant exchange rates’ throughout this presentation and constitutes a “non GAAP financial measure”. Management conside
Slide 18: Impact of Non-recurring Item
Impact of Non-recurring Item On November 26, 2010, Signet incurred a $47.5m non-recurring ‘Make Whole’ payment arising from the prepayment in full of its private placement notes. Management considers it useful to exclude this significant, unusual and non-recurring item to analyze and explain changes