Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Q1 FY2016 Earnings Presentation
16 slides from Signet Jewelers's earnings presentation, May 28, 2015
Slide 1: Fiscal 2016 First Quarter Results
Fiscal 2016 First Quarter Results Thursday, May 28, 2015
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: Q1 Fiscal 2016 Financial Results
Q1 Fiscal 2016 Financial Results • Signet increased same store sales 3.6% • Signet earnings per share (EPS) • $1.48, up 23.3% • Adjusted EPS1, $1.62, up 25.6% • Comparable basis EPS1,2, $1.35, up 4.7% • Same store sales by division: • Sterling division up 2.3% • Zale division up 5.6% • UK division u
Slide 4: Sterling Q1 Performance Drivers
Sterling Q1 Performance Drivers • Results led by Kay • Diamond jewelry and watches • Omni-channel • Field operations • Jared • Merchandise drivers: several fashion collections, Movado and Citizen • Test initiatives: Vera Wang Love, incremental radio advertising, brand book
Slide 5: Zale Q1 Performance Drivers
Zale Q1 Performance Drivers • Branded bridal and fashion diamond collections: Vera Wang Love, Celebration Diamond and Unstoppable Love • In-store teams • Divisional collaboration • Other drivers (e.g. Canada, kiosks, e-commerce)
Slide 6: UK Q1 Performance Drivers
UK Q1 Performance Drivers • Focus on selling diamonds: Perfect Fit, the Forever Diamond, Neil Lane, Leo, Tolkowsky • Other merchandise wins: watches, select fashion jewelry • Outlets; eCommerce • Executing selling and collaborative culture
Slide 7: Q1 Fiscal 2016 Sales Performance
Q1 Fiscal 2016 Sales Performance Change in Total sales Exchange same store at constant translation Change in Total sales First Quarter Fiscal 2016 sales1 exchange rate2 impact2 total sales (in millions) Kay 3.6% 6.0% — 6.0% $596.6 Jared 0.2% 4.4% — 4.4% $295.5 Regional brands 0.8% (9.5)% — (9.5)% $5
Slide 8: Non-GAAP Reconciliation (in millions of $ except per share data)
Non-GAAP Reconciliation (in millions of $ except per share data) Adjustments Purchase Transaction Adjusted Signet Accounting Costs Signet Sales 1,539.2 (8.6) — 1,530.6 Cost of goods sold (957.8) (6.9) — (964.7) Gross margin 581.4 (15.5) — 565.9 SGA (450.9) (4.1) (6.4) (453.2) Other operating income,
Slide 9: Q1 Fiscal 2016 Operating Income (Loss)
Q1 Fiscal 2016 Operating Income (Loss) Q1 FY2016 Q1 FY2015 $m % of Division Sales $m % of Division Sales Sterling Jewelers division $178.2 18.9% $166.3 18.4% Zale division¹ $15.5 3.5% -- -- UK Jewelry division $0.5 0.3% $0.0 0.0% Other² ($18.0) NM ($15.6) NM Signet $176.2 11.5% $150.7 14.3% 1. Zale
Slide 10: Q1 Fiscal 2016 Adjusted Signet Detail
Q1 Fiscal 2016 Adjusted Signet Detail¹ Adjusted Signet excluding Zale² Zale operations Adjusted Signet $m % $m % $m % Sales 1,093.5 100.0% 445.7 100.0% 1,539.2 100.0% Cost of goods sold (670.1) (61.3)% (287.7) (64.6)% (957.8) (62.2)% Gross margin 423.4 38.7% 158.0 35.4% 581.4 37.8% SGA (320.5) (29.3
Slide 11: Q1 Fiscal 2016 Adjusted Income Statement Highlights
Q1 Fiscal 2016 Adjusted Income Statement Highlights¹ $m % of Adjusted Sales Adjusted operating Income Q1 2015 $159.1 15.1% Adjusted gross margin $581.4 37.8% Adjusted selling, general & admin. $450.9 29.3% Other operating income $63.5 4.1% Adjusted operating income Q1 2016 $194.0 12.6% Adjusted earn
Slide 12: Inventory
Q1 Fiscal 2016 Inventory • Ending inventory $2,487.8 million, up $963.9 million due to • Zale division inventory of $896 million • New store growth of $40 million • Higher diamond inventory associated with bridal business and diamond sourcing initiative of $56 million
Slide 13: Credit Metrics
Credit Metrics First Quarter Fiscal 2016 Fiscal 2015 Accounts receivable, net (in millions) $1,499.9 $1,308.2 Sterling credit participation 60.7% 58.1% Sterling average monthly collection rate 12.6% 13.2%
Slide 14: Credit Statistics
Q1 Fiscal 2016 Credit Statistics (in millions) Fiscal 2016 Fiscal 2015 Net bad debt ($28.1) ($22.3) Other operating income $63.5 $54.0 Net Impact $35.4 $31.7 Allowance as a % of ending accounts 6.5% 6.4% receivable
Slide 15: Financial Guidance
Financial Guidance Second Quarter Fiscal 2016 Same store sales 2% to 3% EPS $0.99 to $1.05 Adjustments: Purchase accounting ($0.05) Transaction costs ($0.07) to ($0.06) Adjusted EPS (EPS less adjustments per share) $1.11 to $1.16 Fiscal 2016 Effective tax rate 28% to 29% Capital expenditures $275M t
Slide 16: Y ZALES
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