Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Q3 FY2015 Earnings Presentation
20 slides from Signet Jewelers's earnings presentation, Nov 25, 2014
Slide 1: Fiscal 2015 Third Quarter Results
Fiscal 2015 Third Quarter Results Tuesday, November 25, 2014 Regionals 1
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: Q3 Fiscal 2015 Financial Results
Q3 Fiscal 2015 Financial Results Same store sales up 4.2% led by the Sterling Jewelers and UK divisions. Loss per share $0.02, in-line with guidance Adjusted EPS1 $0.21, exceeds guidance On comparable basis, EPS $0.47 up from $0.42 in third quarter fiscal 2014; an increase of 11.9% 1 Non-GAA
Slide 4: Signet Sales Performance
Signet Sales Performance Total sales Change in Change in Third Quarter Fiscal 2015 (in millions) same store sales 1 total sales 2 Kay $424.5 7.5% 10.9% Jared $227.4 6.5% 13.0% Regional brands $40.9 2.5% (13.5)% Sterling Jewelers (division & operating segment) $692.8 6.8% 9.7% Zales Jewelers $215.5 (
Slide 5: Sterling Q3 Performance Drivers
Sterling Q3 Performance Drivers Delivering an excellent guest experience ® ® Innovative and successful merchandising initiatives New creative marketing Continued multi-channel growth Regionals 5
Slide 6: UK Q3 Performance Drivers
UK Q3 Performance Drivers Store operations focus on guest experience Initiatives around bridal and diamonds Strong watch business Continued multi-channel growth Regionals 6
Slide 7: Zale Accomplishments
Zale Accomplishments Completed store operations conference Strengthened marketing activity Launched market segmentation study Testing cross- merchandising / selling Innovative merchandise assortment Regionals 7
Slide 8: Ready to Win at Holiday
Ready to Win at Holiday Store operations: Manager leadership conferences, new store concepts Merchandise: Line extensions, new collections, cross selling Marketing: Better ad buys, new creative, store events, strategic promos Regionals 8
Slide 9: Advancing Our Strategic Diamond Sourcing Initiative
Advancing Our Strategic Diamond Sourcing Initiative Entered into rough diamond supply contract with DeBeers Rough or unpolished diamonds continues to represent ~10% of value related to Sterling diamond procurement Vast majority polished in our Botswana factory Should be >20% over long term
Slide 10: Third Quarter Fiscal 2015 Sales Performance
Third Quarter Fiscal 2015 Sales Performance Sterling Zale UK Other¹ Total Sales Q3 2015 $m 692.8 331.4 151.0 2.7 1,177.9 Sales Q3 2014 $m 631.3 — 139.3 0.8 771.4 Change in sales % % % % % Change in same store sales² 6.8 (0.9) 3.7 — 4.2 Non-same store sales, net³ 2.9 — 1.0 NM 47.5 Change in total sal
Slide 11: Income Statement Highlights: Non-GAAP Reconciliation
Third Quarter Fiscal 2015 Income Statement Highlights Non-GAAP Reconciliation for the third quarter ended Novem ber 1, 2014 Adjustments Adjusted Purchase Severance Transaction Signet Accounting Costs Costs Signet Sales 1,189.4 (11.5) - 1,177.9 Cost of goods sold (825.5) (6.5) - (832.0) Gross margin
Slide 12: Operating Income (Loss)
Third Quarter Fiscal 2015 Operating Income (Loss) Q3 FY2015 Q3 FY2014 % of % of Division Division $m Sales $m Sales Sterling Jewelers Division 68.1 9.8 60.6 9.6 Zale Division1 (34.5) (10.4) - - UK Division (2.7) (1.8) (4.4) (3.2) Other2 (20.2) - (4.6) - Signet 10.7 0.9 51.6 6.7 1 Zale Division inclu
Slide 13: Adjusted Signet Detail
Third Quarter Fiscal 2015 Adjusted Signet Detail1 Adjusted Signet excluding Zale2 Zale operations Adjusted Signet $ % $ % $ % Sales 846.5 100.0% 342.9 100.0% 1,189.4 100.0% Cost of goods sold (580.4) (68.6)% (245.1) (71.5)% (825.5) (69.4)% Gross margin 266.1 31.4% 97.8 28.5% 363.9 30.6% SGA (263.0)
Slide 14: Adjusted Income Statement Highlights
Third Quarter Fiscal 2015 Adjusted Income Statement Highlights1 % of Adjusted Sales Operating income Q3 2014 $51.6m Adjusted gross margin $363.9m 30.6% Adjusted selling, general & admin. ($381.7)m (32.1)% Other operating income $53.5m 4.5% Adjusted operating income Q3 2015 $35.7m 3.0% Adjusted net i
Slide 15: Inventory Q3 Fiscal 2015
Inventory Q3 Fiscal 2015 Ending inventory $2,674.6 million, up $1,029.7 million due to: Zale division – Inventory of $979.3 million Sterling division – Primarily bridal brand extensions, loose diamonds, and new stores $66.8 million Inventory well-positioned for holiday season Regionals 15
Slide 16: Credit Metrics
Credit Metrics Third Quarter Fiscal 2015 Fiscal 2014 Accounts receivable, net $1,292.1m $1,123.5m Sterling credit participation 65.8% 63.4% Sterling average monthly collection rate 11.4% 11.7% Year to Date Fiscal 2015 Fiscal 2014 Sterling credit participation 61.7% 58.9% Sterling average monthly col
Slide 17: Credit Statistics
Credit Statistics Third Quarter Fiscal 2015 Fiscal 2014 Net bad debt ($41.7)m ($35.1)m Other operating income, net $53.5m $45.8m Net Impact $11.8m $10.7m Year to Date Fiscal 2015 Fiscal 2014 Net bad debt ($105.8)m ($92.9)m Other operating income, net $161.2m $139.1m Net Impact $55.4m $46.2m Allowanc
Slide 18: Other Balance Sheet Highlights
Other Balance Sheet Highlights Long-term debt $1.4B versus $0.0, due to financing of Zale acquisition 2.6% weighted average interest cost of debt $600M asset-backed securitization, $400M term loan, and $400M senior notes at 4.7% Utilized $145.0M of revolving credit facility for seasonal need
Slide 19: Financial Guidance
Financial Guidance Fourth Quarter Fiscal 2015 Same store sales 3.0% to 4.0% EPS ($2.69) to ($2.83) Adjustments: Purchase accounting ($0.17) to ($0.15) Transaction costs ($0.09) to ($0.07) Adjusted EPS (EPS less Adjustments) $2.95 to $3.05 Adjusted EPS expected to be favorably impacted by Zale operat
Slide 20: Fiscal 2015 Third Quarter Results
Fiscal 2015 Third Quarter Results Tuesday, November 25, 2014 Regionals 20