Announcing its results for the 14 weeks (fourth quarter Fiscal 2018 ) and 53 weeks (Fiscal 2018) ended February 3, 2018, Signet Jewelers Limited’s, Chief Executive Officer Virginia C. Drosos, not only spoke of the difficult time the retailer is facing  but also about the Company’s strong determination to implement strategic changes.

While same store sales (SSS) declined 5.2% in the fourth quarter they declined 5.3% for the full year fiscal 2018.

Signet reported  total sales of US$ 2.3 billion, up by US$ 23.2 million or 1.0% for fourth quarter Fiscal 2018.  “The total sales increase was driven by the extra 14th retail-calendar week of sales, worth US$ 84.3 million, as well as the addition of R2Net (acquired in September 2017) which contributed US$ 64.4 million in sales in the quarter, offset by a year-over-year decline in base same store sales,” the Company explained. “Same store sales, which excluded the impact of the 14th week from its calculation, decreased 5.2% in the fourth quarter Fiscal 2018.”

 R2Net sales were up 35.0% compared to the prior year quarter and had a 90 bps positive impact on total Company same store sales in the quarter, the Company added.

“eCommerce sales in the fourth quarter at banner websites and R2Net were US$ 253.8 million on a 14-week basis, or US$ 247.2 million on a 13 week basis, up 52.8%,” the Company said. “eCommerce sales increased across all divisions and accounted for 11.1% of quarterly sales, up from 7.1% of total sales in the prior year fourth quarter.”

Signet announced that GAAP diluted earnings per share (EPS) stood at US$ 5.24 for the fourth quarter and GAAP diluted EPS of US$ 7.44 for the full year fiscal 2018, including the impact of the revaluation of deferred taxes. “Excluding the impact of the revaluation of deferred taxes, non-GAAP diluted EPS of $4.28 for the fourth quarter and non-GAAP diluted EPS of $6.51 for the full year,” the Company revealed.

Signet's total sales for Fiscal 2018 stood at US$ 6.3 billion, marking a decrease of  US$ 155.4 million or 2.4%, compared to Fiscal 2017. “The total sales decline was driven by a decline in base same store sales, partially offset by benefit of the extra 14th retail-calendar week of sales worth US$ 84.3 million, as well as the addition of R2Net (acquired in September 2017) which contributed US$ 88.1 million in sales for the year,” the Company elaborated. “Same store sales, which excluded the impact of the 53rd week from its calculation, decreased 5.3% compared to the prior year. R2Net sales were up 29.9% compared to the prior year and had a 40 bps positive impact on total company same store sales.”

Signet generated a full-year operating cash flow of US $1.9 billion or US$ 988 million excluding proceeds from ADS credit transaction, free cash flow amounting to  US$ 1.7 billion or adjusted free cash flow of US$ 751 million, excluding proceeds from ADS credit transaction. 

While net cash generated from  operating activities amounted to US$ 1.9 billion or US$ 988.0 million, excluding the proceeds of the sale of the Company's prime receivables to ADS in October 2017,  for Fiscal 2018;  free cash flow for Fiscal 2018 stood at US$ 1.7 billion, or US$ 750.6 million, excluding the proceeds of the sale of prime receivables.

However, the Company reported cash and cash equivalents of US$ 225.1 million as of February 3, 2018, as compared to US$ 98.7 million at end of the previous fiscal. “The higher cash position was due to lower inventory and a favourable impact from the reduction in accounts receivable due to the sale of our prime receivables to ADS in October 2017,” the Company said.

“Fiscal 2018 was a challenging year for Signet," said Drosos. "We gained sales momentum in our Zales banner in the fourth quarter as our strategic initiatives began to take hold, but we experienced challenges at our Kay and Jared banners, including execution issues related to the first phase of our credit outsourcing transaction."

Summarising   Signet’s  new strategy she added, “Today we are announcing a three-year company-wide comprehensive strategy to reinvigorate Signet and transform the Company to be a share-gaining, OmniChannel jewellery category leader. Our 'Signet Path to Brilliance' plan will advance our strategic priorities across our Customer First, OmniChannel and Culture of Agility and Efficiency pillars. Plan initiatives build on the strength of the Signet banners and focus on 1) investing in eCommerce and product innovation, 2) enhancing customer value, and 3) increasing cost competitiveness. We will also look to further optimise our real estate portfolio through opportunistic reinvestment in innovative store concepts, relocations to off-mall locations, and strategic store closures. Looking ahead, Fiscal 2019 will be an important transition year as we implement our transformation plan, and we expect to see improved operational and financial performance beginning in Fiscal 2020.”

 Signet’s Board of Directors declared a quarterly cash dividend of US$ 0.37 per share for the first quarter of Fiscal 2019, payable on June 1, 2018 to shareholders of record on May 4, 2018, with an ex-dividend date of May 3, 2018. This represents a 20% increase in the dividend and is the seventh consecutive year that Signet has raised its quarterly dividend, the Company stated.

Meanwhile, Signet also announced the addition of  two Independent Directors    to its Board -- Sharon L. McCollam and Nancy A. Reardon. Both   appointments were made effective as of March 13, 2018.

“These appointments will further strengthen the Board’s expertise and breadth of experience as Signet launches its “Path to Brilliance” transformation strategic plan,” the Company said.

Signet added: “With these two additions, the Board represents an effective mix of industry and functional experience, public board service, and fresh perspectives. The Board now numbers 12 members, 6 of whom are women.”

McCollam most recently served as Executive Vice President, Chief Administrative Officer and Chief Financial Officer of Best Buy Company, and Reardon most recently was Senior Vice President, Chief Human Resources and Communications Officer for Campbell Soup Company.

H. Todd Stitzer, Signet Board of Directors Chairman, commented: “Both Sharon and Nancy served major public companies in C-suite positions. Their significant functional skills and broad operational experience in successfully transforming large complex organisations will be invaluable to our leadership as the team implements a strategic plan to grow and improve our business. Board refreshment and recruiting talented individuals have been an essential part Signet’s corporate governance practices, and we’re pleased to further strengthen our Board’s capabilities.”