Signet Jewelers Limited, announcing its results for the 13 weeks ended August 3, 2019 (second quarter Fiscal 2020), reported that total sales for the period stood at US$ 1.36 billion, marking a decrease of 3.9% y-o-y, on a reported basis and 3.4% on a constant currency basis.  

The Company’s Same Store Sales (SSS) at US$ 1,364.4 million marked a decline of 1.5% as compared to sales worth US$ 1,420.1 million registered for the same period of the previous year. However, its e-commerce sales, which are part of SSS, were higher by 4% y-o-y. 

The retailer’s e-commerce sales for the period amounted to US$ 156.9 million; with e-commerce sales accounting for 11.5% of sales; up from 10.6% of total sales in the prior year quarter. “Brick and mortar same store sales declined 2.3%,” Signet reported.

Signet reported a GAAP operating loss of US$ 22.4 million for second quarter Fiscal 2020; as compared to a loss of US$ 58.1 million reported for the same period of the previous year, under the same head. Its non-GAAP operating income for second quarter Fiscal 2020 stood at US$ 53.1 million as against US$ 48.6 million earned under the head for the same period of the previous year.

While the Company reported GAAP diluted earnings per share (EPS) of $(0.86) including a goodwill impairment charge of $0.91; its non-GAAP diluted EPS stood at $0.512 for second quarter Fiscal 2020.

Signet also said that net cash provided by operating activities for the period amounted to US$ 246.6 million year to date; and that it had a free cash flow of US$ 194.4 million year to date.

“We continue to gain traction on our transformation initiatives and delivered second quarter results that exceeded our same store sales, non-GAAP operating profit, and non-GAAP earnings per share expectations,” said Signet Chief Executive Officer Virginia C. Drosos. “Our continuing cost control and disciplined inventory management also led to improved adjusted free cash flow generation in both the second quarter as well as year to date. We remain on track to deliver our full year non-GAAP financial guidance. As we enter the competitive holiday season, we believe we are positioned to execute our product strategy by launching additional flagship brands, delivering relevant on-trend new merchandise and offering a highly competitive assortment for value-oriented shoppers. We remain focused on delivering our Path to Brilliance transformation designed to drive sustainable growth and create value for our shareholders over the long-term.”

Under its Signet Path to Brilliance the Company expects net cost savings of US$ 70 million - US$ 80 million in Fiscal 2020.   

Signet also revealed that in Fiscal 2020, it expects to close approximately 150 stores, with 66 closures already having taken place in the fiscal year to date; and limited new store openings for the full year. “The company expects it will have reduced its store base by approximately 13% over the three-year period from Fiscal Years 2018 - 2020, materially reducing its exposure to lower grade malls and simplifying the portfolio by exiting most of its regional banners,” the Company stated.

Further, Signet announced that “it expects to enter into new fully-committed 5-year US$ 1.6 billion senior asset-based credit facilities to refinance all outstanding amounts under its existing senior credit facilities that mature in July 2021, to finance a tender offer for its outstanding senior notes due in 2024, to pay related fees and expenses, and for general corporate purposes”.

Signet’s Board of Directors declared a quarterly cash dividend of $ 0.37 per share for the third quarter of Fiscal 2020, payable on November 29, 2019 to shareholders of record on November 1, 2019, with an ex-dividend date of October 31, 2019.

The Company’s Guidance for Fiscal 2020 expects same store sales to be down 2.5% to down 1.5%; and total sales of US$ 6.0 billion - US$ 6.03 billion. It has projected a Fiscal 2020 GAAP operating income of US$ 142 - $ 172 million; and non-GAAP operating income of US$ 260 - $280 million.