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What changed in SIGNET JEWELERS LTD's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SIGNET JEWELERS LTD's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+516 added−511 removedSource: 10-K (2024-03-21) vs 10-K (2023-03-16)

Top changes in SIGNET JEWELERS LTD's 2024 10-K

516 paragraphs added · 511 removed · 379 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

126 edited+34 added−41 removed32 unchanged
Biggest changeApproximately 87% of the Company’s workforce was employed in North America. 14 Table of Contents January 28, 2023 January 29, 2022 January 30, 2021 North America 25,794 27,162 23,700 UK 3,205 3,239 2,885 Other international 661 455 164 Total 29,660 30,856 26,749 North America (1) January 28, 2023 January 29, 2022 Full-time 14,475 15,395 Part-time 10,704 11,174 Total 25,179 26,569 By Gender Women 18,367 19,613 Men 6,495 6,601 Nonbinary or chose not to identify 317 355 By Race/Ethnicity Number of Black or African American employees 3,344 3,715 Number of American Indian and Alaska Native employees 199 212 Number of Asian employees 1,409 1,348 Number of Caucasian and White employees 12,753 13,094 Number of Hispanic and Latino employees 3,833 4,203 Number of Native Hawaiian and Other Pacific Islander employees 117 114 Number of employees of two or more races 906 976 Number of employees of unknown ethnicities 2,618 2,907 (1) Excludes Blue Nile in Fiscal 2023 and Diamonds Direct in Fiscal 2022 Diversity, equity, and inclusion Inspired by our Purpose and by our core value of “People First,” we value building a diverse workforce, embracing different perspectives, and fostering an inclusive, empowering work environment for our team members and customers.
Biggest changeFiscal 2023 excludes Blue Nile. 14 Table of Contents February 3, 2024 January 28, 2023 Headcount by status Full-time 14,297 14,475 Part-time 10,342 10,704 Total 24,639 25,179 Demographic information By Gender Women 72.9 % 72.9 % Men 26.0 % 25.8 % Chose not to identify 1.1 % 1.3 % By Race/Ethnicity Number of Black or African American employees 13.4 % 13.3 % Number of American Indian and Alaska Native employees 0.8 % 0.8 % Number of Asian employees 6.5 % 5.6 % Number of Caucasian and White employees 49.6 % 50.6 % Number of Hispanic and Latino employees 15.9 % 15.2 % Number of Native Hawaiian and Other Pacific Islander employees 0.4 % 0.5 % Number of employees of two or more races 3.6 % 3.6 % Number of employees of unknown ethnicities 9.8 % 10.4 % Diversity, equity, and inclusion Inspired by our Purpose and by our core value of “People First,” we value building a diverse workforce, embracing different perspectives, and fostering an inclusive, empowering work environment where our team members feel they belong and customers feel welcomed.
All team members are immersed in the Signet’s employee experience where team members are invited to be their best selves; introduced to new ideas that grow their passion, not just their jobs; and are inspired to inspire more love in the world.
All team members are immersed in Signet’s employee experience where team members are invited to be their best selves; introduced to new ideas that grow their passion, not just their jobs; and are inspired to inspire more love in the world.
Adverse effects of climate change, such as extreme weather events, particularly over a prolonged period of time, could negatively impact the Company’s business and results of operations if such conditions limit our consumers’ ability to access our stores, cause our consumers to limit discretionary spending, or disrupt our supply chains or distribution channels.
Adverse effects of climate change, such as extreme weather events, particularly over a prolonged period, could negatively impact the Company’s business and results of operations if such conditions limit our consumers’ ability to access our stores, cause our consumers to limit discretionary spending, or disrupt our supply chains or distribution channels.
In North American markets, customers are offered revolving and promotional credit plans under Signet’s private label credit card programs, a lease purchase option provided by Progressive Lease, and installment loan and split-payment options provided by Affirm, allowing Signet to offer payment options that meet each customer’s individual needs.
In North American markets, customers are offered revolving and promotional credit plans under Signet’s private label credit card programs, a lease purchase option provided by Progressive Leasing, and installment loan and split-payment options provided by Affirm, allowing Signet to offer payment options that meet each customer’s individual needs.
Having exceeded its overall Path to Brilliance goals, the Company launched its next phase of growth - Inspiring Brilliance - in Fiscal 2022 and continued in Fiscal 2023, focused on four “Where-to-Play” strategies: Win in Big Businesses; Expand Accessible Luxury and Value; Accelerate Services ; and Lead Digital Commerce .
Having exceeded its overall Path to Brilliance goals, the Company launched its next phase of growth - Inspiring Brilliance - in Fiscal 2022 and continued in Fiscal 2023 and Fiscal 2024, focused on four “Where-to-Play” strategies: Win in Big Businesses; Expand Accessible Luxury and Value; Accelerate Services ; and Lead Digital Commerce .
These services represent less than 5% of consolidated sales; however, represent an important opportunity to build customer loyalty. The custom design and repair business has its own field management and training structure and operates in Design & Service Centers located in Jared stores.
These services represent less than 5% of consolidated sales; however, they represent an important opportunity to build customer loyalty. The custom design and repair business has its own field management and training structure and operates in Design & Service Centers located in Jared stores.
Signet purchases loose polished diamonds in global markets (e.g. India, Israel) from a variety of sources (e.g. polishers, traders). Signet mounts stones in settings purchased from manufacturers using third-parties and in-house resources. By using these approaches, the cost of merchandise is reduced, and the consistency of quality is maintained enabling Signet to provide better value to customers.
Signet purchases loose polished diamonds in global markets (e.g. India and Israel) from a variety of sources (e.g. polishers and traders). Signet mounts stones in settings purchased from manufacturers using third-party and in-house resources. By using these approaches, the cost of merchandise is reduced, and the consistency of quality is maintained, enabling Signet to provide better value to customers.
In Fiscal 2022, we introduced updated extended service agreements offering unique plans for both bridal and fashion merchandise, with additional benefits including engraving for bridal merchandise. Jewelry replacement plans require the issuance of new replacement merchandise if the original merchandise is determined to be defective or damaged within a defined period in accordance with the plan agreement.
In Fiscal 2022, the Company introduced updated extended service agreements offering unique plans for both bridal and fashion merchandise, with additional benefits including engraving for bridal merchandise. Jewelry replacement plans require the issuance of new replacement merchandise if the original merchandise is determined to be defective or damaged within a defined period in accordance with the plan agreement.
Below is the summary of the goals within these strategies, as well as progress and accomplishments toward those goals during Fiscal 2023. • Win in Big Businesses: Signet is investing in and keeping its largest businesses healthy and growing by differentiating and positioning Signet banners with the customers they serve best and by leading innovation that will help ensure they win.
Below is the summary of the goals within these strategies, as well as progress and accomplishments toward those goals during Fiscal 2024. • Win in Big Businesses: Signet is investing in and keeping its largest businesses healthy and growing by differentiating and positioning Signet banners with the customers they serve best and by leading innovation that will help ensure they win.
In addition, the Company acquired Diamonds Direct, an accessible luxury banner with a highly productive operating model in the fourth quarter of Fiscal 2022. The Company also acquired Blue Nile, the leading accessible luxury online retailer of engagement rings and fine jewelry, in the third quarter of Fiscal 2023 with a more affluent, diverse, and differentiated customer base.
In addition, the Company acquired Diamonds Direct, an accessible luxury banner with a highly productive operating model, in the fourth quarter of Fiscal 2022. During Fiscal 2023, the Company also acquired Blue Nile, the leading accessible luxury online retailer of engagement rings and fine jewelry, with a more affluent, diverse, and differentiated customer base.
In addition to its compensation governance responsibilities, the Committee provides oversight on behalf of the Board to overall management of human capital including culture, diversity and inclusion, executive compensation programs, benefits and well-being strategy, talent management (attraction, development, and retention), performance management, and succession planning.
In addition to its compensation governance responsibilities, the HCM Committee provides oversight on behalf of the Board to overall management of human capital including culture, diversity, equity and inclusion, executive compensation programs, benefits and well-being strategy, talent management (attraction, development, and retention), performance management, and succession planning.
BUSINESS PURPOSE & STRATEGY Signet Jewelers Limited’s (“Signet”, the “Company”, “we”, “us”, or “our”) purpose is “Inspiring Love” and its mission is to enable all people to “Celebrate Life and Express Love.” The Company’s vision is to be the world’s premier jeweler by engaging customers with superior shopping and ownership experiences, connecting with them seamlessly across channels, earning their trust, and providing superior expertise, value, products, and services to meet their lifetime jewelry needs and desires.
BUSINESS PURPOSE & STRATEGY Signet Jewelers Limited’s (“Signet”, the “Company”, “we”, “us”, or “our”) Purpose is Inspiring Love and its mission is to enable all people to “Celebrate Life and Express Love.” The Company’s vision is to be the world’s premier jeweler by engaging customers with superior expertise, shopping and ownership experiences, connecting with them seamlessly across channels, and earning their trust while providing value, products, and services to meet their lifetime jewelry needs and desires.
The Company's priorities are to grow market share, deliver an annual double-digit non-GAAP operating margin, and allocate capital with a disciplined, strategic approach that invests in the business while also returning cash to shareholders and driving annual revenues toward a longer-term goal of $9 billion.
The Company's priorities are to grow market share, deliver an annual double-digit non-GAAP operating margin, and allocate capital with a disciplined, strategic approach that invests in the business while also returning cash to shareholders and driving annual revenues toward a mid-term goal of $9 billion to $10 billion.
A fast-growing segment of customers want to combine and modify pieces or design a custom piece entirely from scratch - even from a hand-drawn sketch that we transform into a beautiful bespoke piece of jewelry. The Company sees this personalization trend as a $700 million growth opportunity across Signet.
A fast-growing segment of customers want to combine and modify pieces or design a custom piece entirely from scratch - even from a hand-drawn sketch that we transform into a beautiful bespoke piece of jewelry. The Company sees this personalization trend as a services growth opportunity across Signet.
Effective and efficient marketing investment is a competitive advantage in the jewelry industry, which involves a discretionary purchase where most of the merchandise is not branded, and the purchase cycle can stretch to years.
Effective and efficient marketing investment is a competitive advantage in the jewelry industry, which involves a discretionary purchase where much of the merchandise is not branded, and the purchase cycle can stretch to years.
These offerings and partnerships allow the Company to focus on its core business of being the premier jewelry partner for its customers. Comenity Bank and Comenity Capital Bank (collectively “Comenity”) provide credit and services to the Kay, Jared, Zales and Banter banners. Genesis Financial Solutions (“Genesis”) provides a second look program for applicants declined by Comenity.
These offerings and partnerships allow the Company to focus on its core business of being the premier jewelry partner for its customers. Comenity Bank and Comenity Capital Bank (collectively “Comenity”) provide credit and services to the Kay, Jared, Zales and Banter banners. Concora Credit (“Concora”, formerly Genesis Financial Solutions) provides a second look program for applicants declined by Comenity.
Raw materials The Company’s costs, as with the jewelry industry as a whole, are generally affected by fluctuations in the price and supply of diamonds, gold and, to a much lesser extent, other precious and semi-precious metals and stones.
Raw materials The Company’s costs, as with the jewelry industry as a whole, are generally affected by fluctuations in the price and supply of natural and lab-created diamonds, gold and, to a much lesser extent, other precious and semi-precious metals and stones.
The Company’s goals provide a roadmap for Signet’s commitment to sustainability. Under the heading “Love for Our Team,” the Chief People Officer is responsible for fifteen critical goals in the areas of Employer of Choice, Community of Inclusiveness, and Purpose and Appreciation.
The Company’s CSGs provide a roadmap for Signet’s commitment to sustainability. Under the heading “Love for Our Team,” the Chief People Officer is responsible for critical CSGs in the areas of Employer of Choice, Community of Inclusiveness, and Purpose and Appreciation.
Some of these trademarks and trade names include the following: • Kay ® ; Kay Jewelers ® ; Kay Jewelers Outlet ® ; Jared ® ; Jared The Galleria Of Jewelry ® ; Jared ® ; Jared Foundry TM ; Every Kiss Begins with Kay ® ; Every Kiss TM ; Celebrate Life Express Love ® ; Leo ® ; the Leo Diamond ® ; Hearts Desire ® ; Chosen ® ; Ever Us ® ; James Allen ® ; Long Live Love ® ; Dare to be Devoted ® ; Love Brilliantly TM ; Brilliant Moments ® ; Closer Together ® ; Vibrant Shades™; Love’s Radiance Collection ® ; Forever Connected™; Bold Reflections®; Vault Rewards TM ; Diamonds Direct ® ; Your Love.
Some of these trademarks and trade names include the following: • Kay ® ; Kay Jewelers ® ; Kay Jewelers Outlet ® ; Jared ® ; Jared The Galleria Of Jewelry ® ; Jared Vault ® ; Jared Foundry TM ; Jared Atelier ® ; Every Kiss Begins with Kay ® ; Every Kiss TM ; Celebrate Life Express Love ® ; Leo ® ; The Leo Diamond TM ; Hearts Desire ® ; Chosen ® ; Ever Us ® ; James Allen ® ; Long Live Love ® ; Love Brilliantly ® ; Brilliant Moments ® ; Closer Together ® ; Vibrant Shades ® ; Love’s Radiance Collection ® ; Forever Connected™; Unstoppable Love ® ; Bold Reflections ® ; Vault Rewards ® ; Diamonds Direct ® ; Your Love.
Buying loose diamonds helps allow Signet’s buyers to gain a detailed understanding of the manufacturing cost structures and, in turn, leverage that knowledge to negotiating better prices for the supply of finished products. Signet continues to take steps to advance its vertical integration, which includes rough diamond sourcing and processing.
Buying loose diamonds helps allow Signet’s buyers to gain a detailed understanding of the manufacturing cost structures and, in turn, leverage that knowledge to negotiate better prices for the supply of finished products. Signet continues to take steps to advance its vertical integration, which includes natural and lab-created rough diamond sourcing and processing.
Additionally, the Company operates online through its digital banners, James Allen and Blue Nile, and through the jewelry subscription business Rocksbox, as well as each of the individual banner websites. Kay Jewelers (“Kay”) Kay is the largest specialty retail jewelry brand in the US based on sales. Kay operates in shopping malls, off-mall centers, outlet malls and online.
Additionally, the Company operates online through James Allen, Blue Nile and Rocksbox, as well as each of the individual banner websites. Kay Jewelers (“Kay”) Kay is the largest specialty retail jewelry brand in the US based on sales. Kay operates in shopping malls, off-mall centers, outlet malls and online.
Zales “The Diamond Store” is positioned as the style and self-expression fine jewelry authority, an emphasis on fashion-oriented bridal, gifting and self-purchase consumers offering a broad range of bridal, diamond solitaire, fashion jewelry and watches. Zales accounted for 18% of Signet’s consolidated sales in Fiscal 2023 (Fiscal 2022: 22%).
Zales is positioned as the style and self-expression fine jewelry authority, an emphasis on fashion-oriented bridal, gifting and self-purchase consumers offering a broad range of bridal, diamond solitaire, fashion jewelry and watches. Zales accounted for 18% of Signet’s consolidated sales in Fiscal 2024 (Fiscal 2023: 18%).
Of team members surveyed, 89% of Signet team members responded, "People here are treated fairly regardless of race” and 92% of Signet team members responded, “People here are treated fairly regardless of sexual orientation.” Furthermore, we recognize the diversity of our customers and strive to have a workforce that is representative of the communities where we live and work.
Of team members surveyed, 88% of Signet team members responded, "People here are treated fairly regardless of their race” and 91% of Signet team members responded, “People here are treated fairly regardless of their sexual orientation.” Furthermore, we recognize the diversity of our customers and strive to have a workforce that is representative of the communities where we live and work.
For example, Signet’s full-time team member retention increased 4 points in Fiscal 2023, at a time when the retail industry overall saw significant attrition. This matters because a Jewelry Consultant with 2+ years’ experience sells more than twice as much as a new Jewelry Consultant with tenure of 6 months or less.
For example, Signet’s full-time team member retention increased 3 points in Fiscal 2024, at a time when the retail industry overall saw significant attrition. This matters because a jewelry consultant with 2+ years’ experience sells more than twice as much as a new jewelry consultant with tenure of six months or less.
Samuel and Ernest Jones. Certain Company activities are managed in the “Other” segment for financial reporting purposes, including the Company’s diamond sourcing function and its diamond polishing factory in Botswana. See Note 5 of Item 8 for additional information regarding the Company’s reportable segments. Competition and Signet Competitive Strengths Jewelry retailing is highly fragmented and competitive.
Samuel and Ernest Jones. Certain Company activities are managed in the “Other” segment for financial reporting purposes, primarily the Company’s diamond sourcing operation and its diamond polishing factory in Botswana. See Note 5 of Item 8 for additional information regarding the Company’s reportable segments. Competition and Signet’s Competitive Strengths Jewelry retailing is highly fragmented and competitive.
At the Company level, Signet’s Climate Action and Sustainability Committee (“CASC”) is a cross-functional committee with leaders across Signet’s business operations with the mandate of improving Signet’s data disclosures on climate and monitoring the progress of Signet’s climate-related Corporate Sustainability Goals.
At the Company level, Signet’s Climate Action and Sustainability Committee is a cross-functional committee with leaders across Signet’s business operations with the mandate of improving Signet’s data disclosures on climate and monitoring the progress of Signet’s climate-related CSGs.
Blue Nile brings a lower overall price mix than James Allen, but a higher engagement ring ticket, and complements James Allen with an older demographic focused on luxury purchases, all of which is immediately additive to the top of Signet’s customer funnel. Digital pure-play banners accounted for 7% of Signet’s consolidated sales in Fiscal 2023 (Fiscal 2022: 5%).
Blue Nile brings a lower overall price mix than James Allen, but a higher engagement ring ticket, and complements James Allen with an older demographic focused on luxury purchases, all of which has been immediately additive to the top of Signet’s customer funnel. Digital banners accounted for 9% of Signet’s consolidated sales in Fiscal 2024 (Fiscal 2023: 7%).
This minimizes exposure to changes in fashion trends and provides the flexibility for the Company to return non-performing merchandise to vendors. The bulk of Signet’s consignment inventory is held in the US.
This minimizes exposure to changes in fashion trends and provides the flexibility for the Company to return non-performing merchandise to vendors. The bulk of Signet’s consignment inventory is held in the North America reportable segment.
UK In the UK, the jewelry and watch market was about £6.4 billion in 2022 based on the average of estimates published by Euromonitor in February 2023, Statista in June 2022 and Mintel in August 2022. This was up approximately 9% over the prior year.
UK In the UK, the jewelry and watch market was about £6.7 billion in 2023 based on the average of estimates published by Euromonitor in February 2024, Statista in January 2024 and Mintel in August 2022. This was up approximately 6% over the prior year.
Services carry higher margin profiles, and Signet is focused on introducing consumer-driven services including personalization as well as expanding existing services such as Extended Service Plans and repair services to enhance the jewelry ownership experience.
Services carry higher margin profiles, and Signet is focused on introducing consumer-driven services including personalization as well as expanding existing services such as Extended Service Plans and repair services to enhance the jewelry ownership experience. In Fiscal 2024, the Company acquired Service Jewelry & Repair, Inc.
In Fiscal 2023, approximately 20% of sales were completed online and 75% of customers reported that they used a banner website prior to completing their purchase, which indicates that Signet customers now use both online and in-store experiences as part of their shopping journey.
In Fiscal 2024, approximately 23% of sales were completed online and 78% of in-store buyers reported that they used a banner website prior to completing their purchase, which indicates that Signet customers now use both online and in-store experiences as part of their shopping journey.
Details of gross advertising (i.e. advertising before vendor contributions) by segment is shown below: Fiscal 2023 Fiscal 2022 Fiscal 2021 (in millions) Gross advertising spending as a % of sales Gross advertising spending as a % of sales Gross advertising spending as a % of sales North America $ 536.4 7.4 % $ 508.6 7.0 % $ 329.5 6.8 % International 19.2 4.1 % 18.4 3.7 % 13.5 3.8 % Signet $ 555.6 7.1 % $ 527.0 6.7 % $ 343.0 6.6 % Other sales and services The Company offers repair services to its customers that include both merchandise repairs and custom design services.
Details of gross advertising (i.e. advertising before vendor contributions) by segment is shown below: Fiscal 2024 Fiscal 2023 Fiscal 2022 (in millions) Gross advertising spending as a % of sales Gross advertising spending as a % of sales Gross advertising spending as a % of sales North America $ 508.8 7.6 % $ 536.4 7.4 % $ 508.6 7.0 % International 14.0 3.3 % 19.2 4.1 % 18.4 3.7 % Signet $ 522.8 7.3 % $ 555.6 7.1 % $ 527.0 6.7 % 12 Table of Contents Services The Company offers repair services to its customers that include both merchandise repairs and custom design services.
Below is a summary of the payment participation rate in North America which reflects activity for Signet’s outsourced credit program in North America, for Kay, Jared, Zales and Banter customers, as well as lease purchase customers: 13 Table of Contents (dollars in millions) Fiscal 2023 Fiscal 2022 Total North America sales (1) $ 6,189.8 $ 6,700.2 Credit, lease and Affirm purchase sales $ 2,734.2 $ 2,739.9 Credit, lease and Affirm purchase sales as % of total eligible North America sales (1) 44.2 % 40.9 % (1) Excludes Diamonds Direct, digital banners and Rocksbox, as these banners do not participate in the Company’s financing programs discussed above.
Below is a summary of the payment participation rate in North America which reflects activity for Signet’s outsourced credit program in North America for Kay, Jared, Zales and Banter customers, as well as lease purchase customers: (dollars in millions) Fiscal 2024 Fiscal 2023 Total North America sales (1) $ 5,599.6 $ 6,189.8 Credit, lease and Affirm purchase sales $ 2,463.0 $ 2,734.2 Credit, lease and Affirm purchase sales as % of total eligible North America sales (1) 44.0 % 44.2 % (1) Excludes Diamonds Direct, digital banners and Rocksbox, as these banners do not participate in the Company’s financing programs discussed above.
Signet continues to drive penetration in accessible luxury and move customers up the value chain across its banners by tiering up its assortment and leading category product and services innovation while also continuing to innovate for value-conscious customers by value-engineering new products in its assortment, leveraging scaled vertical integration in the supply chain, and by continuing to cut costs that customers don't see or care about. • Accelerate Services: Signet is positioned to create a $1 billion revenue stream through services - up $600 million from Fiscal 2020 - as well as expand its known customer base and first party data with the “Vault Rewards” loyalty program.
Signet also continues to innovate for value-conscious customers by value-engineering new products in our assortment, leveraging scaled vertical integration in the supply chain and continuing to cut costs that customers don't see or care about. • Accelerate Services : Signet is positioned to create a $1 billion revenue stream through services - up $600 million from Fiscal 2020 - as well as expand its known customer base and first party data with the “Vault Rewards” loyalty program.
A full list of Signet’s goals is published on the Company’s corporate website and an annual progress report on the goals is included in the Company’s annual Corporate Citizenship and Sustainability report. Employees and demographics As of January 28, 2023, the number of global team members employed at Signet was 29,660 as compared to 30,856 at January 29, 2022.
A full list of Signet’s CSGs is published on the Company’s corporate website and an annual progress report on the CSGs is included in the Company’s annual Corporate Citizenship and Sustainability report. Employees and demographics As of February 3, 2024, the number of global team members employed at Signet was 27,991 as compared to 29,660 at January 28, 2023.
Peoples Jewellers (“Peoples”) Peoples is Canada’s largest specialty jewelry retailer and is positioned as “Canada’s #1 Diamond Store” emphasizing its diamond business while also offering a wide selection of gold jewelry, gemstone jewelry and watches. Peoples operates primarily in shopping malls and online.
Peoples Jewellers (“Peoples”) Peoples is Canada’s largest specialty jewelry retailer and is positioned as “Canada’s #1 Diamond Store” emphasizing its diamond business while also offering a wide selection of gold jewelry, gemstone jewelry and watches. Peoples operates primarily in shopping malls and online. Peoples accounted for 3% of Signet’s consolidated sales in Fiscal 2024 (Fiscal 2023: 3%).
The segment had 2,382 locations in the US and 93 locations in Canada as of January 28, 2023. ◦ In the US, the segment operates under the following banners: Kay (Kay Jewelers and Kay Outlet); Zales (Zales Jewelers and Zales Outlet); Jared (Jared The Galleria Of Jewelry and Jared Vault); Banter by Piercing Pagoda; Diamonds Direct; Rocksbox; and digital banners, James Allen and Blue Nile. ◦ In Canada, the segment primarily operates under the Peoples banner (Peoples Jewellers). • The International reportable segment had 333 locations in the UK, Republic of Ireland and Channel Islands as of January 28, 2023, as well as maintains an online retail presence for its principal banners, H.
The segment had 2,319 locations in the US and 92 locations in Canada as of February 3, 2024. ◦ In the US, the segment operates under the following banners: Kay (Kay Jewelers and Kay Outlet); Zales (Zales Jewelers and Zales Outlet); Jared (Jared The Galleria Of Jewelry and Jared Vault); Banter by Piercing Pagoda; Diamonds Direct; Rocksbox; and digital banners, James Allen and Blue Nile. ◦ In Canada, the segment operates under the Peoples banner (Peoples Jewellers). • The International reportable segment had 287 locations in the UK, Republic of Ireland and Channel Islands as of February 3, 2024, and maintains an online retail presence for its principal banners, H.
According to the latest data from the Jewelers Board of Trade, as of December 2022 there were approximately 17,900 jewelry stores in the country, down 2% from the prior year.
According to the latest data from the Jewelers Board of Trade, as of December 2023 there were approximately 17,600 jewelry stores in the US, down approximately 2% from the prior year.
In Fiscal 2023, we introduced our Vault Rewards loyalty program across Kay, Zales and Jared, which is a program that provides its members with benefits and offers once enrolled. As of the end of Fiscal 2023, the Company has over 1.5 million members enrolled in this program.
In Fiscal 2023, Signet introduced the Vault Rewards loyalty program online and across Kay, Zales and Jared, which is a program that provides its members with benefits and offers once enrolled. As of the end of Fiscal 2024, the Company had over 5.2 million members enrolled in this program.
This implies a Signet jewelry and watch market share of 9.7%, a 40 basis-points increase from the previous year. Since 2013, the industry average annual growth rate is 2%. Around 85% of the market is represented by jewelry, with the balance being attributable to watches.
This implies a Signet jewelry and watch market share of 9.0%, a 70 basis-points decline from the previous year. Since 2013, the industry average annual growth rate has been flat. Around 85% of the market is represented by jewelry, with the balance being attributable to watches.
Of note, loyalty members are already showing higher purchase frequency and average transaction values (“ATV”) than non-loyalty customers offering meaningful growth potential. • Lead Digital Commerce: Digital innovation and capabilities are integral to the future of jewelry retail and is a cornerstone of Signet’s growth strategy.
Of note, loyalty members display higher purchase frequency and transaction values than non-loyalty customers offering meaningful growth potential. • Lead Digital Commerce: Digital innovation and capabilities are integral to the future of jewelry retail and are cornerstones of Signet’s growth strategy.
Kay is positioned as the champion of modern love and gratitude, the #1 US jeweler for bridal and all occasion-based gifting offering a broad assortment of fine jewelry including bridal, diamond solitaire, fashion jewelry and watches.
Kay is positioned as the champion of modern love and gratitude, the #1 US jeweler for bridal and all occasion-based gifting offering a broad assortment of fine jewelry including bridal, diamond solitaire, fashion jewelry and watches. Kay accounted for 36% of Signet’s consolidated sales in Fiscal 2024 (Fiscal 2023: 36%).
AVAILABLE INFORMATION Signet files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information with the US Securities and Exchange Commission (“SEC”).
AVAILABLE INFORMATION Signet files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information with the SEC.
Signet has also established a diamond liaison office in India and a diamond trading office in New York to further support its sourcing initiative. Rough diamonds are purchased directly from the miners and then the stones are marked, cut and polished in Signet’s own polishing facility.
The Company is a DeBeers sightholder and receives contracted allocations of rough diamonds. Signet has also established a diamond liaison office in India and a diamond trading office in New York to further support its sourcing operation. Natural rough diamonds are purchased directly from the miners and then the stones are marked, cut and polished in Signet’s own polishing facility.
North America Banners The North America reportable segment operates jewelry stores in malls, mall-based kiosks and off-mall locations throughout the US and Canada and online under national banners including Kay, Zales, Jared, Peoples, Banter by Piercing Pagoda and Diamonds Direct.
Refer to Item 2 for additional information on the Company’s real estate portfolio. North America Banners The North America reportable segment operates jewelry stores in malls, mall-based kiosks and off-mall locations throughout the US and Canada and online under national banners including Kay, Zales, Jared, Peoples, Banter by Piercing Pagoda and Diamonds Direct.
In Fiscal 2023, Signet continued to invest in our learning platform, Brilliant University, to support team member training, leadership development and education. The platform gives team members access to training modules from their very first day of employment.
More than 230 team member mentorship pairs were formed through the program in Fiscal 2024. In Fiscal 2024, Signet continued to invest in our learning platform, Brilliant University, to support team member training, leadership development and education. The platform gives team members access to training modules from their very first day of employment.
In addition, the Company has partnerships with third-party providers who directly extend financing to its customers, and who also manage and service the customers’ accounts. Refer to Note 13 of Item 8 for further information.
In addition, the Company has partnerships with third-party providers who directly extend financing to its customers, and who also manage and service the customers’ accounts.
The “Holiday Season” consists of results for the months of November and December, with December being the highest volume month of the year. 17 Table of Contents REGULATION As a company with both US and international operations, we are required to comply with numerous laws and regulations in the jurisdictions in which we operate, covering areas such as consumer protection, consumer privacy, data protection, consumer credit, consumer credit insurance, health and safety, waste disposal, supply chain integrity, truth in advertising and employment.
REGULATION As a company with both US and international operations, we are required to comply with numerous laws and regulations in the jurisdictions in which we operate, covering areas such as consumer protection, consumer privacy, data protection, consumer credit, consumer credit insurance, health and safety, waste disposal, supply chain integrity, truth in advertising and employment.
All of our product categories are to an extent dependent on the economic environment as customers can trade up or down price points depending on their available budget. Bridal represented 49% of Signet’s total merchandise sales and the fashion category represents 44% of Signet’s total merchandise sales during Fiscal 2023.
The bridal category, which includes engagement, wedding and anniversary purchases, is predominantly diamond jewelry. All of our product categories are to an extent dependent on the economic environment as customers can trade up or down price points depending on their available budget. During Fiscal 2024, bridal and fashion represented 50% and 44%, respectively, of Signet’s total merchandise sales.
This acquisition brings together James Allen, the world’s premier online retailer of fine diamonds and bridal jewelry, and Blue Nile, as Signet’s digital “pure-play” banners, to maximize and achieve meaningful operating synergies that will increase value for both our consumers and shareholders.
Blue Nile is a leading online retailer of engagement rings and fine jewelry. This acquisition brought together James Allen, the world’s premier online retailer of fine diamonds and bridal jewelry, and Blue Nile, as Signet’s digital banners, to maximize and achieve meaningful operating synergies that increases value for both our customers and shareholders.
We believe in “leadership at every level” and Brilliant University provides education and training for team members to learn more about what each trait looks like at different levels in the organization.
We believe in “leadership at every level” and Brilliant University provides education and training for team members to learn more about what each trait looks like at different levels in the organization. Benefits Competitive benefits are critical to our success in identifying, recruiting, retaining, and incentivizing our existing and prospective team members.
The Design & Service Centers also service the lifetime repair service plans for Kay, Zales and Jared, in addition to supporting the chargeable repairs and custom businesses.
The North America segment sells extended service plans covering lifetime repair service for jewelry and jewelry replacement plans in Banter. The Design & Service Centers also service the lifetime repair service plans for Kay, Zales and Jared, in addition to supporting the chargeable repairs and custom businesses.
Signet continues to invest in capabilities to enhance the customer experience to make it more personalized and journey focused. In Fiscal 2019, Signet implemented a multi-phase Voice of the Customer program utilizing the Net Promoter System as a component of its Path to Brilliance transformation plan and customer first initiatives.
Signet continues to invest in capabilities to enhance the customer experience to make it more personalized and journey-focused: • Signet introduced a Voice of the Customer program using the Net Promoter System during Fiscal 2019. This was part of the Company's Path to Brilliance transformation plan and customer-first initiatives.
Signet is demonstrating that it has the strategies, competitive advantages, and talent to consistently outpace the market and deliver reliable, long-term sustainable gro wth. 2030 Corporate Sustainability Goals As a company with a Board level Corporate Citizenship & Sustainability Committee focused on its corporate sustainability strategy, Environmental, Social and Governance (“ESG”) data disclosures, and a Purpose-inspired business strategy as described in the above Inspiring Brilliance section, Signet is committed to ongoing leadership in sustainability and ESG initiatives as an important growth driver that is critical to the health of our business.
Signet is demonstrating that it has the strategies, competitive advantages, and talent to consistently outpace the market and deliver reliable, long-term sustainable gro wth. 2030 Corporate Sustainability Goals As a company with a Board-level Corporate Citizenship & Sustainability Committee (the “CCS Committee”) focused on its corporate sustainability strategy, Environmental, Social and Governance (“ESG”) data disclosures, and a Purpose-inspired business strategy as described in the above Inspiring Brilliance section, Signet is committed to creating business and stakeholder value through sustainability and ESG initiatives, including the Company’s award-winning open-source Signet Responsible Sourcing Protocol.
Signet provides health plan benefits and voluntary life insurance for same-sex domestic partners/spouses and LGBTQ team members. Signet provides transgender benefits in line with insurance program best practices.
Signet provides health plan benefits and voluntary life insurance for same-sex domestic partners/spouses and LGBTQ team members. Signet provides transgender benefits in line with insurance program best practices. All full-time team members, regardless of gender, are eligible for paid parental leave benefits.
Signet’s objective with this initiative is to secure additional, reliable and consistent supplies of diamonds for customers worldwide while achieving further efficiencies in the supply chain. Signet owns a diamond polishing factory in Gaborone, Botswana. The Company is a DeBeers sightholder and receives contracted allocations of rough diamonds.
Signet’s objective with this initiative is to secure additional, reliable and consistent supplies of diamonds for customers worldwide while achieving further efficiencies in the supply chain. Signet contracts with factories in India for polishing of rough lab-created diamonds it procures from producers. Signet owns a natural diamond polishing factory in Gaborone, Botswana.
Signet has specific operating and financial criteria that must be satisfied before investing in new stores or renewing leases on existing stores, including evaluation of the mall/trade area and market potential.
Signet has specific operating and financial criteria that must be satisfied before investing in new stores or renewing leases on existing stores, including evaluation of the mall/trade area and market potential. Signet continues to rationalize its store footprint in a manner that it believes will drive greater store productivity.
Signet transacts business with suppliers on a worldwide basis at various stages of the supply chain with third party diamond cutting and jewelry manufacturing being predominantly carried out in Asia.
Suppliers In Fiscal 2024, the five largest suppliers collectively accounted for approximately 20% of total purchases, with the largest supplier comprising approximately 5%. Signet transacts business with suppliers on a worldwide basis at various stages of the supply chain with third party diamond cutting and jewelry manufacturing being predominantly carried out in Asia.
Any stones deemed unsuitable for Signet’s needs are sold to third-parties on the open market. Marketing and advertising Marketing is one of Signet’s most critical investments. It generates customer awareness, drives purchase considerations, and over time strengthens consumer lifetime value and drives share growth.
Any stones deemed unsuitable for Signet’s needs are sold to third parties on the open market. Marketing and advertising Marketing is one of Signet’s most critical investments. The Company leverages its marketing spend to drive customer awareness, purchase consideration, traffic, and revenue in the short-term, and customer loyalty, lifetime value and market share growth over time.
None of our employees in the UK and North America are covered by collective bargaining agreements. 16 Table of Contents Board oversight Signet’s Human Capital Management and Compensation Committee plays an active role in overseeing our human capital management efforts.
Our diamond polishing factory employees in Gaborone, Botswana are covered by a collective bargaining agreement (represents less than 1% of Signet’s total employees). None of our employees in the UK and North America are covered by collective bargaining agreements. Board oversight Signet’s Human Capital Management & Compensation (“HCM”) Committee plays an active role in overseeing our human capital management efforts.
Kay accounted for 36% of Signet’s consolidated sales in Fiscal 2023 (Fiscal 2022: 38%). 9 Table of Contents Zales Jewelers (“Zales”) Zales is the third largest specialty retail jewelry brand in the US, based on sales. Zales operates primarily in shopping malls, outlet malls, neighborhood power centers and online.
Zales Jewelers (“Zales”) Zales is the third largest specialty retail jewelry brand in the US based on sales. Zales operates primarily in shopping malls, outlet malls, neighborhood power centers and online.
Adverse effects of climate change may increase the costs of diamond mining and diamond processing including cutting and polishing. Signet sources diamonds from around the world, and some locations may be more vulnerable to climate change. If the costs of natural diamonds increase, Signet may reallocate sourcing to lab-grown diamonds in line with customer preferences for cost and quality.
Adverse effects of climate change may increase the costs of diamond mining and diamond processing including cutting and polishing. Signet sources diamonds from around the world, and some locations may be more vulnerable to climate change than others.
These Design & Service Centers are staffed with skilled artisans who support the repair and custom business generated in the Kay, Zales and Jared banners. Signet’s custom jewelry sales use a proprietary computer selling system and in-store design capabilities. The North America segment sells extended service plans covering lifetime repair service for jewelry and jewelry replacement plans in Banter.
These Design & Service Centers are staffed with skilled artisans who support the repair and custom business generated in the Kay, Zales and Jared banners. Repairs are completed in less than four days on average. Signet’s custom jewelry sales use a proprietary computer selling system and in-store design capabilities.
Our Passion ® ; Rocksbox ® ; and Blue Nile ® . • Zales ® ; Zales Jewelers™; Zales the Diamond Store ® ; Zales Outlet ® ; Gordon’s Jewelers ® ; Peoples Jewellers ® ; Peoples the Diamond Store ® ; Peoples Outlet the Diamond Store ® ; Piercing Pagoda ® ; Banter™; Arctic Brilliance ® ; Arctic Brilliance Canadian Diamonds ® ; Celebration Diamond ® ; Celebration Ideal™; Celebration Infinite TM ; From This Moment ® ; Let Love Shine ® ; Live for Love TM ; The Celebration Diamond Collection ® ; Unstoppable Love ® ; Endless Brilliance ® ; Love’s Destiny ® ; Zales Private Collection™; and Elegant Reflections ® . • H.Samuel ® ; Ernest Jones ® ; Ernest Jones Outlet Collection TM ; Forever Diamonds ® ; Princessa Collection ® ; Secrets of the Sea ® ; It Feels Good To Gift TM ; The Eternal Diamond – Cut From The Stars ® ; H Samuel Style to Make You Smile ® ; and Celebrate Your Story ® .
Our Passion ® ; Rocksbox ® ; and Blue Nile ® . • Zales ® ; Zales Jewelers™; Zales the Diamond Store ® ; Zales Outlet ® ; Gordon’s Jewelers ® ; Peoples Jewellers ® ; Peoples the Diamond Store ® ; Peoples Outlet the Diamond Store ® ; Piercing Pagoda ® ; Banter ® ; Arctic Brilliance ® ; Arctic Brilliance Canadian Diamonds ® ; Celebration Diamond ® ; Celebration Ideal ® ; Celebration Infinite ® ; Live for Love TM ; The Celebration Diamond Collection ® ; Endless Brilliance ® ; Zales Private Collection™; and Elegant Reflections ® . • H.Samuel ® ; Ernest Jones ® ; Ernest Jones Outlet Collection TM ; Forever Diamonds ® ; Princessa Collection ® ; Secrets of the Sea ® ; It Feels Good To Gift TM ; The Eternal Diamond – Cut From The Stars ® ; H Samuel Style to Make You Smile ® ; Celebrate Your Story ® ; and Origin by Ernest Jones ® . 17 Table of Contents SEASONALITY Signet’s business is seasonal, with the fourth quarter historically accounting for approximately 35-40% of annual sales, as well as for a substantial portion of the annual operating profit.
MARKETS Signet operates in the US, Canada and UK markets. US Based on industry and transaction data from MasterCard and market research company The NPD Group, we estimate that the total US jewelry and watch market declined by 5% in 2022, from $69 billion in the prior year to $65 billion in 2022.
US Based on industry and transaction data from MasterCard Spending Pulse and market research company Circana, we estimate that the total US jewelry and watch market declined by 3% in 2023, from $65 billion in the prior year to $63 billion in 2023.
Canada The average of the most recent Canada jewelry and watch market estimates published by Euromonitor in December 2022 and Statista in June 2022 was approximately $5.7 billion CAD (adjusted to exclude Quebec), an increase of 5% from the previous year .
Canada The average of the most recent Canada jewelry and watch market estimates published by Euromonitor in February 2024 and Statista in January 2024 was approximately $6.5 billion CAD (adjusted to exclude Quebec), an increase of 6% from the previous year. Since 2018, based the average of the of the above sources, the industry annual growth rate has been 5%.
The full Board has worked closely with the executive management team, particularly the Chief People Officer, in helping shape the succession plans and leadership development agenda. Board oversight activities in this area include review of CEO and executive officer succession planning, review of diversity and other employee metrics, employee experience, and review of the Company's employee engagement survey results.
Board oversight activities in this area include review of Chief Executive Officer and executive officer succession planning, review of diversity and other employee metrics, employee experience, and review of the Company's employee engagement survey results.
In addition to standard medical coverage, we offer eligible team members dental and vision coverage, health savings, flexible spending accounts, hospital indemnity and accident insurance, pet insurance, home and auto insurance, paid time off, employee assistance programs, short-term and long-term disability insurance, group term and voluntary life insurance for team members and their families and a 401(k) Savings Plan in the US.
In addition to the benefits mentioned above for all full-time team members enrolled in the medical coverage, we offer dental and vision coverage, health savings accounts, flexible spending accounts, hospital indemnity, critical and accident insurance, short-term and long-term disability insurance, group term and voluntary life insurance for team members and their families.
The execution of our Inspiring Brilliance business strategy is supported by our confidence in the Signet team and our commitment to their overall success and personal growth. We believe that thriving and engaged team members are integral to Signet’s success. Our emphasis on rewarding our retail team members with competitive wages and benefits provides a compelling package.
The execution of our Inspiring Brilliance business strategy is supported by our confidence in the Signet team and our commitment to their overall success and personal growth. We believe that thriving and engaged team members are integral to Signet’s success. By focusing on strong people practices, we foster improved retention rates and a better-trained workforce to delight our customers.
For example, coupling new digital capabilities together with a 21% reduction in store fleet (net of openings and acquisitions) resulted in an increase in s ales per square foot on an annual basis of nearly 50%, and drove approximately 500 basis points of efficiency in store occupancy costs since the beginning of our transformation.
For example, coupling new digital capabilities together with a more than 500 store reduction in our fleet (net of openings and acquisitions) since Fiscal 2020, has driven a more than 30% increase to s ales per square foot on an annual basis .
The following represents further information about the diversity of our Signet team as of the end of Fiscal 2023: Total Male Female Nonbinary/ chose not to identify Non-BIPOC BIPOC Board 12 58 % 42 % — % 83 % 17 % Signet Leadership Team 21 43 % 57 % — % 90 % 10 % VP and Above (Support Center) (1) 152 59 % 41 % — % 86 % 14 % Directors and Above (Support Center) (1) 388 49 % 51 % — % 83 % 17 % Assistant Manager and Above (Retail Stores) (1) 5,482 25 % 75 % — % 64 % 36 % (1) North America, excludes Blue Nile In response to the Fiscal 2023 Great Place to Work®Trust Index© Employee Survey, Signet team members responded positively to statements regarding fair treatment in our Company.
The following represents further information about the diversity of our Signet team as of the end of Fiscal 2024: Total Male Female Chose not to identify Non-BIPOC BIPOC Board 12 58.0 % 42.0 % — % 83.0 % 17.0 % Signet Leadership Team 22 40.9 % 59.1 % — % 81.8 % 18.2 % VP and Above (Support Center) (1) 158 60.1 % 39.9 % — % 85.4 % 14.6 % Directors and Above (Support Center) (1) 427 43.1 % 56.9 % — % 82.9 % 17.1 % Assistant Manager and Above (Retail Stores) (1) 5,406 25.4 % 74.3 % 0.3 % 62.9 % 37.1 % (1) North America In response to the Fiscal 2024 Great Place to Work ® Trust Index TM Survey, Signet team members responded positively to statements regarding fair treatment in our Company.
Similarly, sales per labor hour in core banners increased approximately 47% and inventory turnover improved nearly 40% since Fiscal 2020. • Culture of Innovation and Agility : Signet has transformed its culture – achieving three consecutive years of being named a Great Place to Work-Certified™ Company and improved scores in its Voice of the Employer survey, including how team members feel their work contributes to Signet’s purpose (up 28 points) and that they believe in our strategy (up 15 points).
Similarly, sales per labor hour in core banners increased approximately 49% and inventory turnover improved nearly 40% since Fiscal 2020. • Culture of Innovation and Agility : Signet has transformed its culture – achieving four consecutive years of being named a Great Place to Work-Certified™ company.
Signet is a member of the UN Global Compact and adheres to its principles-based approach to responsible business. The Company has named a Chief ESG Officer, and under the leadership of the Chief Executive Officer, the entire Signet Leadership Team is engaged to provide governance and accountability on the Company’s goals.
Signet is a member of the UN Global Compact and adheres to its principles-based approach to responsible business. The Signet Leadership Team is engaged to provide governance and accountability for the Company’s CSGs with leaders throughout the Company engaged in the Company’s sustainability efforts.
International Banners The International reportable segment operates primarily in the UK and Republic of Ireland. The International segment transacts mainly in British pounds, as sales and the majority of operating expenses are incurred in that currency. H.Samuel H.Samuel has 150 years of jewelry heritage, with a target customer focused on lower-price point fashion-trend oriented, everyday jewelry.
International Banners The International reportable segment operates primarily in the UK and Republic of Ireland. H.Samuel H.Samuel has over 150 years of jewelry heritage, with a target customer focused on lower-price point fashion-trend oriented, everyday jewelry. H.Samuel continues to focus on larger store formats in regional shopping centers.
The Company launched its “Vault Rewards” loyalty program this past year across Jared, Kay and Zales which now has approximately 1.5 million members and is showing strong month-to-month growth.
During Fiscal 2023, the Company launched the Vault Rewards loyalty program online and across Jared, Kay and Zales which now has over 5.2 million members and is showing strong month-to-month growth.
Two Board level committees at Signet are responsible for monitoring climate change risks: (1) the Audit Committee oversees risks across the Company; and (2) the Corporate Citizenship and Sustainability Committee oversees enterprise-wide policy regarding Signet’s 2030 Corporate Sustainability Goals, including Signet’s aspiration to shift business operations to achieve net-zero greenhouse gas emissions by 2050.
Two Board-level committees at Signet are responsible for monitoring climate change risks: (1) the Audit Committee oversees risks across the Company; and (2) the CCS Committee oversees enterprise-wide policy regarding Signet’s 2030 CSGs, including Signet’s aspiration to decrease greenhouse gas emissions and the CCS Committee oversees opportunities and risks that may significantly impact the Company’s CSGs and ESG objectives and related initiatives.
These seamless, friction-free experiences lead to higher ATV and stronger conversion rates than a traditional OmniChannel strategy. In addition, the Company is leveraging AI, machine learning and data-driven insights in many operational parts of its business such as inventory distribution, labor planning and real estate fleet optimization.
In addition, the Company is leveraging AI, ML and data-driven insights in many operational parts of its business such as inventory distribution, labor planning and real estate fleet optimization.
The Company operated 2,808 stores and kiosks as of January 28, 2023, which when combined with the Company’s digital capabilities under its Connected Commerce strategy, provides customers the opportunity to use both online and in-store experiences as part of their shopping journey.
Signet is incorporated in Bermuda and its address and telephone number are shown on the cover of this document. The Company operated 2,698 retail locations as of February 3, 2024, which when combined with the Company’s digital capabilities under its Connected Commerce strategy, provides customers the opportunity to use both online and in-store experiences as part of their shopping journey.
(2) Includes mall-based kiosks for the Banter by Piercing Pagoda banner. (3) Includes 23 locations acquired from Blue Nile in Fiscal 2023 and 22 Diamonds Direct off-mall locations acquired in Fiscal 2022 as described in Note 4 of Item 8. Refer to Item 2 for additional information on the Company’s real estate portfolio.
(2) Includes mall-based kiosks for the Banter by Piercing Pagoda banner. (3) Includes 16 stores from the divestiture of the UK prestige watch business as described in Note 4 of Item 8. (4) Includes 23 locations acquired from Blue Nile in Fiscal 2023 as described in Note 4 of Item 8.
The cost of raw materials is only part of the costs involved in determining the retail selling price of jewelry, with labor costs and assembly costs from third-party vendors also being significant factors.
The cost of raw materials is only part of the costs involved in determining the retail selling price of jewelry, with labor costs and assembly costs from third-party vendors also being significant factors. 11 Table of Contents Diamond sourcing Signet procures its diamonds mostly as finished jewelry and, to a smaller extent, as loose polished diamonds and rough diamonds which are in turn polished.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese actions have a significant effect on macroeconomic conditions, give rise to regional instability and result in heightened economic sanctions from the US and the international community in a manner that adversely affects our business, and on an individual level, may impact the Company’s ability to manufacture and ship its merchandise for sale to customers. 21 Table of Contents Given that Signet’s control over such issues, including both weather disasters and large-scale violence, is extremely limited, the Company may not have the ability to mitigate the impacts of such occurrences on its business and operations.
Biggest changeVolatile geopolitical conditions give rise to regional instability and may result in heightened economic sanctions from the US and the international community in a manner that 21 Table of Contents adversely affects Signet’s business and may impact its ability to manufacture and ship its merchandise for sale to customers.
Consumer spending may be significantly affected by many factors outside of our control, including general economic conditions; consumer disposable income; consumer confidence; wage and unemployment levels; unexpected trends in merchandise demand; a decline in engagement or marriage rates in the regions in which we operate; significant competitive and promotional activity by other retailers; the availability, cost and level of consumer debt; inflationary pressures; the increase in general price levels; domestic and global supply chain issues; the costs of basic necessities and other goods; effects of weather and natural disasters, whether caused by 19 Table of Contents climate change or otherwise; epidemics, contagious disease outbreaks, pandemics and other public health concerns, including those related to COVID-19 (including variants); or lockdowns of our stores, support centers or distribution centers due to governmental mandates, the Russia-Ukraine war or social unrest.
Consumer spending may be significantly affected by many factors outside of our control, including general economic conditions; consumer disposable income; consumer confidence; wage and unemployment levels; unexpected trends in merchandise demand; a decline in engagement or marriage rates in the regions in which we operate; significant competitive and promotional activity by other retailers; the availability, cost and level of consumer debt; inflationary pressures; the increase in general price levels; domestic and global supply chain issues; the costs of basic necessities and other goods; effects of weather and natural disasters, whether caused by climate change or otherwise; epidemics, contagious disease outbreaks, pandemics and other public health concerns, including those related to COVID-19 (including variants); or lockdowns of our stores, support centers or distribution centers due to governmental mandates, the Russia-Ukraine war or social unrest.
Furthermore, other costs and expenses resulting from criminal activity such as increased security costs and measures to prevent such activity, increased repair costs and increased costs to retain, replace or recruit team members that may be concerned about future crime impacting our stores or the shopping centers they operate in may also adversely impact our reputation, operations and financial condition.
Furthermore, other costs and expenses resulting from criminal activity such as increased security costs and measures to prevent such activity, increased repair costs and increased costs to protect, retain, replace or recruit team members that may be concerned about future crime impacting our stores or the shopping centers they operate in may also adversely impact our reputation, operations and financial condition.
In addition, the current Kimberley Process decision-making procedure is dependent on reaching a consensus among member governments, which can result in the protracted resolution of issues, and there is little expectation of significant reform over the long-term. The impact of this review process on the supply of diamonds, and consumers’ perception of the diamond supply chain, is unknown.
In addition, the current Kimberley Process decision-making procedure is dependent on reaching a consensus among member governments, which can result in the protracted resolution of issues, and there is little expectation of significant reform over the long-term. The impact of this review process on the supply of natural diamonds, and consumers’ perception of the diamond supply chain, is unknown.
Until acceptable alternative sources of diamonds can be developed, any sustained interruption in the supply of diamonds from significant producing countries, or to the trading in rough and polished diamonds which could occur as a result of disruption to the Kimberley Process, could adversely affect Signet, as well as the retail jewelry market as a whole.
Until acceptable alternative sources of diamonds can be developed, any sustained interruption in the supply of natural diamonds from significant producing countries, or to the trading in rough and polished diamonds which could occur as a result of disruption to the Kimberley Process, could adversely affect Signet, as well as the retail jewelry market as a whole.
Terrorism, armed conflict, and acts of war (or the expectation of such events), both in the US and abroad, could also have a significant impact on Signet’s business and the worldwide economy. At times throughout the past several years, volatile conditions have impacted the financial markets.
Terrorism, armed conflict, and acts of war (or the expectation of such events), both in the US and abroad, could also have a significant impact on Signet’s business and the worldwide economy. At times throughout the past several years, volatile geopolitical conditions have impacted the financial markets.
Other factors that could affect the Company’s inventory management and planning team’s ability to accurately forecast customer demand for its products include: • a substantial increase or decrease in demand for products of Signet’s competitors; 23 Table of Contents • failure to accurately forecast trends and customer acceptance for new products; • new product introductions, promotions or pricing strategies by competitors, particularly during holiday periods; • changes in the Company’s product offerings including seasonal items and the Company’s ability to replenish these items in a timely manner; • changes to the Company’s overall seasonal promotional cadence and the number and timing of promotional events and clearance sales; • more limited historical store sales information for stores in newer markets; • weakening of economic conditions or consumer confidence in the future, which could reduce demand for discretionary items, such as jewelry; and • acts or threats of war or terrorism or epidemics, which could adversely affect consumer confidence and spending or interrupt production and distribution of Signet’s products and raw materials.
Other factors that could affect the Company’s inventory management and planning team’s ability to accurately forecast customer demand for its products include: • a substantial increase or decrease in demand for products of Signet’s competitors; • failure to accurately forecast trends and customer acceptance for new products; • new product introductions, promotions or pricing strategies by competitors, particularly during holiday periods; • changes in the Company’s product offerings including seasonal items and the Company’s ability to replenish these items in a timely manner; • changes to the Company’s overall seasonal promotional cadence and the number and timing of promotional events and clearance sales; • more limited historical store sales information for stores in newer markets; • weakening of economic conditions or consumer confidence in the future, which could reduce demand for discretionary items, such as jewelry; and • acts or threats of war or terrorism or epidemics, which could adversely affect consumer confidence and spending or interrupt production and distribution of Signet’s products and raw materials.
Also, if future responses to verification requests by suppliers of any of the materials used in Signet’s products are inadequate or adverse, Signet’s ability to obtain merchandise may be impaired and its compliance costs may increase. It is possible that other minerals, such as diamonds, could be subject to similar disclosure requirements or rules in the future.
Also, if future responses to verification requests by suppliers of any of the materials used in Signet’s products are inadequate or adverse, Signet’s ability to obtain merchandise may be impaired and its compliance costs may increase. It is possible that other minerals, such as diamonds as noted above, could be subject to similar disclosure requirements or rules in the future.
If there is further deterioration of the economic conditions in the US, Canada, UK and Europe, or if the effects of inflation, interest rates, a recession, and reduced government stimulus programs begin to further impact consumer spending, especially in the mid-tier or accessible luxury point products, our future sales and earnings could be further adversely impacted.
If there is further deterioration of the economic conditions in the US, Canada, UK and Europe, or if the effects of inflation, interest rates, a recession, and reduced government stimulus programs further impact consumer spending, especially in the mid-tier or accessible luxury point products, our future sales and earnings could be further adversely impacted.
In addition, if Signet’s online activities or other customer-facing technology systems do not function as designed or are deemed to not comply with applicable state and federal regulations concerning automated outbound contacts such as text messages and the sale, advertisement and promotion of the jewelry it sells, the Company may experience a loss of customer confidence, data security breaches, regulatory fines, lawsuits, lost sales or be exposed to fraudulent purchases.
In addition, if Signet’s online activities or other customer-facing technology systems do not function as designed or are deemed to not comply with applicable state and federal regulations concerning automated outbound contacts such as text messages and the sale, 26 Table of Contents advertisement and promotion of the jewelry it sells, the Company may experience a loss of customer confidence, data security breaches, regulatory fines, lawsuits, lost sales or be exposed to fraudulent purchases.
As discussed further in Note 13 to the consolidated financial statements in Item 8, Signet has outsourced its third-party credit programs, however, if any of those third-party credit providers were to terminate, Signet may need to enter into other arrangements with other third-parties.
As discussed further in Note 12 to the consolidated financial statements in Item 8, Signet has outsourced its third-party credit programs, however, if any of those third-party credit providers were to terminate, Signet may need to enter into other arrangements with other third-parties.
The gold supply chain is complex and, while management believes that the rules currently cover less than 1% of annual worldwide gold production (based upon recent estimates), the final rules require Signet (and other affected companies that file with the SEC) to make specified country of origin inquiries of Signet’s suppliers, and otherwise to exercise reasonable due diligence in determining the country of origin and certain other information relating to any of the statutorily designated minerals (gold, tin, tantalum and tungsten), that are used in products sold by Signet in the US and elsewhere.
The gold supply chain is complex and, while management believes that the rules currently cover less than 1% of annual worldwide gold production, the final rules require Signet (and other affected companies that file with the SEC) to make specified country of origin inquiries of Signet’s suppliers, and otherwise to exercise reasonable due diligence in determining the country of origin and certain other information relating to any of the statutorily designated minerals (gold, tin, tantalum and tungsten), that are used in products sold by Signet in the US and elsewhere.
Any significant deterioration in general economic conditions, including a potential recession, or increase in consumer debt levels may inhibit consumers’ use of credit and decrease consumers’ ability to satisfy requirements for access to customer financing or payment options, which could in turn have an adverse effect on the Company’s sales.
Any significant deterioration in general economic conditions, including a potential recession, or increase in consumer debt levels may inhibit consumers’ use of credit and decrease consumers’ ability to 19 Table of Contents satisfy requirements for access to customer financing or payment options, which could in turn have an adverse effect on the Company’s sales.
When evaluating 25 Table of Contents and making such changes, there can be no assurances that the Company will successfully implement such changes, that significant additional investments will not be required beyond the project budget, that such changes will occur without disruptions to its operations or maintenance of its internal control compliance programs or that the new or upgraded systems will achieve the desired business objectives.
When evaluating and making such changes, there can be no assurances that the Company will successfully implement such changes, that significant additional investments will not be required beyond the project budget, that such changes will occur without disruptions to its operations or maintenance of its internal control compliance programs or that the new or upgraded systems will achieve the desired business objectives.
Because a large portion of its financing is asset-based and secured, the Company’s ability to draw funds is dependent on 29 Table of Contents maintaining a sufficient borrowing base and it is subject to the risk of loss of such assets to foreclosure or sale to satisfy its debt obligations. Signet’s borrowing agreements include various financial and other covenants.
Because a large portion of its financing is asset-based and secured, the Company’s ability to draw funds is dependent on maintaining a sufficient borrowing base and it is subject to the risk of loss of such assets to foreclosure or sale to satisfy its debt obligations. Signet’s borrowing agreements include various financial and other covenants.
If the Company does not appropriately and adequately identify the use of the substitute products in its jewelry, its reputation and results could be adversely impacted. 24 Table of Contents New tariffs, trade embargoes, sanctions or other restrictions on foreign trade, if imposed on goods that the Company imports, could have an adverse effect on the Company’s results of operations.
If the Company does not appropriately and adequately identify the use of the substitute products in its jewelry, its reputation and results could be adversely impacted. New tariffs, trade embargoes, sanctions or other restrictions on foreign trade, if imposed on goods that the Company imports, could have an adverse effect on the Company’s results of operations.
As our sales are highly seasonal, a change in any one of these economic conditions during the Holiday Season could have an increased adverse impact on our sales. While Signet has a broad-based customer demographic, our largest banners primarily operate in the mid-market for jewelry.
As our sales are highly seasonal, a change in any one of these economic conditions during the Holiday Season could have an increased adverse impact on our 18 Table of Contents sales. While Signet has a broad-based customer demographic, our largest banners primarily operate in the mid-market for jewelry.
The monthly average exchange rates are used to prepare the statement of operations and are calculated based on the daily exchange rates experienced by the International segment and the Canadian subsidiaries of the North America segment in the fiscal month.
The monthly average exchange rates are used to prepare the statements of operations and are calculated based on the daily exchange rates experienced by the International segment and the Canadian subsidiaries of the North America segment in the fiscal month.
In addition, the prices of certain materials and products bought on the international markets by Signet are denominated in foreign currencies. As a result, Signet and its subsidiaries have exposures to exchange rate fluctuations on its cost of goods sold, as well as volatility of input prices if foreign manufacturers and suppliers are impacted by exchange rate fluctuations.
In addition, the prices of certain materials and products bought on the international markets by Signet are denominated in foreign currencies. As a result, Signet has exposures to exchange rate fluctuations on its cost of goods sold, as well as volatility of input prices if foreign manufacturers and suppliers are impacted by exchange rate fluctuations.
The jewelry industry generally is affected by fluctuations in the price and supply of natural diamonds, gold and, to a lesser extent, other precious and semi-precious metals and stones.
The jewelry industry generally is affected by fluctuations in the price and supply of natural and lab-created diamonds, gold and, to a lesser extent, other precious and semi-precious metals and stones.
Therefore, the Company’s results of operations and balance sheet are subject to fluctuations in the exchange rates between the US dollar and both the British pound and Canadian dollar. Accordingly, any decrease in the weighted average value of the British pound or Canadian dollar against the US dollar, including due to Brexit, would decrease reported sales and operating income.
Therefore, the Company’s results of operations and balance sheet are subject to fluctuations in the exchange rates between the US dollar and both the British pound and Canadian dollar. Accordingly, any decrease in the weighted average value of the British pound or Canadian dollar against the US dollar would decrease reported sales and operating income.
Signet will always prioritize legally required disclosures such as greenhouse gas emissions calculations over voluntary frameworks. Consequently, it is possible that we may fail to achieve our 2030 Corporate Sustainability Goals or that our customers, team members, investors, advocacy groups, government agencies or other stakeholders may not be satisfied with the goals we set or our efforts to achieve them.
Signet will always prioritize legally required disclosures such as greenhouse gas emissions calculations over voluntary frameworks. Consequently, it is possible that we may fail to achieve our 2030 CSGs or that our customers, team members, investors, advocacy groups, government agencies or other stakeholders may not be satisfied with the CSGs we set or our efforts to achieve them.
If management misjudges expected customer demand, fails to identify changes in customer demand, or its supply chain does not respond in a timely manner, a shortage of merchandise or an accumulation of excess inventory could occur, which could adversely impact Signet’s results.
If 23 Table of Contents management misjudges expected customer demand, fails to identify changes in customer demand, or its supply chain does not respond in a timely manner, a shortage of merchandise or an accumulation of excess inventory could occur, which could adversely impact Signet’s results.
If support ceased for a critical externally supplied software package or system, management would have to implement an alternative software package or system or begin supporting the software internally. Disruption to parts of the business could result in lower sales and increased costs.
If support ceased for a critical 25 Table of Contents externally supplied software package or system, management would have to implement an alternative software package or system or begin supporting the software internally. Disruption to parts of the business could result in lower sales and increased costs.
Such guidance consists of forward-looking statements subject to the risks and uncertainties described in this report and in Signet’s other public filings and public statements. Signet’s actual results may be below the provided guidance or the expectations of Signet’s investors and analysts, especially in times of economic uncertainty.
Such guidance consists of forward-looking statements subject to the risks and uncertainties described in this report and in Signet’s other public filings and public statements. Signet’s actual results may be below the provided guidance or the expectations of Signet’s investors and analysts, 29 Table of Contents especially in times of economic uncertainty.
The regulatory environment related to information security, data collection and privacy is becoming increasingly demanding, with new and changing requirements applicable to Signet’s business, including the General Data Protection Regulation and the California Consumer Privacy Act, and compliance with those requirements could result in additional costs, such as costs related to organizational 26 Table of Contents changes, implementing additional protection technologies, training employees and engaging consultants.
The regulatory environment related to information security, data collection and privacy is becoming increasingly demanding, with new and changing requirements applicable to Signet’s business, including the General Data Protection Regulation and the California Consumer Privacy Act, and compliance with those requirements could result in additional costs, such as costs related to organizational changes, implementing additional protection technologies, training employees and engaging consultants.
Previous COVID-19 restrictions caused disruptions in the number of people that were forming new intimate relationships. The effect of that disruption began to negatively impact sales of engagement rings in Fiscal 2023 and is expected to continue to affect those sales through at least the third quarter of Fiscal 2024.
Previous COVID-19 restrictions caused disruptions in the number of people that were forming new intimate relationships. The effect of that disruption began to negatively impact sales of engagement rings in Fiscal 2023 and is expected to continue to affect those sales through at least the fourth quarter of Fiscal 2025.
See the risk factor above titled “The outbreak of COVID-19 has had a significant adverse impact on our business, and this outbreak, as well as other public health crises or disease outbreaks, epidemics or pandemics, has and could continue to adversely impact our business, financial condition, results of operations and cash flows and could continue to exacerbate other risk factors.” regarding the potential adverse impact COVID-19 could have on the Company’s supply chain.
See the risk factor above titled “Public health crisis or disease outbreak, epidemic or pandemic, such as COVID-19 had and could continue to have a significant adverse impact on our business, and this outbreak, as well as other public health crises or disease outbreaks, epidemics or pandemics, has and could continue to adversely impact our business, financial condition, results of operations and cash flows and could continue to exacerbate other risk factors.” regarding the potential adverse impact COVID-19 or other public health crisis, disease or outbreak could have on the Company’s supply chain.
Further, the methodologies we use for reporting ESG data may be updated and our previously reported ESG data may be adjusted to reflect improvements in data that is available to us, changing assumptions, changes in our operations and other changes in circumstances.
Further, the methodologies we use for reporting ESG data may be 30 Table of Contents updated and our previously reported ESG data may be adjusted to reflect improvements in data that is available to us, changing assumptions, changes in our operations and other changes in circumstances.
A negative change in consumer attitudes toward jewelry could adversely impact Signet’s sales and earnings. In addition, transparency regarding substitute products such as lab-created diamonds is important to maintaining consumer confidence.
A negative change in consumer attitudes toward jewelry could adversely impact Signet’s sales and earnings. In addition, transparency 24 Table of Contents regarding substitute products such as lab-created diamonds is important to maintaining consumer confidence.
Additionally, a material increase in the supply of gem quality lab-created diamonds, combined with a material increase in consumer acceptance and demand thereof, has impacted and could continue to impact the cost and retail pricing of lab-created diamonds, and it may also impact the supply, cost and retail pricing of natural diamonds.
A material increase in the supply of gem quality lab-created diamonds, combined with a material increase in consumer acceptance and demand thereof, has impacted and could continue to impact the cost and retail pricing of lab-created and natural diamonds.
As a consequence, the diamond business is subject to various sovereign risks beyond Signet’s 22 Table of Contents control, such as changes in laws and policies affecting foreign trade and investment.
As a consequence, the diamond business is subject to various sovereign risks beyond Signet’s control, such as changes in laws and policies affecting foreign trade and investment.
These include economic conditions, and perceptions of such conditions by consumers, consumer confidence, level of customer traffic in shopping malls and other retail centers, employment, the level of consumers’ disposable income, business conditions, interest rates, consumer debt and asset values, availability of credit and levels of taxation for the economy as a whole and in international, regional and local markets where we operate.
These include economic conditions, and perceptions of such conditions by consumers, consumer confidence, employment, the level of consumers’ disposable income, business conditions, interest rates, consumer debt and asset values, availability of credit and levels of taxation for the economy as a whole and in international, regional and local markets where we operate.
If these tax laws, treaties or regulations were to change or any tax authority were to successfully challenge Signet’s assessment of the effects of such laws, treaties and regulations in any country, this could result in a higher effective tax rate on the Company’s taxable earnings, which could have a material adverse effect on the Company’s results of operations.
If these tax laws, treaties or regulations, including the recent Bermuda Corporate Income Tax Act of 2023, were to change or any tax authority were to successfully challenge Signet’s assessment of the effects of such laws, treaties and regulations in any country, this could result in a higher effective tax rate on the Company’s taxable earnings, which could have a material adverse effect on the Company’s results of operations.
Our financial performance is highly dependent on US consumer confidence and the health of the US economy. Inflation, increased interest rates, reduced government stimulus, shifts in spending toward travel and experiences, and general US consumer confidence have each had an effect on our revenue and earnings for the past twelve months.
Our financial performance is highly dependent on US consumer confidence and the health of the US economy. Inflation, changes in interest rates, reduced government stimulus, shifts in spending toward travel and experiences, and general US consumer confidence have each had an effect on our revenue and earnings.
To the extent that COVID-19 has affected and continues to adversely affect the US and global economy, our business, results of operations, cash flows, or financial condition, it has heightened, and may continue to heighten, other risks described herein. See the COVID-19 Update within Part I, Item 2.
To the extent that COVID-19 has affected and continues to adversely affect the US and global economy, our business, results of operations, cash flows, or financial condition, it has heightened, and may continue to heighten, other risks described herein.
At January 28, 2023, Signet held approximately 90% of its total assets in entities whose functional currency is the US dollar and generated approximately 91% of its sales in US dollars for the fiscal year then ended. All the remaining assets and sales are primarily in British pounds and Canadian dollars.
At February 3, 2024, Signet held approximately 91% of its total assets in entities whose functional currency is the US dollar and generated approximately 91% of its sales in US dollars for the fiscal year then ended. All the remaining assets and sales are primarily in British pounds and Canadian dollars.
The possibility of constraints in the supply of diamonds of a size and quality Signet requires to meet its merchandising requirements may result in changes in Signet’s supply chain practices, including for example its rough sourcing initiative.
The possibility of constraints in the supply of natural or lab-created diamonds of a size and quality Signet requires to meet its merchandising requirements may result in changes in Signet’s supply chain practices, including for example its rough sourcing operation.
Signet depends on manufacturers and suppliers to timely provide it with sufficient quantities of quality products. Ultimate delivery of Signet’s merchandise is substantially dependent upon third-party manufacturers and suppliers. In Fiscal 2023, the five largest suppliers collectively accounted for 15.3% of total purchases, with the largest supplier comprising 3.8%.
Signet depends on manufacturers and suppliers to timely provide it with sufficient quantities of quality products. Ultimate delivery of Signet’s merchandise is substantially dependent upon third-party manufacturers and suppliers. In Fiscal 2024, the five largest suppliers collectively accounted for 20.4% of total purchases, with the largest supplier comprising 4.9%.
The growth in importance of other branded merchandise within the jewelry market may adversely impact Signet’s sales and earnings if it is unable to obtain supplies of or further develop branded merchandise that the customer wishes to purchase.
In the case of Ernest Jones, the inability to replace lost sales could adversely impact sales growth. The growth in importance of other branded merchandise within the jewelry market may adversely impact Signet’s sales and earnings if it is unable to obtain supplies of or further develop branded merchandise that the customer wishes to purchase.
A public health crisis or disease outbreak, epidemic or pandemic, such as COVID-19, or the threat or fear of such an event, has adversely impacted and could continue to adversely impact our business.
A public health crisis or disease outbreak, epidemic or pandemic, such as COVID-19, or the threat or fear of such an event, has adversely impacted and could continue to adversely impact our business. COVID-19 significantly impacted consumer traffic and our retail sales during Fiscal 2021.
RISK FACTORS Risks Related to Global and Economic Conditions The outbreak of COVID-19 has had a significant adverse impact on our business, and this outbreak, as well as other public health crises or disease outbreaks, epidemics or pandemics, has and could continue to adversely impact our business, financial condition, results of operations and cash flows and could continue to exacerbate other risk factors.
Public health crisis or disease outbreak, epidemic or pandemic, such as COVID-19 had and could continue to have a significant adverse impact on our business, and this outbreak, as well as other public health crises or disease outbreaks, epidemics or pandemics, has and could continue to adversely impact our business, financial condition, results of operations and cash flows and could continue to exacerbate other risk factors.
For instance, the Russia-Ukraine conflict has adversely impacted and could continue to adversely impact, among other things, certain of our local markets and suppliers, global and local macroeconomic conditions, foreign exchange rates and financial markets, raw material, energy and transportation costs, and cause further supply chain disruptions.
For instance, the Russia-Ukraine conflict has adversely impacted and could continue to adversely impact, among other things, certain of the Company’s local markets and suppliers, global and local macroeconomic conditions, foreign exchange rates and financial markets, raw material, energy and transportation costs, and cause further supply chain disruptions. In addition, Signet operates quality control and technology centers in Israel.
Failure to comply with the various regulatory requirements may result in damage to Signet’s reputation, civil and criminal proceedings and liability, fines and penalties, and further increase the cost of regulatory compliance. Changes in existing taxation laws, rules or practices may adversely affect the Company’s financial results. The Company operates through various subsidiaries in numerous countries throughout the world.
Failure to comply with the various regulatory requirements may result in 31 Table of Contents damage to Signet’s reputation, civil and criminal proceedings and liability, fines and penalties, and further increase the cost of regulatory compliance. Changes in existing taxation laws, rules or practices may adversely affect the Company’s financial results.
Consequently, Signet is subject to changes in tax laws, treaties or regulations or the interpretation or enforcement thereof in the US or jurisdictions where any subsidiaries operate or are incorporated. Tax laws, treaties and regulations are highly complex and subject to interpretation.
The Company operates through various subsidiaries in numerous countries throughout the world. Consequently, Signet is subject to changes in tax laws, treaties or regulations or the interpretation or enforcement thereof in the US or jurisdictions where any subsidiaries operate or are incorporated. Tax laws, treaties and regulations are highly complex and subject to interpretation.
A number of countries, including the UK, are currently proposing to implement core elements of the Pillar Two proposal by the start of 2024, and the European Union has adopted a Council Directive which requires certain Pillar Two rules to be transposed into member states’ national laws from such time.
A number of countries, including the UK, have adopted the core elements of the Pillar Two proposal effective for years beginning in 2024, and the European Union has adopted a Council Directive which requires certain Pillar Two rules to be transposed into member states’ national laws from such time.
The mining, production and inventory policies followed by major producers of rough diamonds can have a significant impact on natural diamond prices and demand, as can the inventory and buying patterns of jewelry retailers and other parties in the supply chain. The demand for natural diamonds is uncertain and could decrease, which would have an adverse impact on the Company.
The mining, production and inventory policies followed by major producers of rough diamonds can have a significant impact on natural and lab-created diamond prices and demand, as can the inventory and buying patterns of jewelry retailers and other parties in the supply chain.
In addition, the Organization for Economic Co-operation and Development (“OECD”) has led international efforts to devise, and to implement on a permanent basis, a two-pillar solution to address the tax challenges arising from the digitalization of the economy.
In addition, the Organization for Economic Co-operation and Development (“OECD”) has led international efforts to devise, and to implement on a permanent basis, a two-pillar solution to address the tax challenges arising from the digitalization of the economy. Pillar One focuses on nexus and profit allocation, and Pillar Two provides for a global minimum effective corporate tax rate of 15%.
The employees of Signet’s diamond polishing factory in Gaborone, Botswana are covered by a collective bargaining agreement. If relationships with these employees become adverse, operations at the factory could experience labor disruptions such as strikes, lockouts, boycotts and public demonstrations, which could negatively impact the Company’s diamond supply, increase costs and cause negative publicity.
If relationships with these employees become adverse, operations at the factory could experience labor disruptions such as strikes, lockouts, boycotts and public demonstrations, which could negatively impact the Company’s diamond supply, increase costs and cause negative publicity.
If the relative price of jewelry increases, if our competitive position deteriorates, or if pent up demand due to COVID-19 restrictions causes consumers to shift spending to more experience oriented categories such as travel, concerts, and restaurants, our sales and operating profits would be adversely impacted.
If the relative price of jewelry increases, or if our competitive position deteriorates, or if consumer spending shifts to more experience-oriented categories such as travel, concerts, and restaurants, our sales and operating profits would be adversely impacted.
In addition, any sustained increases in the cost of commodities could result in the need to fund a higher level of inventory or changes in the merchandise available to the customer, which could increase costs and disrupt Signet’s sales levels. Alrosa, a Russian diamond mining and distribution company, supplies more than 30% of the world’s diamonds.
In addition, any sustained increases in the cost of commodities could result in the need to fund a higher level of inventory or changes in the merchandise available to the customer, which could increase costs and disrupt Signet’s sales levels.
These laws and regulations change frequently, and the ultimate cost of compliance cannot be precisely estimated. Failure by Signet to comply with labor regulations could result in fines and legal actions. In addition, the ability to recruit and retain staff could be harmed. These consequences could adversely affect the Company’s business.
Failure by Signet to comply with labor regulations could result in fines and legal actions. In addition, the ability to recruit and retain staff could be harmed. These consequences could adversely affect the Company’s business. The Company’s ability to comply with laws and regulations and adapt to changes thereto could adversely affect its business.
Our failure, or perceive failure, to adequately achieve, update or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and may expose us to adverse consumer actions, inhibit our ability to attract and retain talent, and subject us to increased scrutiny from the investment community, special interest groups and enforcement authorities. 30 Table of Contents Collective bargaining activity could disrupt the Company’s operations, increase labor costs or interfere with the ability of management to focus on executing business strategies.
Our failure, or perceive failure, to adequately achieve, update or accurately track and report on these CSGs on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and may expose us to adverse consumer actions, inhibit our ability to attract and retain talent, and subject us to increased scrutiny from the investment community, special interest groups and enforcement authorities.
Failure, entrance into receivership or insolvency by any of these financial institutions 28 Table of Contents in response to conditions affecting the banking system and financial markets, such as the recent occurrence at Silicon Valley Bank, which did not materially affect the Company, could threaten our ability to access our existing cash, cash equivalents and investments and could adversely impact the Company’s financial position and results of operations.
Failure, entrance into receivership or insolvency by any of these financial institutions in response to conditions affecting the banking system and financial markets could threaten our ability to access our existing cash, cash equivalents and investments and could adversely impact the Company’s financial position and results of operations.
Failure to comply with labor regulations could adversely affect the Company’s business. Various state, federal and global laws and regulations govern Signet’s relationship with its employees. Some examples of these laws include requirements related to minimum wage, sick pay, overtime pay, paid time off, workers’ compensation rates, and healthcare reform.
Various state, federal and global laws and regulations govern Signet’s relationship with its employees. Some examples of these laws include requirements related to minimum wage, sick pay, overtime pay, paid time off, workers’ compensation rates, and healthcare reform. These laws and regulations change frequently, and the ultimate cost of compliance cannot be precisely estimated.
In addition, products held by us for repair or service are also subject to risk of loss or theft. We have experienced theft in the past and loss by theft may continue or increase in the future. In addition, the security measures we take may not be effective in reducing losses.
We have experienced theft in the past and loss by theft may continue or increase in the future. In addition, the security measures we take may not be effective in reducing losses.
In the event the Parent Company were to become subject to any Bermuda tax after such date, it could have a material adverse effect on the Parent Company’s results of operations and financial condition. International laws and regulations and foreign taxes could impact Signet’s ability to continue sourcing and manufacturing materials for its products on a global scale.
Any impacts of these actions could increase the Company’s tax liabilities, which in turn could have a material adverse effect on the Company’s results of operations and financial condition. International laws and regulations and foreign taxes could impact Signet’s ability to continue sourcing and manufacturing materials for its products on a global scale.
Risks Related to Competition and Innovation Signet’s pricing compared to competitors, the increased price transparency in the market and the highly fragmented competitive nature of the retail jewelry industry, may have an adverse impact on Signet’s performance.
We may also incur additional costs to resolve such issues, each of which may adversely affect our business and results of operations. Risks Related to Competition and Innovation Signet’s pricing compared to competitors, the increased price transparency in the market and the highly fragmented competitive nature of the retail jewelry industry, may have an adverse impact on Signet’s performance.
Changing legal and regulatory requirements in the US and other jurisdictions in which Signet operates have increased the complexity of the regulatory environment in which the business operates and the cost of compliance.
Signet’s policies and procedures are designed to comply with applicable laws and regulations. Changing legal and regulatory requirements in the US and other jurisdictions in which Signet operates have increased the complexity of the regulatory environment in which the business operates and the cost of compliance.
Our processes and controls for reporting ESG matters across our operations and supply chain are continually evolving as are the differing standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by government agencies. SEC preparedness requires considerable resource requirements.
Our processes and controls for reporting ESG matters across our operations and supply chain are continually evolving as are the differing standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by government agencies. Preparation for the recently issued SEC climate disclosure rule is expected to require additional resources for compliance.
We have established and publicly announced 2030 Corporate Sustainability Goals including commitments to address climate change and human rights. These statements reflect our plans and aspirations and are subject to a number of risks and uncertainties, many of which are outside our control. Like many companies, Signet aspires to work towards net-zero business operations.
These statements reflect our plans and aspirations and are subject to a number of risks and uncertainties, many of which are outside our control. Like many companies, Signet aspires to work towards net-zero business operations.
The availability of diamonds is significantly influenced by the political situation in diamond producing countries and by the Kimberley Process, an inter-governmental agreement for the international trading of rough diamonds.
The demand for natural and lab-created diamonds is uncertain and could decrease, which would have an adverse impact on the Company. The availability of natural diamonds is significantly influenced by the political situation in diamond producing countries and by the Kimberley Process, an inter-governmental agreement for the international trading of rough diamonds.
In a distressed economic and retail environment, in which many of the Company’s competitors continue to engage in aggressive promotional activities, any failure on Signet’s part to react appropriately to changing consumer preferences and fashion trends, including the failure to plan in advance and invest in marketing and advertising campaigns, could have an adverse impact on sales. 27 Table of Contents In addition, adverse or inaccurate information concerning the Company or its brands may be posted on social media platforms at any time, and such information can quickly reach a wide audience.
In a distressed economic and retail environment, in which many of the Company’s competitors continue to engage in aggressive promotional activities, any failure on Signet’s part to react appropriately to changing consumer preferences and fashion trends, including the failure to plan in advance and invest in marketing and advertising campaigns, could have an adverse impact on sales.
Supplemental Nutrition Assistance Program (SNAP), which occurred in February 2023, and the U.S. student loan interest and payment forbearance, which may terminate later in Fiscal 2024 - on macroeconomic conditions and Signet’s business are currently unknown, but like other government stimulus programs that have previously been terminated, such terminations may further negatively impact consumer discretionary spending and our financial performance.
The termination of temporary benefits from State or Federal government stimulus programs - such as the US Supplemental Nutrition Assistance Program (SNAP), which occurred in February 2023, and the US student loan interest and payment forbearance, which terminated in the third quarter of Fiscal 2024 have had an effect on macroeconomic conditions and Signet’s business and the full extent of those effects are currently unknown, but such terminations and future termination of other government stimulus programs may further negatively impact consumer discretionary spending and our financial performance.
The rate of store footprint optimization is dependent on a number of factors including obtaining suitable real estate, the capital resources of Signet, the availability of appropriate staff and management, estimated sales transference rate and the level of the financial return on investment required by management.
The rate of store footprint optimization is dependent on a number of factors including obtaining suitable real estate, the capital resources of Signet, the availability of appropriate staff and management, estimated sales transference rate and the level of the financial return on investment required by management. 28 Table of Contents The Company’s ability to protect its assets, particularly inventory and cash, or intellectual property could have a material adverse impact on its brands, reputation and operating results.
If Signet’s brands do not offer the same or a similar item at the lowest price, or if competitors offer a better and more user-friendly website experience than Signet, or financing that is easier to access or provides better terms, consumers may purchase their jewelry from competitors, which would adversely impact the Company’s sales, results of operations and market share.
If Signet’s brands do not offer the same or a similar item at the lowest price, or if competitors offer a better and more user-friendly website experience than Signet, or financing that is easier to access or provides better terms, consumers may purchase their jewelry from competitors, which would adversely impact the Company’s sales, results of operations and market share. 27 Table of Contents An inability to successfully develop and maintain a relevant OmniChannel experience for customers, failure to anticipate changing fashion trends in the jewelry industry, and poor execution of marketing programs and management of social media could result in a loss of confidence by consumers in Signet’s brand names and have an adverse impact on sales.
Signet is a leading retailer of lab-created diamonds and over the past several years the portion of our inventory, revenue and operating margin related to lab-created diamonds has been increasing along with consumer demand and acceptance. If the value or consumer demand for lab-created diamonds declines it may have a negative impact on our inventory, revenue, and operating results.
Signet is a leading retailer of lab-created diamonds and over the past several years the portion of our inventory, revenue and operating margin related to lab-created diamonds has been increasing along with consumer demand and acceptance. In Fiscal 2024, approximately 12% of Signet’s merchandise sales were products containing lab-created diamonds.
Pillar One focuses on nexus and profit allocation, and Pillar Two provides for a global minimum effective corporate tax rate of 15%. 31 Table of Contents Pillar One would apply to multinational enterprises with annual global revenue above 20 billion euros and profitability above 10%, with the revenue threshold potentially reduced to 10 billion euros in the future.
Pillar One would apply to multinational enterprises with annual global revenue above 20 billion euros and profitability above 10%, with the revenue threshold potentially reduced to 10 billion euros in the future.
As Signet uses an average cost inventory methodology, volatility in its commodity costs may also result in a time lag before cost increases are reflected in retail prices. Further, even if price increases are implemented, there is no certainty that such increases will be sustainable. These factors may cause decreases in gross margins and earnings.
Further, even if price increases are implemented, there is no certainty that such increases will be sustainable. These factors may cause decreases in gross margins and earnings.
While jewelry manufacturing is the major final demand for gold, management believes that the cost of gold is predominantly impacted by investment transactions, which have resulted in significant volatility of gold prices in recent years. Signet’s cost of merchandise and potentially its earnings may be adversely impacted by investment market considerations that cause the price of gold to significantly escalate.
Such actions may not resolve supply constraints or result in the expected returns and other projected benefits anticipated by management. While jewelry manufacturing is the major final demand for gold, management believes that the cost of gold is predominantly impacted by investment transactions, which have resulted in significant volatility of gold prices in recent years.
Any new regulatory initiatives or investigations by the Bureau of Consumer Financial Protection (“CFPB”) or other state authority, or ongoing compliance with the Consent Order entered into on January 16, 2019 with the CFPB and the Attorney General for the State of New York relating to the Company’s in-store credit practices, promotions, and payment protection products could impose additional costs and/or restrictions on credit practices of the North America segment, which could have an adverse effect on the conduct of Signet’s business. 20 Table of Contents Because of the highly seasonal nature of Signet’s sales, any one of these factors that occurs during the Holiday Season would have an increased adverse impact.
Any new regulatory initiatives or investigations by the Consumer Financial Protection Bureau or other state authority, including a potential cap on late fees, relating to the Company’s in-store credit practices, promotions, and payment protection products could impose additional costs and/or restrictions on credit practices of the North America segment, which could have an adverse effect on the conduct of Signet’s business.
An inability to increase retail prices to reflect higher commodity costs would result in lower profitability. Particularly sharp increases in commodity costs may result in a time lag before increased commodity costs are fully reflected in retail prices.
Particularly sharp increases in commodity costs may result in a time lag before increased commodity costs are fully reflected in retail prices. As Signet uses an average cost inventory methodology, volatility in its commodity costs may also result in a time lag before cost increases are reflected in retail prices.
The ultimate duration of this effect on engagements in unknown and could cause unexpected changes to consumer trends in the long term. Additionally, any COVID-19 vaccine mandates by local or federal governments could negatively impact our ability to attract and retain team members.
The ultimate duration of this effect on engagements in unknown and could cause unexpected changes to consumer trends in the long term.
Signet’s success is dependent on the strength and effectiveness of its relationships with its various stakeholders whose behavior may be affected by its management of our 2030 Corporate Sustainability Goals as well as increased demand for environmental, social and governance (“ESG”) disclosures which could result in additional costs or risks.
Signet’s success is dependent on the strength and effectiveness of its relationships with its various stakeholders. The Company’s management of its 2030 CSGs as well as increased demand for ESG disclosures could result in additional costs or risks. We have established and publicly announced 2030 CSGs including commitments to address climate change and human rights.
Our business may be further impacted if the economy deteriorates due to the long-term effects of COVID-19 pandemic, or if additional federal or state mandates order the shutdown of our stores, support centers or distribution centers.
Our business may be further impacted if the economy deteriorates due to the long-term effects of COVID-19 pandemic or other disease. The long-term impacts of the social, economic, and financial disruptions caused by the COVID-19 pandemic and the government responses to such disruptions are unknown.
Fluctuations in foreign exchange rates could adversely impact the Company’s results of operations and financial condition. Signet publishes its consolidated annual financial statements in US dollars.
We may respond by increasing markdowns, initiating marketing promotions, or transferring product to other stores to reduce excess inventory, which would further decrease our gross profits and net income. 20 Table of Contents Fluctuations in foreign exchange rates could adversely impact the Company’s results of operations and financial condition. Signet publishes its consolidated annual financial statements in US dollars.
The Company’s ability to protect our assets, particularly inventory and cash, or intellectual property could have a material adverse impact on our brands, reputation and operating results. Signet’s jewelry products carry high value with resale potential and are therefore subject to loss by theft by customers, organized crime or other third-parties.
Signet’s jewelry products carry high value with resale potential and are therefore subject to loss by theft by customers, organized crime or other third-parties. In addition, products held by us for repair or service are also subject to risk of loss or theft.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the potential impact of COVID-19 on our business operations. A decline in consumer spending may unfavorably impact Signet’s future sales and earnings, particularly if such decline occurs during the Holiday Season.
ITEM 1A. RISK FACTORS Risks Related to Global and Economic Conditions We are unable to control many of the factors affecting consumer spending, and a decline in consumer spending may unfavorably impact Signet’s future sales and earnings, particularly if such decline occurs during the Holiday Season.
Removed
COVID-19 significantly impacted consumer traffic and our retail sales during Fiscal 2021, due to the public health risk and government-imposed quarantines and restrictions of public gatherings and commercial activity to contain spread of the virus.
Added
Because of the highly seasonal nature of Signet’s sales, any one of these factors that occurs during the Holiday Season would have an increased adverse impact.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES The following table provides the location, use and size of Signet’s corporate, distribution, and other non-retail facilities required to support the Company’s global operations as of January 28, 2023: Location Function Approximate square footage Lease or Own Lease expiration Akron, Ohio Corporate and distribution 546,000 Lease 2048 Akron, Ohio Training facility 11,000 Lease 2032 Akron, Ohio Repair facility 38,000 Own N/A Barberton, Ohio Non-merchandise fulfillment 135,000 Lease 2032 Charlotte, North Carolina Corporate and administrative 14,200 Lease 2033 Dallas, Texas Repair facility 31,000 Lease 2029 Dallas, Texas Administrative 190,000 Lease 2029 Frederick, Maryland Customer service 7,716 Lease 2026 New York City, New York Administrative and fulfillment 17,000 Lease 2023 New York City, New York Administrative and fulfillment 65,837 Lease 2032 New York City, New York Manufacturing and distribution 10,580 Lease 2027 New York City, New York Distribution and fulfillment 1,819 Lease 2024 San Francisco, California Administrative 6,178 Lease 2024 Bellevue, Washington Corporate and administrative 22,600 Lease 2024 Seattle, Washington Photo studio 11,000 Lease 2027 Kent, Washington Customer service, Virtual studios 10,500 Lease 2029 Seattle, Washington Distribution and fulfillment 27,500 Lease 2030 Markham, Ontario (Canada) Distribution and fulfillment 31,000 Lease 2026 Birmingham, UK Corporate, distribution and eCommerce fulfillment 235,000 Own N/A Watford, UK Administrative 20,500 Lease 2037 Gaborone, Botswana Diamond polishing 34,200 Own N/A Mumbai, India Diamond liaison 3,000 Lease 2026 Ramat-Gan, Israel Technology center 1,000 Lease 2023 Herzelia, Israel Technology center 12,400 Lease 2023 Herzelia, Israel Technology center 5,400 Lease 2028 Tel-Aviv, Israel Technology center 1,700 Lease 2023 Dubai, UAE Distribution 630 Lease 2023 Blanchardstown, Ireland Distribution and fulfillment 5,200 Lease 2023 Shanghai, China Customer service 8,000 Lease 2023 Sufficient distribution exists in all geographies to meet the respective needs of the Company’s operations. 33 Table of Contents Global retail property Signet attributes great importance to the location and appearance of its stores.
Biggest changePROPERTIES The following table provides the location, use and size of Signet’s material corporate, distribution, and other non-retail facilities required to support the Company’s global retail operations as of February 3, 2024: Location Function Approximate square footage Lease or Own Lease expiration Akron, Ohio Corporate and distribution 546,000 Lease 2048 Akron, Ohio Training facility 11,000 Lease 2032 Akron, Ohio Repair facility 38,000 Own N/A Barberton, Ohio Non-merchandise fulfillment 135,000 Lease 2032 Brentwood, Tennessee Repair facility 16,020 Lease 2025 Charlotte, North Carolina Corporate and administrative 14,200 Lease 2033 Dallas, Texas Repair facility 31,000 Lease 2029 Dallas, Texas Administrative 190,000 Lease 2029 Frederick, Maryland Customer service 7,716 Lease 2026 Kent, Washington Customer service, Virtual studios 10,500 Lease 2029 New York City, New York Administrative and fulfillment 65,837 Lease 2032 New York City, New York Manufacturing and distribution 10,580 Lease 2027 San Francisco, California Administrative 6,178 Lease 2024 Seattle, Washington Repair facility 27,500 Lease 2030 Seattle, Washington Photo studio 11,000 Lease 2027 Seattle, Washington Corporate and administrative 10,900 Lease 2024 Markham, Ontario (Canada) Distribution and fulfillment 31,000 Lease 2026 Birmingham, UK Corporate, distribution and eCommerce fulfillment 235,000 Own N/A Watford, UK Administrative 20,500 Lease 2037 Gaborone, Botswana Diamond polishing 34,200 Own N/A Herzelia, Israel Technology center 12,400 Lease 2028 Herzelia, Israel Technology center 5,400 Lease 2028 The Company has additional distribution and technology centers in New York, Israel, and the United Arab Emirates, as well as a diamond liaison office in India.
The International segment has no relationship with any lessor relating to 10% or more of its store locations. ITEM 3. LEGAL PROCEEDINGS See discussion of legal proceedings in Note 28 of Item 8. ITEM 4. MINE SAFETY DISCLOSURE Not applicable. 35 Table of Contents PART II
The International segment has no relationship with any lessor relating to 10% or more of its store locations. ITEM 3. LEGAL PROCEEDINGS See discussion of legal proceedings in Note 28 of Item 8. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 35 Table of Contents PART II
In addition to a minimum annual rent cost, the majority of mall stores are also liable to pay rent based on sales above a specified base level. In Fiscal 2023, the majority of the mall stores and kiosks only made base rental payments.
In addition to a minimum annual rent cost, the majority of mall stores are also liable to pay rent based on sales above a specified base level. In Fiscal 2024, the majority of the mall stores and kiosks only made base rental payments .
Under the terms of a typical lease, the Company is required to conform and maintain its usage to agreed standards, and is responsible for its proportionate share of expenses associated with common area maintenance, utilities and taxes of the mall.
Under the terms of a typical lease, the 34 Table of Contents Company is required to conform and maintain its usage to agreed standards, and is responsible for its proportionate share of expenses associated with common area maintenance, utilities and taxes of the mall.
No store lease is individually material to Signet’s operations. A typical International segment store undergoes a remodel or refurbishment every five to ten years. The cost of remodeling a regular store is typically between $0.4 million and $0.8 million for both H. Samuel and Ernest Jones, while remodels in prestigious locations could exceed these amounts.
A typical International segment store undergoes a remodel or refurbishment every five to ten years. The cost of remodeling a regular store is typically between $0.4 million and $0.8 million for both H. Samuel and Ernest Jones, while remodels in prestigious locations could exceed these amounts.
At January 28, 2023, the average unexpired lease term of International premises was four years, and a majority of leases had either break clauses or terms expiring within five years. Rents are usually subject to upward review every five years if market conditions so warrant.
At February 3, 2024, the average unexpired lease term of International premises was four years, and a majority of leases had either break clauses or terms expiring within five years. Rents are usually subject to upward review every five years if market conditions so warrant.
As current leases expire, Signet believes that it will be able to renew leases, if desired, for present store locations or to obtain leases in equivalent or improved locations in the same general area. Signet has not 34 Table of Contents experienced difficulty in securing leases for suitable locations for its International stores.
As current leases expire, Signet believes that it will be able to renew leases, if desired, for present store locations or to obtain leases in equivalent or improved locations in the same general area. Signet has not experienced difficulty in securing leases for suitable locations for its International stores. No store lease is individually material to Signet’s operations.
The segment had no other relationship with any lessor relating to 10% or more of its locations. During the past five fiscal years, the Company generally has been successful in renewing its store leases as they expire and has not experienced difficulty in securing suitable locations for its stores. No store lease is individually material to Signet’s operations.
During the past five fiscal years, the Company generally has been successful in renewing its store leases as they expire and has not experienced difficulty in securing suitable locations for its stores. No store lease is individually material to Signet’s operations.
Below is a summary of property details by geography for Signet’s retail operations as of January 28, 2023: North America segment International segment Signet US 2,382 — 2,382 Canada 93 — 93 UK — 322 322 Republic of Ireland — 10 10 Channel Islands — 1 1 Total 2,475 333 2,808 North America retail property Signet’s North America segment operates stores and kiosks in the US and Canada, with substantially all of the locations being leased.
Below is a summary of property details by geography for Signet’s retail operations as of February 3, 2024: North America segment International segment Signet US 2,319 — 2,319 Canada 92 — 92 UK — 277 277 Republic of Ireland — 9 9 Channel Islands — 1 1 Total 2,411 287 2,698 North America retail property Signet’s North America segment operates stores and kiosks in the US and Canada, with substantially all of the locations being leased.
Accordingly, in each of Signet’s banners, investment decisions on selecting sites and refurbishing stores are made centrally, and strict real estate and investment criteria are applied.
Sufficient distribution exists in all geographies to meet the respective needs of the Company’s operations. Global retail property Signet attributes great importance to the location and appearance of its stores. Accordingly, in each of Signet’s banners, investment decisions on selecting sites and refurbishing stores are made centrally, and strict real estate and investment criteria are applied.
The cost of remodels and refurbishments can vary greatly by location and age of store. In the US, the North America segment collectively leases approximately 30% of store and kiosk locations from two lessors. In Canada, it leases approximately 66% of its store locations from five lessors, with no individual lessor relationship exceeding 15% of its store locations.
In Canada, approximately 66% of store locations are leased from five lessors, with no individual lessor relationship exceeding 16%. The segment had no other relationship with any lessor relating to 10% or more of its locations.
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The initial term of mall and off-mall store leases, excluding Jared, Diamonds Direct and Blue Nile, are generally five years, with off-mall leases also including various options for extension or renewal. New Banter locations generally have leases with terms ranging from three to five years.
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The cost of remodels and refurbishments can vary greatly by location and age of store.
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Jared and Diamonds Direct stores are normally opened with lease terms ranging from ten to twenty years with options to extend the lease, and rents are not tied to sales levels. Blue Nile showrooms are normally opened with lease terms ranging from five to ten years with options to extend the lease.
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Below is a summary of lease and cost information for stores and kiosks in the North America segment as of February 3, 2024: Typical Initial Lease Term Average Unexpired Lease Term Typical Cost of New Store Kay Mall 5 years 2 years $0.6 million to $1.1 million Off-mall 5 years 3 years $0.4 million to $0.7 million Zales Mall 5 years 2 years $0.7 million to $1.1 million Off-mall 5 years 2 years $0.1 million to $0.6 million Jared 10 to 20 years 4 years $2.2 million to $3.2 million Diamonds Direct 10 to 20 years 9 years $1.9 million to $3.8 million Blue Nile 5 to 10 years 7 years $1.4 million to $1.9 million Banter In-line 3 to 5 years 2 years $0.3 million to $0.5 million Kiosk 3 to 5 years 1 years $0.1 million to $0.2 million In the US, the North America segment collectively leases approximately 30% of store and kiosk locations from two lessors.
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At January 28, 2023, the average unexpired lease term of leased premises for the North America segment was approximately two years for Kay and Zales mall locations and three years for off-mall Kay and Zales locations. Jared locations on average had five years remaining. Diamonds Direct had on average nine years remaining. Blue Nile had on average seven years remaining.
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Banter average lease term remaining is one year and all but three of these leases had terms expiring within five years. The cost of a new Kay or Zales mall store is typically between $0.1 million and $1.1 million. The cost of a new Jared store is typically between $2.2 million and $3.2 million.
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The cost of a new Diamonds Direct store is typically between $1.5 million and $2.8 million. The cost of a new Blue Nile showroom is typically between $1.4 million and $1.9 million. The cost of a new Banter kiosk is approximately $0.1 million, and the cost of a Banter Inline location is approximately $0.4 million.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRepurchases of equity securities The following table contains the Company’s repurchases of common shares in the fourth quarter of Fiscal 2023: Period Total number of shares purchased Average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs October 30, 2022 to November 26, 2022 379,970 $ 63.22 379,970 $578,151,662 November 27, 2022 to December 24, 2022 495,039 $ 66.42 495,039 $545,272,642 December 25, 2022 to January 28, 2023 118,306 $ 67.69 118,306 $537,264,890 Total 993,315 $ 65.34 993,315 $537,264,890 (1) The average price paid per share excludes commissions paid of $17,880 in connection with the repurchases made under the 2017 Share Repurchase Program (the “2017 Program”). 36 Table of Contents Performance graph The following performance graph and related information shall not be deemed “soliciting material” or to be filed with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that Signet specifically incorporates it by reference into such filing.
Biggest changeIssuer purchases of equity securities The following table contains the Company’s repurchases of common shares in the fourth quarter of Fiscal 2024: Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs October 29, 2023 to November 25, 2023 27,528 $ 81.72 27,528 $680,592,459 November 26, 2023 to December 30, 2023 167,022 $ 86.20 167,022 $666,195,183 December 31, 2023 to February 3, 2024 51,792 $ 99.90 51,792 $661,021,111 Total 246,342 $ 88.58 246,342 $661,021,111 (1) The average price paid per share excludes commissions paid of $4,434 in connection with the repurchases made under the 2017 Share Repurchase Program. 36 Table of Contents Performance graph The following performance graph and related information shall not be deemed “soliciting material” or to be filed with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that Signet specifically incorporates it by reference into such filing.
The comparison of the cumulative total returns for each investment assumes that $100 was invested in Signet’s common shares and the respective indices on February 3, 2018 through January 28, 2023. Related Shareholder Matters Signet Jewelers Limited (the “Parent Company”) is classified by the Bermuda Monetary Authority as a non-resident of Bermuda for exchange control purposes.
The comparison of the cumulative total returns for each investment assumes that $100 was invested in Signet’s common shares and the respective indices on February 2, 2019 through February 3, 2024. Related Shareholder Matters Signet Jewelers Limited (the “Parent Company”) is classified by the Bermuda Monetary Authority as a non-resident of Bermuda for exchange control purposes.
Historical share price performance should not be relied upon as an indication of future share price performance. The following graph compares the cumulative total return to holders of Signet’s common shares against the cumulative total return of the S&P 500 Index and the S&P 500 Specialty Retail Index for the five year period ended January 28, 2023.
Historical share price performance should not be relied upon as an indication of future share price performance. The following graph compares the cumulative total return to holders of Signet’s common shares against the cumulative total return of the S&P 500 Index and the S&P 500 Specialty Retail Index for the five year period ended February 3, 2024.
Any future payment of cash dividends will depend upon such factors as Signet’s earnings, capital requirements, financial condition, restrictions under Signet’s credit facility, legal restrictions and other risk factors deemed relevant by the Board of Directors (“Board”). See Item 1A Risk Factors.
Any future payment of cash dividends will depend upon such factors as Signet’s earnings, capital requirements, financial condition, restrictions under Signet’s credit facility, legal restrictions and other risk factors deemed relevant by the Board. See Item 1A Risk Factors. Number of common shareholders As of March 15, 2024, there were approximately 6,432 shareholders of record of the Company’s common shares.
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Number of common shareholders As of March 10, 2023, there were approximately 6,610 shareholders of record of the Company’s common shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeManagement believes these financial measures are helpful to enhancing investors’ ability to analyze trends in Signet’s business and evaluate Signet’s performance. 47 Table of Contents (in millions) Fiscal 2023 Fiscal 2022 Fiscal 2021 Adjusted debt: Long-term debt $ 147.4 $ 147.1 $ 146.7 Redeemable Series A Convertible Preference Shares 653.8 652.1 642.3 Adjustments: 5x Rent expense 2,232.5 2,216.5 2,263.0 Adjusted debt $ 3,033.7 $ 3,015.7 $ 3,052.0 Adjusted EBITDAR: Net income (loss) $ 376.7 $ 769.9 $ (15.2) Income taxes 74.5 114.5 (74.5) Interest expense, net 13.5 16.9 32.0 Depreciation and amortization on property, plant and equipment (1) 162.2 162.4 175.1 Amortization of definite-lived intangibles (1) 2.3 1.1 0.9 Amortization of unfavorable contracts (1.8) (3.3) (5.4) Share-based compensation 42.0 45.8 14.5 Other non-operating expense, net (2) 140.2 2.1 — Other accounting adjustments (3) 245.5 4.7 214.5 Adjusted EBITDA $ 1,055.1 $ 1,114.1 $ 341.9 Rent expense 446.5 443.3 452.6 Adjusted EBITDAR $ 1,501.6 $ 1,557.4 $ 794.5 Adjusted leverage ratio 2.0x 1.9x 3.8x (1) Total amount of depreciation and amortization reflected on the consolidated statement of cash flows for Fiscal 2023, Fiscal 2022 and Fiscal 2021 equals $164.5 million, $163.5 million and $176 million, respectively, which includes $2.3 million, $1.1 million and $0.9 million, respectively, related to the amortization of definite-lived intangibles, primarily favorable leases and trade names.
Biggest changeThe adjusted net debt leverage ratio is supplemental to the adjusted debt ratio as it is useful to both investors and management to consider cash on hand available to pay down or issue debt. 48 Table of Contents (in millions) Fiscal 2024 Fiscal 2023 Fiscal 2022 Adjusted debt and adjusted net debt: Current portion of long-term debt $ 147.7 $ — $ — Long-term debt — 147.4 147.1 Redeemable Series A Convertible Preference Shares 655.5 653.8 652.1 Adjustments: 5x rent expense 2,199.0 2,232.5 2,216.5 Adjusted debt $ 3,002.2 $ 3,033.7 $ 3,015.7 Less: Cash and cash equivalents 1,378.7 1,166.8 1,418.3 Adjusted net debt $ 1,623.5 $ 1,866.9 $ 1,597.4 Adjusted EBITDAR: Net income $ 810.4 $ 376.7 $ 769.9 Income taxes (170.6) 74.5 114.5 Interest (income) expense, net (18.7) 13.5 16.9 Depreciation and amortization on property, plant and equipment 160.0 162.2 162.4 Amortization of definite-lived intangibles 1.9 2.3 1.1 Amortization of unfavorable contracts (1.8) (1.8) (3.3) Share-based compensation 41.1 42.0 45.8 Other non-operating expense, net (1) 0.4 140.2 2.1 Other accounting adjustments (2) 21.3 245.5 4.7 Adjusted EBITDA $ 844.0 $ 1,055.1 $ 1,114.1 Rent expense 439.8 446.5 443.3 Adjusted EBITDAR $ 1,283.8 $ 1,501.6 $ 1,557.4 Adjusted leverage ratio 2.3x 2.0x 1.9x Adjusted net leverage ratio 1.3x 1.2x 1.0x (1) Fiscal 2023 includes pension settlement charges of $133.7 million.
Comparisons at the divisional level are made in local currency and consolidated comparisons are made at constant exchange rates and exclude the effect of exchange rate movements 39 Table of Contents by recalculating the prior period results as if they had been generated at the weighted average exchange rate for the current period.
Comparisons at the divisional level are made in local currency and consolidated 39 Table of Contents comparisons are made at constant exchange rates and exclude the effect of exchange rate movements by recalculating the prior period results as if they had been generated at the weighted average exchange rate for the current period.
Additionally, if events or conditions were to indicate the carrying value of a reporting unit or an indefinite-lived intangible asset may be greater than its fair value, the Company would evaluate the reporting unit or asset for impairment at that time. Impairment testing compares the carrying amount of the reporting unit or other intangible assets with its fair value.
Additionally, if events or conditions were to indicate the carrying value of a reporting unit or an indefinite-lived intangible asset may be greater than its fair value, the Company would evaluate the reporting unit or asset for impairment at that time. Impairment testing compares the carrying amount of the reporting unit or other indefinite-lived intangible assets with its fair value.
The uncertainty of the current macroeconomic environment on to the Company’s business could continue to further negatively affect the operating performance and cash flows of the previously impaired stores or additional stores, including the impacts of inflation, continued changes in consumer behavior and shifts in discretionary spending, the inability to achieve or maintain cost savings initiatives included in the business plans, changes in real estate strategy or other macroeconomic factors which influence consumer behavior.
The uncertainty of the current macroeconomic environment on the Company’s business could continue to further negatively affect the operating performance and cash flows of the previously impaired stores or additional stores, including the impacts of inflation, continued changes in consumer behavior and shifts in discretionary spending, the inability to achieve or maintain cost savings initiatives included in the business plans, changes in real estate strategy or other macroeconomic factors which influence consumer behavior.
Although the Guarantees provide the holders of Senior Notes with a direct unsecured claim against the assets of the Guarantors, under US federal bankruptcy law and comparable provisions of US state fraudulent transfer laws, in certain circumstances a court could cancel a Guarantee and order the return of any payments made thereunder to the Guarantor or to a fund for the benefit of its creditors.
Although the Guarantees provide the holders of Senior Notes with a direct unsecured claim against the assets of the Guarantors, under US federal bankruptcy law and comparable provisions of US state fraudulent transfer laws, in certain circumstances a court could cancel a Guarantee and order the return of any payments made thereunder to the Guarantors or to a fund for the benefit of its creditors.
The largest element of advertising expenditures has historically been national television advertising; however, Signet has continued to invest more on digital and social marketing in recent years as part of its transformational initiatives, in order to evolve its marketing allocations based on consumer habits, business needs, and maximize return on investment (“ROI”) on its advertising investments.
The largest element of advertising expenditures has historically been national television advertising; however, Signet has continued to invest more on digital and social marketing in recent years as part of its transformational initiatives, in order to evolve its marketing allocations based on consumer habits, business needs, and maximize return on investment on its advertising investments.
Signet uses an average cost inventory methodology and, as jewelry inventory turns slowly, the impact of movements in the cost of diamonds and gold takes time to be fully reflected in the gross margin.
Signet primarily uses an average cost inventory methodology and, as jewelry inventory turns slowly, the impact of movements in the cost of diamonds and gold takes time to be fully reflected in the gross margin.
Factors that could cause or contribute to those differences include, but are not limited to, those discussed below and elsewhere in this report, particularly in “Forward-Looking Statements” above as well as the “Risk Factors” section within Item 1A. This management's discussion and analysis provides comparisons of material changes in the consolidated financial statements for Fiscal 2023 and Fiscal 2022.
Factors that could cause or contribute to those differences include, but are not limited to, those discussed below and elsewhere in this report, particularly in “Forward-Looking Statements” above as well as the “Risk Factors” section within Item 1A. This management's discussion and analysis provides comparisons of material changes in the consolidated financial statements for Fiscal 2024 and Fiscal 2023.
To the extent that management’s estimates of settlements change, or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. See Note 11 of Item 8 for additional information regarding deferred tax assets and unrecognized tax benefits.
To the extent that management’s estimates of settlements change, or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. See Note 10 of Item 8 for additional information regarding deferred tax assets and unrecognized tax benefits.
A significant change in either the overall claims pattern or the life over which the Company is expected to fulfil its obligation under the warranty could result in material change to revenues. Goodwill and intangibles In a business combination, the Company estimates and records the fair value of all assets acquired and liabilities assumed, including identifiable intangible assets and liabilities.
A significant change in either the overall claims pattern or the life over which the Company is expected to fulfill its obligation under the warranty could result in material change to revenues. Goodwill and intangibles In a business combination, the Company estimates and records the fair value of all assets acquired and liabilities assumed, including identifiable intangible assets and liabilities.
Offsetting these receipts, the Company’s largest operating expenses are the purchase of inventory, store occupancy costs (including rent), and payroll and payroll-related benefits.
Offsetting these receipts, the Company’s largest operating expenses are the purchase of inventory, payroll and payroll-related benefits, store occupancy costs (including rent) and advertising.
Adjusted EBITDAR is a non-GAAP measure, defined as earnings before interest and income taxes, depreciation and amortization, share-based compensation expense, non-operating income (expense) and certain non-GAAP accounting adjustments (“Adjusted EBITDA”) and further excludes minimum fixed rent expense for properties occupied under operating leases.
Adjusted EBITDAR is a non-GAAP measure, defined as earnings before interest and income taxes, depreciation and amortization, share-based compensation expense, other non-operating expense, net and certain non-GAAP accounting adjustments (“Adjusted EBITDA”) and further excludes minimum fixed rent expense for properties occupied under operating leases.
Primary sources and uses of operating cash flows Operating activities provide the primary source of cash for the Company and are influenced by a number of factors, the most significant of which are operating income and changes in working capital items, such as: • changes in the level of inventory as a result of sales and other strategic initiatives; • changes and timing of accounts payable and accrued expenses, including variable compensation; and • changes in deferred revenue, reflective of the revenue from performance of extended service plans.
Primary sources and uses of operating cash flows Operating activities provide the primary source of cash for the Company and are influenced by a number of factors, the most significant of which are operating income and changes in working capital items, such as: 50 Table of Contents • changes in the level of inventory as a result of sales and other strategic initiatives; • changes and timing of accounts payable and accrued expenses, including variable compensation; and • changes in deferred revenue, reflective of the revenue from performance of extended service plans.
Goodwill and other indefinite-lived intangible assets, such as indefinite-lived trade names, are evaluated for impairment annually as of the beginning of the fourth reporting period, with the exception of newly acquired reporting units which are completed no later than twelve months after the date of acquisition.
Goodwill and other indefinite-lived intangible assets, such as indefinite-lived trade names, are evaluated for impairment annually as of the end of the fourth reporting period, with the exception of newly acquired reporting units which are completed no later than twelve months after the date of acquisition.
Management believes that cash balances and the committed borrowing facilities (including the ABL Facility described more fully in Note 24 of Item 8) currently available to the business are sufficient for both its present and near-term requirements.
Management believes that cash balances and the committed borrowing facilities (including the ABL Facility described more fully in Note 22 of Item 8) currently available to the business are sufficient for both its present and near-term requirements.
As discussed further in Note 13 of Item 8, the Company has outsourced its entire credit card portfolio, and it receives cash from its outsourced financing partners (net of applicable fees) generally within two days of the customer sale.
As further discussed in Note 12 of Item 8, the Company has outsourced its entire credit card portfolio, and it receives cash from its outsourced financing partners (net of applicable fees) generally within two days of the customer sale.
Same store sales are also impacted by certain accounting adjustments to sales, primarily related to the deferral of revenue from the Company’s extended service plans. eCommerce sales include all sales with customers that originate online, including direct to customer, ship to store, and buy online, pick-up in store ("BOPIS"). eCommerce sales are included in the calculation of same store sales for the period and the comparative figures from the 12-month anniversary of the launch of the relevant website.
Same store sales are also impacted by certain accounting adjustments to sales, primarily related to the deferral of revenue from the Company’s extended service plans. eCommerce sales include all sales with customers that originate online, including direct to customer, ship to store, and BOPIS. eCommerce sales are included in the calculation of same store sales for the period and the comparative figures from the 12-month anniversary of the launch of the relevant website.
The total cash consideration was $389.9 million, net of cash acquired, including purchase price adjustments for working capital. Blue Nile is a leading online retailer of engagement rings and fine jewelry. The addition of Blue Nile brings Signet a younger, more affluent, and diverse customer to Signet’s banner portfolio that will expand Signet’s accessible luxury tier.
The total cash consideration was $389.9 million, net of cash acquired, including purchase price adjustments for working capital. Blue Nile is a leading online retailer of engagement rings and fine jewelry. The addition of Blue Nile brings Signet a younger, more affluent, and diverse customer to Signet’s banner portfolio that expands Signet’s accessible luxury tier.
Selling, general and administrative expense (“SG&A”) SG&A primarily includes store staff and store administrative costs as well as advertising and promotional costs. It also includes field support center expenses such as information technology, finance, eCommerce and other operating expenses (such as credit costs) not specifically categorized elsewhere in the consolidated statements of operations.
Selling, general and administrative expenses (“SG&A”) SG&A primarily includes store staff and store administrative costs as well as advertising and promotional costs. It also includes field support center expenses such as information technology, finance, eCommerce and other operating expenses (such as private label credit costs) not specifically categorized elsewhere in the consolidated statements of operations.
Management estimates that a 1% change in the recognition rates between years for ESP sales, based on the level of ESP plans sold in Fiscal 2023 and assuming no change in the life over which the Company is expected to fulfil its obligations under the warranty, would impact revenue recognized on current year ESA plan sales by approximately $5 million.
Management estimates that a 1% change in the recognition rates between years for ESP sales, based on the level of ESP plans sold in Fiscal 2024 and assuming no change in the life over which the Company is expected to fulfill its obligations under the warranty, would impact revenue recognized on current year ESA plan sales by approximately $5 million.
The Company primarily utilizes the replacement cost method to 53 Table of Contents estimate the fair value of its property and equipment, and the income capitalization method to estimate the fair value of its ROU assets, which incorporates historical store level sales, internal business plans, real estate market capitalization and rental rates, and discount rates.
The Company primarily utilizes the replacement cost method to estimate the fair value of its property and equipment, and the income capitalization method to estimate the fair value of its ROU assets, which incorporates historical store level sales, internal business plans, real estate market capitalization and rental rates, and discount rates.
As the Company continues to execute on its Inspiring Brilliance strategy, it will continue to focus on working capital efficiency, optimizing its real estate footprint, and prioritizing transformational productivity to drive future cost savings opportunities, all of which are expected to be used to fuel strategic investments, grow the business, and enhance liquidity.
As the Company continues to execute on its Inspiring Brilliance strategy, it intends to continue to focus on working capital efficiency, optimizing its real estate footprint, and prioritizing transformational productivity to drive further cost savings opportunities, all of which are expected to be used to fuel strategic investments, grow the business, and enhance liquidity.
The Company believes that cash on hand, cash flows from operations and available borrowings under the ABL Revolving Facility will be sufficient to meet its ongoing business requirements for at least the 12 months following the date of this report, including funding working capital needs, projected investments in the business (including capital expenditures), debt service, and returns to shareholders through either dividends or share repurchases.
The Company believes that cash on hand, cash flows from operations and available borrowings under the ABL Revolving Facility will be sufficient to meet its ongoing business requirements for at least the 12 months following the date of this report, including funding working capital needs, projected investments in the business (including capital expenditures), debt service and maturities, including Preferred Shares, and returns to shareholders through dividends and share repurchases.
LIQUIDITY AND CAPITAL RESOURCES Overview and capital strategy The Company’s primary sources of liquidity are cash on hand, cash provided by operations and availability under its senior unsecured asset-based revolving credit facility (the “ABL Revolving Facility”).
LIQUIDITY AND CAPITAL RESOURCES Overview The Company’s primary sources of liquidity are cash on hand, cash provided by operations and availability under its senior secured asset-based revolving credit facility (the “ABL Revolving Facility”).
See Note 13 of Item 8 for additional information regarding the sale of the in-house credit card receivable portfolio.
See Note 12 of Item 8 for additional information regarding the sale of the in-house credit card receivable portfolio.
As further described in Note 24 of Item 8, on July 28, 2021, the Company entered into an agreement to amend the ABL Revolving Facility. The amendment extends the maturity of the ABL Revolving Facility to July 28, 2026 and allows the Company to increase the size of the ABL Revolving Facility by up to $600 million.
As further described in Note 22 of Item 8, the Company entered into an agreement to amend the ABL Revolving Facility on July 28, 2021. The amendment extended the maturity of the ABL Revolving Facility to July 28, 2026 and allows the Company to increase the size of the ABL Revolving Facility by up to $600 million.
Same store sales exclude the 53rd week in the fiscal year in which it occurs. Cost of sales and gross margin Cost of sales is mostly composed of merchandise costs (net of discounts and allowances).
Same store sales exclude the 53 rd week in the fiscal year in which it occurs. Cost of sales and gross margin Cost of sales is mostly composed of merchandise costs (net of discounts and allowances).
The 55 Table of Contents determination of whether a Guarantor was or was not rendered insolvent when it entered into its Guarantee will vary depending on the law of the jurisdiction being applied.
The determination of whether a Guarantor was or was not rendered insolvent when it entered into its Guarantee will vary depending on the law of the jurisdiction being applied.
(2) Net merchandise sales within the International segment include all merchandise product sales, including value added tax (“VAT”), net of discounts and returns. In addition, excluded from net merchandise sales are repairs, warranty, insurance, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in same store sales.
(2) Net merchandise sales within the International reportable segment include all merchandise product sales, including value added tax (“VAT”), net of discounts and returns. In addition, excluded from net merchandise sales are repairs, warranty, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in reported sales.
The effect from foreign currency, calculated on a constant currency basis, is determined by applying current year average exchange rates to prior year sales in local currency. nm Not meaningful.
The effect from foreign currency, calculated on a constant currency basis, is determined by applying current year average exchange rates to prior year sales in local currency.
North America sales The North America segment’s total sales were $2.5 billion compared to $2.6 billion in the prior year quarter, or a decrease of 4.0%.
North America sales The North America reportable segment’s total sales were $2.4 billion compared to $2.5 billion in the prior year quarter, or a decrease of 6.1%.
In addition, excluded from net merchandise sales are sales tax in the US, repairs, extended service plan, insurance, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in same store sales. (2) Net merchandise sales within the International segment include all merchandise product sales, including VAT, net of discounts and returns.
In addition, excluded from net merchandise sales are sales tax in the US, repairs, extended service plans, insurance, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in reported sales. (2) Net merchandise sales within the International reportable segment include all merchandise product sales, including VAT, net of discounts and returns.
Cost of sales also contains: • Occupancy costs such as rent, common area maintenance, depreciation and real estate taxes. • Store operating expenses such as utilities, displays and third-party merchant credit costs. • Distribution and warehousing costs including freight, processing, inventory shrinkage and related payroll.
Cost of sales also contains: • Occupancy costs such as rent, repairs and maintenance, depreciation and real estate taxes. • Store operating expenses such as utilities, store supplies and third-party merchant credit costs. • Distribution and warehousing costs including freight, processing, inventory shrinkage and related payroll.
Fiscal 2022 includes: 1) $0.9 million of net asset impairment gains related to long-lived assets; 2) $3.3 million credit to restructuring expense, primarily related to adjustments to previously recognized restructuring liabilities in connection with the Company’s transformation plan; 3) $1.7 million related to the settlement of previously disclosed shareholder litigation matters; 4) $8.6 million of charges related to professional fees for direct transaction-related costs incurred for the acquisitions of Rocksbox and Diamonds Direct in Fiscal 2022, as well as includes the impact of the fair value step up for inventory from Diamonds Direct; and 5) $1.4 million gain associated with the sale of customer in-house finance receivables.
Fiscal 2023 includes: 1) $203.8 million related to litigation charges; 2) $25.8 million of acquisition and integration-related costs including the impact of the fair value step-up for inventory from Diamonds Direct and Blue Nile, as well as direct transaction-related and integration costs, primarily professional fees and severance, incurred related to the acquisition of Blue Nile in Fiscal 2023; and 3) $15.9 million of asset impairments Fiscal 2022 includes: 1) $0.9 million of net asset impairment gains related to long-lived assets; 2) $3.3 million credit to restructuring expense, primarily related to adjustments to previously recognized restructuring liabilities in connection with the Company’s transformation plan; 3) $1.7 million related to the settlement of previously disclosed shareholder litigation matters; 4) $8.6 million of charges related to professional fees for direct transaction-related costs incurred for the acquisitions of Rocksbox and Diamonds Direct in Fiscal 2022, as well as includes the impact of the fair value step up for inventory from Diamonds Direct; and 5) $1.4 million gain associated with the sale of customer in-house finance receivables.
In addition, excluded from net merchandise sales are sales tax in the US, repairs, extended service plan, insurance, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in same store sales.
In addition, excluded from net merchandise sales are sales tax in the US, repairs, extended service plans, insurance, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in reported sales.
Other non-operating expense, net In Fiscal 2023, other non-operating expense was $140.2 million compared to $2.1 million in Fiscal 2022. In the fourth quarter of Fiscal 2023, other non-operating income was $0.6 million compared to other non-operating income of $1.2 million in the prior year fourth quarter.
Other non-operating expense, net In Fiscal 2024, other non-operating expense was $0.4 million compared to other non-operating expense of $140.2 million in Fiscal 2023. In the fourth quarter of Fiscal 2024, other non-operating income was $2.0 million compared to other non-operating income of $0.6 million in the prior year fourth quarter.
Asset impairments, net During Fiscal 2023, the Company recorded non-cash, pre-tax asset impairments related to the impairment of long-lived assets of $22.7 million. During the fourth quarter of Fiscal 2023, the Company recorded non-cash, pre-tax asset impairments of $20.7 million, all of which related to long-lived assets and was driven by a partial impairment of the Company’s Akron, Ohio headquarters.
During Fiscal 2023, the Company recorded non-cash, pre-tax asset impairments related to the impairment of long-lived assets of $22.7 million. During the fourth quarter of Fiscal 2023, the Company recorded non-cash, pre-tax asset impairments of $20.7 million, all of which related to long-lived assets and was driven by a partial impairment of the Company’s support center.
In addition, excluded from net merchandise sales are repairs, warranty, insurance, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in same store sales. (3) Amounts for the International segment are denominated in British pounds.
In addition, excluded from net merchandise sales are repairs, warranty, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in reported sales. (3) International reportable segment amounts are denominated in British pounds.
The investments and new capabilities built during the past few years laid the foundation for the Company’s accelerated growth post-pandemic, including prioritizing digital investments in both technology and talent, enhancing the Company’s new and modernized eCommerce platform and optimizing a connected commerce shopping journey for its customers.
The investments and new capabilities built during the past few years laid the foundation for the Company’s accelerated growth, including prioritizing investments in digital technology and data analytics, enhancing the Company’s new and modernized eCommerce platform and optimizing a connected commerce shopping journey for its customers.
The primary drivers of staffing costs are the number of full-time equivalent employees and the level of compensation, taxes and other benefits paid. Management varies, on a store by store basis, the hours worked based on the expected level of selling activity, subject to minimum staffing levels required to operate the store. Non-store staffing levels are less variable.
The primary drivers of staffing costs are the number of full-time equivalent team members and the level of compensation, payroll taxes, benefits and incentives. Management varies, on a store by store basis, the hours worked based on the expected level of selling activity, subject to minimum staffing levels required to operate the store. Non-store staffing levels are less variable.
Non-GAAP operating income Non-GAAP operating income is a non-GAAP measure defined as operating income excluding the impact of significant and unusual items which management believes are not necessarily reflective of normal operating performance during a period.
Non-GAAP operating income and non-GAAP operating margin Non-GAAP operating income is a non-GAAP measure defined as operating income excluding the impact of certain items which management believes are not necessarily reflective of normal operational performance during a period.
In Fiscal 2024, it is anticipated a five percent movement in the British pound to US dollar exchange rate would impact the Company’s income before income taxes by approximately $0.5 million, while a five percent movement in the Canadian dollar to US dollar exchange rate would impact the Company’s income before income taxes by approximately $1.3 million.
In Fiscal 2025, it is anticipated a five percent movement in the British pound to US dollar exchange rate would impact the Company’s income before income taxes by approximately $0.4 million, while a five percent movement in the Canadian dollar to US dollar exchange rate would impact the Company’s income before income taxes by approximately $1.6 million.
Refer to Note 17 of Item 8 for additional information. (2) Refer to Note 28 of Item 8 for additional information.
Refer to Note 28 of Item 8 for additional information.
Financing activities Net cash used in financing activities in Fiscal 2023 was $490.0 million, consisting of the repurchase of $376.1 million of common shares, payments for withholding taxes related to the settlement of the Company’s share-based compensation awards of $44.4 million, and preferred and common share dividends paid of $69.5 million. See Note 8 of Item 8 for more information.
Net cash used in financing activities in Fiscal 2023 was $490.0 million, consisting of the repurchase of $376.1 million of common shares, preferred and common share dividends paid of $69.5 million, and payments for taxes withheld related to the settlement of the Company’s share-based compensation awards of $44.4 million.
The following table provides a summary of these items as of January 28, 2023, January 29, 2022 and January 30, 2021: (in millions) January 28, 2023 January 29, 2022 January 30, 2021 Working capital (1) $ 1,259.0 $ 1,659.7 $ 1,583.3 Capitalization: Long-term debt 147.4 147.1 146.7 Redeemable Series A Convertible Preference Shares 653.8 652.1 642.3 Shareholders’ equity 1,578.6 1,564.0 1,190.3 Total capitalization 2,379.8 2,363.2 1,979.3 Additional amounts available under credit agreements $ 1,406.6 $ 1,245.9 $ 1,320.8 (1) Includes cash and cash equivalents If the excess availability under the ABL Revolving Facility falls below the threshold specified in the ABL Facility agreement, the Company will be required to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00.
The following table provides a summary of these items as of February 3, 2024, January 28, 2023 and January 29, 2022: (in millions) February 3, 2024 January 28, 2023 January 29, 2022 Working capital (1) $ 1,560.6 $ 1,259.0 $ 1,659.7 Capitalization: Current portion of long-term debt $ 147.7 $ — $ — Long-term debt — 147.4 147.1 Redeemable Series A Convertible Preference Shares 655.5 653.8 652.1 Shareholders’ equity 2,166.5 1,578.6 1,564.0 Total capitalization $ 2,969.7 $ 2,379.8 $ 2,363.2 Additional amounts available under credit agreements $ 1,134.2 $ 1,406.6 $ 1,245.9 (1) Includes cash and cash equivalents and current portion of long-term debt If the excess availability under the ABL Revolving Facility falls below the threshold specified in the ABL Facility agreement, the Company will be required to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00.
Management finds the information useful when analyzing financial results in order to appropriately evaluate the performance of the business without the impact of these significant and unusual items. In particular, management believes the consideration of measures that exclude such items can assist in the comparison of operational performance in different periods which may or may not include such items.
Management finds the information useful when analyzing operating results to appropriately evaluate the performance of the business without the impact of these certain items. Management believes the consideration of measures that exclude such items can assist in the comparison of operational performance in different periods which may or may not include such items.
As of January 28, 2023, the threshold related to the fixed coverage ratio was approximately $126 million. The ABL Facility places certain restrictions upon the Company’s ability to, among other things, incur additional indebtedness, pay dividends, grant liens and make certain loans, investments and divestitures.
As of February 3, 2024, the threshold related to the fixed coverage ratio was approximately $114 million. The ABL Facility places certain restrictions upon the Company’s ability to, among other things, incur additional indebtedness, pay dividends, grant liens and make certain loans, investments and divestitures.
Uncertainties exist that could continue to impact the Company’s results of operations or cash flows in the future, such as further pricing and inflationary environment changes impacting the Company (including, but not limited to, materials, labor, fulfillment and advertising costs) or adverse shifts in consumer discretionary spending, supply chain disruptions to the Company’s business, the potential resurgence of COVID-19 in key trade areas, the Company’s ability to recruit and retain qualified team members, or organized retail crime.
Uncertainties exist that could impact the Company’s results of operations or cash flows in the future, such as further pricing and inflationary environment changes impacting the Company (including, but not limited to, materials, labor, fulfillment and advertising costs) or adverse shifts in consumer discretionary spending, deterioration of consumer credit, supply chain disruptions to the Company’s business, the Company’s ability to recruit and retain qualified team members, or organized retail crime and its impact to mall traffic.
As of January 28, 2023, the Company had $1.2 billion of cash and cash equivalents, $147.7 million of outstanding debt related to the 4.70% senior unsecured notes due in 2024 (the “Senior Notes”), and no outstanding borrowings on the ABL Revolving Facility. The available borrowing capacity on the ABL Revolving Facility was $1.4 billion as of January 28, 2023.
As of February 3, 2024, the Company had $1.4 billion of cash and cash equivalents, $147.8 million of outstanding debt related to the 4.70% senior unsecured notes due in June 2024 (the “Senior Notes”) and no outstanding borrowings on the ABL Revolving Facility. The available borrowing capacity on the ABL Revolving Facility was $1.1 billion as of February 3, 2024.
See Note 12 of Item 8 for additional information. • Change in current income taxes was a source of $98.5 million in the current period compared to a use of $6.7 million in the prior year. Deferred taxes was a use of $99.3 million in the current period compared to a source of $0.1 million in the prior year.
See Note 11 of Item 8 for additional information. • The change in current income taxes was a use of $3.0 million in the current period compared to a source of $98.5 million in the prior year.
The Company has a valuation allowance of $19.0 million and $27.9 million, as of January 28, 2023 and January 29, 2022, respectively, due to uncertainties related to the Company’s ability to utilize certain of its deferred tax assets, primarily consisting of net operating losses, foreign tax credits and capital losses carried forward.
The Company has a valuation allowance of $18.3 million and $19.0 million, as of February 3, 2024 and January 28, 2023, respectively, due to uncertainties related to the Company’s ability to utilize certain of its deferred tax assets, primarily consisting of net operating losses and capital losses carried forward.
Credit ratings The following table provides Signet’s credit ratings as of January 28, 2023: Rating Agency Corporate Senior Notes Standard & Poor’s BB- BB- Moody’s Ba3 B2 Fitch BB BB OFF-BALANCE SHEET ARRANGEMENTS Merchandise held on consignment Signet held $623.0 million of consignment inventory which is not recorded on the balance sheet at January 28, 2023, as compared to $533.2 million at January 29, 2022.
Credit ratings The following table provides Signet’s credit ratings as of February 3, 2024: Rating Agency Corporate Senior Notes Standard & Poor’s BB- BB- Moody’s Ba3 B2 Fitch BB BB OFF-BALANCE SHEET ARRANGEMENTS Merchandise held on consignment The Company held $530.3 million of consignment inventory at February 3, 2024 compared to $623.0 million at January 28, 2023, which is not recorded on the consolidated balance sheets.
(in millions) Fiscal 2023 Fiscal 2022 Fiscal 2021 Net cash provided by operating activities $ 797.9 $ 1,257.3 $ 1,372.3 Purchase of property, plant and equipment (138.9) (129.6) (83.0) Free cash flow 659.0 1,127.7 1,289.3 Proceeds from sale of in-house finance receivables — (81.3) — Adjusted free cash flow $ 659.0 $ 1,046.4 $ 1,289.3 46 Table of Contents 3.
(in millions) Fiscal 2024 Fiscal 2023 Fiscal 2022 Net cash provided by operating activities $ 546.9 $ 797.9 $ 1,257.3 Purchase of property, plant and equipment (125.5) (138.9) (129.6) Free cash flow 421.4 659.0 1,127.7 Proceeds from sale of in-house finance receivables — — (81.3) Adjusted free cash flow $ 421.4 $ 659.0 $ 1,046.4 3.
In the fourth quarter, operating income was $369.5 million or 13.9% of sales compared to $402.4 million or 14.3% of sales in prior year fourth quarter.
In the fourth quarter, operating income was $416.3 million or 16.7% of sales compared to $369.5 million or 13.9% of sales in prior year fourth quarter.
First, the Company renegotiated its $1.5 billion ABL Facility, as further described in Note 24 of Item 8, to extend the maturity until 2026 and allow overall greater financial flexibility to grow the business and provide an additional option to address the 2024 maturities for its Senior Notes and Preferred Shares, if necessary.
In addition, in Fiscal 2022, the Company renegotiated its $1.5 billion ABL Facility, as further described in Note 22 of Item 8, to extend the maturity until 2026 and allow overall greater financial flexibility to grow the business and provide an additional option to address the calendar year 2024 debt and Preferred Shares, if necessary.
(3) Acquisition and integration-related costs include the impact of the fair value step-up for inventory from Diamonds Direct and Blue Nile, as well as direct transaction-related and integration costs, primarily professional fees and severance, incurred related to the acquisition of Blue Nile in Fiscal 2023; Fiscal 2022 included direct transaction-related costs for the acquisition of Rocksbox and Diamonds Direct and impact of the fair value step-up for inventory from Diamonds Direct. 4.
(3) Fiscal 2024 includes expenses related to the integration of Blue Nile, primarily severance and retention, exit and disposal costs and system decommissioning costs; Fiscal 2023 includes the impact of the fair value step-up for inventory acquired in the Diamonds Direct and Blue Nile acquisitions, as well as direct transaction-related and integration costs, primarily professional fees and severance, incurred for the acquisition of Blue Nile; Fiscal 2022 included direct transaction-related costs for the acquisition of Rocksbox and Diamonds Direct and impact of the fair value step-up for inventory from Diamonds Direct.
Although claims experience varies between the Company’s national banners, thereby resulting in different recognition rates, approximately 60% to 65% of revenue is recognized within the first two years on a weighted average basis.
Lifetime ESP revenue is deferred and recognized over a maximum of 13 years after the sale of the warranty contract. Although claims experience varies between the Company’s national banners, thereby resulting in different recognition rates, approximately 60% to 65% of revenue is recognized within the first two years on a weighted average basis.
The fourth quarter of Fiscal 2023 was primarily driven by charges related to a litigation matter of $15.9 million. The fourth quarter of Fiscal 2022 was primarily driven by foreign exchange losses and charges related to previously disclosed shareholder litigation matters. See Notes 12 and 28 of Item 8 for additional information.
The fourth quarter of Fiscal 2023 was primarily driven by charges related to a litigation matter of $15.9 million. See Notes 11 and 28 of Item 8 for additional information.
The principal terms of the consignment agreements, which can generally be terminated by either party, are such that Signet can return any, or all of, the inventory to the relevant supplier without financial or commercial penalty.
The principal terms of the consignment agreements, which can generally be terminated by either party, are such that the Company can return any or all of the inventory to the relevant suppliers without financial or commercial penalties and the supplier can adjust the inventory costs prior to sale.
The effect from foreign currency, calculated on a constant currency basis, is determined by applying current year average exchange rates to prior year sales in local currency. nm Not meaningful. 41 Table of Contents ATV is defined as net merchandise sales on a same store basis divided by the total number of customer transactions.
The effect from foreign currency, calculated on a constant currency basis, is determined by applying current year average exchange rates to prior year sales in local currency. (3) Includes sales from Signet’s diamond sourcing operation. nm Not meaningful. ATV is an operating metric defined as net merchandise sales divided by the total number of customer transactions.
Summary cash flows The following table provides a summary of Signet’s cash flow activity for Fiscal 2023, Fiscal 2022 and Fiscal 2021: (in millions) Fiscal 2023 Fiscal 2022 Fiscal 2021 Net cash provided by operating activities $ 797.9 $ 1,257.3 $ 1,372.3 Net cash used in investing activities (545.4) (642.7) (77.8) Net cash used in financing activities (490.0) (366.6) (498.6) (Decrease) increase in cash and cash equivalents (237.5) 248.0 795.9 Cash and cash equivalents at beginning of period 1,418.3 1,172.5 374.5 (Decrease) increase in cash and cash equivalents (237.5) 248.0 795.9 Effect of exchange rate changes on cash and cash equivalents (14.0) (2.2) 2.1 Cash and cash equivalents at end of period $ 1,166.8 $ 1,418.3 $ 1,172.5 Operating activities Net cash provided by operating activities in Fiscal 2023 was $797.9 million compared to net cash provided by operating activities of $1.3 billion in the prior year comparable period.
Summary cash flow The following table provides a summary of Signet’s cash flow activity for Fiscal 2024 and Fiscal 2023: (in millions) Fiscal 2024 Fiscal 2023 Net cash provided by operating activities $ 546.9 $ 797.9 Net cash used in investing activities (75.8) (545.4) Net cash used in financing activities (259.7) (490.0) Increase (decrease) in cash and cash equivalents 211.4 (237.5) Cash and cash equivalents at beginning of period 1,166.8 1,418.3 Increase (decrease) in cash and cash equivalents 211.4 (237.5) Effect of exchange rate changes on cash and cash equivalents 0.5 (14.0) Cash and cash equivalents at end of period $ 1,378.7 $ 1,166.8 Operating activities Net cash provided by operating activities in Fiscal 2024 was $546.9 million compared to net cash provided by operating activities of $797.9 million in the prior year comparable period.
Similarly, sales from acquired businesses made within the last 12 months are excluded from the comparison until their 12-month anniversary. Sales from stores that were acquired during the period and have not been included in the Company’s results for both the current and prior period presented are also excluded from same store sales.
Sales from stores that were acquired during the period and have not been included in the Company’s results for both the current and prior period presented are also excluded from same store sales. Sales after the 12-month anniversary are compared against the equivalent prior period sales within the comparable store sales comparison.
Brick and mortar same store sales decreased 5.5% from the prior period. The increase in eCommerce sales as of percentage of sales is primarily due to the recent addition of Blue Nile to Signet’s portfolio, as virtually all Blue Nile sales are digital.
Brick and mortar same store sales decreased 11.3% from the prior period. The increase in eCommerce sales as of percentage of sales is primarily due to the addition of Blue Nile to Signet’s portfolio in Fiscal 2023.
Operating income (loss) In the year to date period of Fiscal 2023, operating income was $604.9 million or 7.7% of sales compared to $903.4 million or 11.5% of sales in Fiscal 2022.
Operating income In the year to date period of Fiscal 2024, operating income was $621.5 million or 8.7% of sales compared to $604.9 million or 7.7% of sales in Fiscal 2023.
Subsequent to year-end, the Board approved a further $263 million increase to the multi-year authorization under the 2017 Program bringing the total remaining authorization to approximately $775 million (net of approximately $25 million of share repurchases made in the first quarter of Fiscal 2024 through March 15, 2023). See Note 8 of Item 8 for more details.
Subsequent to year-end, the Board approved a further increase to the multi-year authorization under the 2017 Program bringing the total remaining authorization to approximately $850 million (net of approximately $7.0 million of share repurchases made in the first quarter of Fiscal 2025 through March 19, 2024). See Note 7 of Item 8 for additional information related to share repurchases.
(3) The Company also provides the period-over-period change in total sales excluding the impact of foreign currency fluctuations, which is a non-GAAP measure, to provide transparency to performance and enhance investors’ understanding of underlying business trends.
Blue Nile is included in same store sales beginning in the third quarter of Fiscal 2024. (2) The Company provides the period-over-period change in total sales excluding the impact of foreign currency fluctuations, which is a non-GAAP measure, to provide transparency to performance and enhance investors’ understanding of underlying business trends.
Stores that have been relocated or expanded, but remain within the same local geographic area, are included within the comparison with no adjustment to either the current or comparative period.
Stores closed in the current financial period are included up to the date of closure and the comparative period is correspondingly adjusted. Stores that have been relocated or expanded, but remain within the same local geographic area, are included within the comparison with no adjustment to either the current or comparative period.
The other non-operating expenses in Fiscal 2023 primarily consisted of non-cash, pre-tax settlement charges of $133.7 million related to the partial buy-out of the Signet Group Pension Scheme.
The other non-operating expenses in Fiscal 2023 primarily consisted of non-cash, pre-tax settlement charges of $133.7 million related to the partial buy-out of the Signet Group Pension Scheme. See Note 27 of Item 8 for additional information on the Company’s retirement plans.
Leverage ratio The leverage ratio is a non-GAAP measure calculated by dividing Signet’s adjusted debt by adjusted EBITDAR. Adjusted debt is a non-GAAP measure defined as debt recorded in the consolidated balance sheet, plus redeemable Series A convertible preference shares (“Preferred Shares”), plus an adjustment for operating leases (5x annual rent expense).
Adjusted debt is a non-GAAP measure defined as debt recorded in the consolidated balance sheet, plus redeemable Series A Convertible Preference Shares (“Preferred Shares”), plus an adjustment for operating leases (5x annual rent expense). Adjusted net debt, a non-GAAP measure, is adjusted debt less the cash and cash equivalents on hand as of the balance sheet dates.
The Company also increased its common dividends from $0.18 per share in Fiscal 2022, to $0.20 per share in Fiscal 2023, and beginning in Fiscal 2024 increased it again to $0.23 per share.
The Company increased its common dividends from $0.18 per share in Fiscal 2022, to $0.20 per share in Fiscal 2023, to $0.23 per share in Fiscal 2024, and beginning in Fiscal 2025 increased it again to $0.29 per share. The Company also remains focused on share repurchases under its 2017 Share Repurchase Program (the “2017 Program”).
If future economic conditions or operating performance, such as declines in sales or increases in discount rates, are different than those projected by management in its most recent impairment tests for goodwill and indefinite-lived intangible assets, future impairment charges may be required. See Note 19 of Item 8 for further details.
Future economic conditions or operating performance, such as declines in sales or increases in discount rates, could differ from those projected by management in its most recent impairment tests for indefinite-lived intangible assets, including goodwill. This could impact our estimates of fair values and may result in future material impairment charges. See Note 18 of Item 8 for further details.
Refer to the Non-GAAP Measures section above for the definition of net cash and reconciliation to its most comparable financial measure presented in accordance with GAAP. As of January 28, 2023 and January 29, 2022, the Company was in compliance with all debt covenants.
Net cash was $1.2 billion as of February 3, 2024 compared to net cash of $1.0 billion as of January 28, 2023. Refer to the Non-GAAP Measures section above for the definition of net cash and reconciliation to its most comparable financial measure presented in accordance with GAAP.
Fourth quarter sales Signet’s total sales decreased 5.2% year over year to $2.7 billion in the fourth quarter, while total sales at constant exchange rates decreased 4.3%. Signet’s same store sales decreased 9.1%, compared to an increase of 23.8% in the prior year quarter.
The number of transactions decreased 10.6%, while ATV decreased 0.6% over prior year. Fourth quarter sales Signet’s total sales decreased 6.3% year over year to $2.5 billion in the fourth quarter, while total sales at constant exchange rates decreased 6.6%. Same store sales decreased 9.6%, compared to a decrease of 9.1% in the prior year quarter.
It is anticipated that discretionary spending in jewelry will continue to be adversely impacted by rising prices on necessities such as gas and groceries, and could further impact sales of the Company’s product assortments at lower and mid-tier price points.
While overall inflation has moderated, the Company anticipates that discretionary spending in categories such as jewelry will continue to be adversely impacted by high prices on necessities such as gas and groceries, and could further impact sales of the Company’s product assortments at all price points.
Adjusted EBITDA and Adjusted EBITDAR are considered important indicators of operating performance as they exclude the effects of financing and investing activities by eliminating the effects of interest, depreciation and amortization costs and certain accounting adjustments.
Adjusted EBITDA and Adjusted EBITDAR are considered important indicators of operating performance as they exclude the effects of financing and investing activities by eliminating the effects of interest, depreciation and amortization costs and certain accounting adjustments. Management believes these financial measures are helpful to investors and analysts to analyze trends in Signet’s business and evaluate Signet’s performance.
Since the reinstatement of share repurchases, the Company has repurchased approximately 9.3 million shares for $687.9 million under the 2017 Program, including, $376.1 million in Fiscal 2023.
Since the reinstatement of share repurchases in Fiscal 2022, the Company has repurchased approximately 11.2 million shares for $827.2 million under the 2017 Program, including $139.3 million in Fiscal 2024.
See Note 4, Note 17, and Note 28 of Item 8 for additional information. (2) Fiscal 2023 includes net asset impairment charges of $2.6 million. See Note 17 of Item 8 for additional information. nm Not meaningful. Interest expense, net In Fiscal 2023, interest expense, net was $13.5 million compared to $16.9 million in Fiscal 2022.
See Note 4, Note 16 and Note 26 of Item 8 for additional information. nm Not meaningful. Interest income (expense), net In Fiscal 2024, net interest income was $18.7 million compared to net interest expense of $13.5 million in Fiscal 2023.
See “Forward-Looking Statements” above as well as the “Risk Factors” section within Item 1A. Market and operating conditions The Company faces a highly competitive and dynamic retail landscape throughout the geographies where it does business, as well as a challenging global macro-economic environment as described above impacting the jewelry industry.
Market and operating conditions The Company faces a highly competitive and dynamic retail landscape throughout the geographies where it does business, as well as a challenging global macro-economic environment as described above impacting the jewelry industry. Refer to Item 1 for further information on the Company’s business, markets and strategy.
Fiscal 2022 includes ROU asset impairment gains, net recorded due to various impacts of COVID-19 to the Company’s business and related gains on terminations or modifications of leases, resulting from previously recorded impairments of the right of use assets in Fiscal 2021. Fiscal 2021 includes impairment charges related to the Company’s goodwill, intangible assets, and long-lived assets.
(3) Fiscal 2024 restructuring and asset impairment charges were incurred primarily as a result of the Company’s rationalization of store footprint and reorganization of certain centralized functions; Fiscal 2023 includes asset impairment charges related to the Company’s headquarters; Fiscal 2022 includes ROU asset impairment gains, net recorded due to various impacts of COVID-19 to the Company’s business and related gains on terminations or modifications of leases, resulting from previously recorded impairments of the right of use assets in Fiscal 2021.
Blue Nile is a leading online retailer of engagement rings and fine jewelry. The strategic acquisition of Blue Nile accelerates Signet's efforts to enhance its connected commerce capabilities and broaden its digital leadership across the jewelry category – all to further achieve meaningful operating synergies for the consumers and create value for shareholders.
The addition of Blue Nile accelerated Signet's efforts to enhance its connected commerce capabilities and broaden its digital leadership across the jewelry category – all while further achieving meaningful operating synergies for the consumers and creating value for shareholders.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe estimated changes in the fair value for foreign exchange rates are based on a 10% depreciation of the US dollar against British pound from the levels applicable at January 28, 2023 with all other variables remaining constant. There were no foreign exchange contracts outstanding in other foreign currencies as of January 28, 2023. 58 Table of Contents
Biggest changeThe estimated changes in the fair value for foreign exchange rates are based on a 10% depreciation of the US dollar against British pound and Canadian dollar from the levels applicable at February 3, 2024 with all other variables remaining constant.
Signet may enter into derivative transactions to hedge a significant portion of forecasted merchandise purchases using commodity forward purchase contracts, options, net zero premium collar arrangements, or some combination thereof. Additionally, the North America segment enters into forward foreign currency exchange contracts to manage the currency fluctuations associated with the Company’s Canadian operations.
Signet may enter into derivative transactions to hedge a significant portion of forecasted merchandise purchases using commodity forward purchase contracts, options, net zero premium collar arrangements, or some combination thereof. Additionally, the North America reportable segment enters into forward foreign currency exchange contracts to manage the currency fluctuations associated with the Company’s Canadian operations.
As a portion of the International segment’s purchases are denominated in US dollars and its net cash flows are in British pounds, Signet’s policy is to enter into forward foreign currency exchange contracts and foreign currency swaps to manage the exposure to the US dollar.
As a portion of the International reportable segment’s purchases are denominated in US dollars and its net cash flows are in British pounds, Signet’s policy is to enter into forward foreign currency exchange contracts and foreign currency swaps to manage the exposure to the US dollar.
In translating the results of the International segment and the Canadian subsidiary of the North America segment, Signet’s results are subject to fluctuations in the exchange rates between the US dollar and both the British pound and Canadian dollar.
In translating the results of the International reportable segment and the Canadian subsidiary of the North America reportable segment, Signet’s results are subject to fluctuations in the exchange rates between the US dollar and both the British pound and Canadian dollar.
The International segment buys certain products and materials on international markets that are priced in US dollars, and therefore has an exposure to exchange rates on the cost of goods sold. Signet uses certain derivative financial instruments to hedge a portion of this exposure within treasury guidelines approved by the Board.
The International reportable segment buys certain products and materials on international markets that are priced in US dollars, and therefore has an exposure to exchange rates on the cost of goods sold. Signet uses certain derivative financial instruments to hedge a portion of this exposure within treasury guidelines and approved by the Signet CFO.
An analysis quantifying the fair value change in derivative financial instruments held by Signet to manage its exposure to foreign exchange rates is detailed in Note 21 of Item 8.
An analysis quantifying the fair value change in derivative financial instruments held by Signet to manage its exposure to foreign exchange rates is detailed in Note 20 of Item 8.
When deemed appropriate by management, it is Signet’s policy to minimize the impact of precious metal commodity price volatility on operating results through the use of commodity forward purchase contracts, or by entering into either purchase options or net zero premium collar arrangements, within treasury guidelines approved by the Board.
When deemed appropriate by management, it is Signet’s policy to minimize the impact of precious metal commodity price volatility on operating results through the use of commodity forward purchase contracts, or by entering into either purchase options or net zero premium collar arrangements, within treasury guidelines and approved by the Signet CFO.
Signet’s objective is to minimize net foreign exchange exposure to the consolidated statements of operations on British pound denominated items through managing this level of cash, British pound denominated intercompany balances and US dollar to British pound swaps.
Signet’s objective is to minimize net foreign exchange exposure to the consolidated statements of operations on British pound denominated items through managing this level of cash, British pound denominated intercompany balances and US dollar to 57 Table of Contents British pound swaps.
In Fiscal 2023, approximately 32% of the International segment’s goods purchased were transacted in US dollars (Fiscal 2022: 35%). Signet holds a fluctuating amount of British pounds reflecting the cash generating characteristics of the International segment.
In Fiscal 2024, approximately 32% of the International reportable segment’s goods purchased were transacted in US dollars (Fiscal 2023: 32%). Signet holds a fluctuating amount of British pounds reflecting the cash generating characteristics of the International reportable segment.
Signet’s exposure to market risk is managed by Signet’s Treasury Committee. Where deemed necessary to achieve the objective of reducing market risk volatility on Signet’s operating results, certain derivative instruments are entered into after review and approval by the Treasury Committee. Signet uses derivative financial instruments for risk management purposes only.
Signet’s exposure to market risk is managed by Signet’s senior management. Where deemed necessary to achieve the objective of reducing market risk volatility on Signet’s operating results, certain derivative instruments are entered into after review and approval by the Company’s Chief Financial Officer (“CFO”). Signet uses derivative financial instruments for risk management purposes only.
Foreign Currency Exchange Rate Risk Approximately 90% of Signet’s total assets were held in entities whose functional currency is the US dollar at January 28, 2023 and the Company generated approximately 91% of its sales in US dollars in Fiscal 2023. Remaining assets and sales are primarily in British pounds and Canadian dollars.
Foreign Currency Exchange Rate Risk Approximately 91% of Signet’s total assets were held in entities whose functional currency is the US dollar at February 3, 2024 and the Company generated approximately 91% of its sales in US dollars in Fiscal 2024. Remaining assets and sales are primarily in British pounds and Canadian dollars.
The interest rates earned on cash and cash equivalents will fluctuate in line with short-term interest rates. 56 Table of Contents MARKET RISK MANAGEMENT POLICY A committee of the Board is responsible for the implementation of market risk management policies within the Company’s treasury policies and guidelines framework, which are deemed to be appropriate by the Board for the management of market risk.
The interest rates earned on cash and cash equivalents will fluctuate in line with short-term interest rates. MARKET RISK MANAGEMENT POLICY The Finance Committee of the Board is responsible for monitoring market and liquidity risk within the Company’s treasury policies and guidelines framework, which are deemed to be appropriate by the Board for the management of market risk.
As of January 28, 2023, a hypothetical 100 basis point increase in interest rates would result in no additional annual interest expense since all of the Company’s variable rate debt has been repaid.
As of February 3, 2024, a hypothetical 100 basis point increase in interest rates would result in no additional annual interest expense since all of the Company’s variable rate debt has been repaid.
Fair value gains (losses) arising from: (in millions) Fair Value January 28, 2023 10% depreciation of $ against £ Fair Value January 29, 2022 Foreign exchange contracts $ (0.6) $ 0.1 $ (1.0) 57 Table of Contents The amounts generated from the sensitivity analysis quantify the impact of market risk assuming that certain adverse market conditions, specified in the table above, occur.
Fair value gains (losses) arising from: (in millions) Fair Value February 3, 2024 10% depreciation of $ against £ 10% depreciation of $ against C$ Fair Value January 28, 2023 Foreign exchange contracts $ (0.2) $ 0.7 $ 4.5 $ (0.6) The amounts generated from the sensitivity analysis quantify the impact of market risk assuming that certain adverse market conditions, specified in the table above, occur.
Added
There were no foreign exchange contracts outstanding in other foreign currencies as of February 3, 2024. 58 Table of Contents

Other SIG 10-K year-over-year comparisons