NYSE$SIG

Signet Jewelers LTD · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Exceeded top-line and bottom-line guidance, raised full year guidance inclusive of Blue Nile, and balanced inventory management with the lowest clearance in recent history.

Signet Jewelers reported strong third quarter results, exceeding both top-line and bottom-line guidance. Total sales were $1.6 billion, up 2.9% compared to Q3 of FY22. The company raised its full-year guidance with confidence in the sustainability of an annual double-digit non-GAAP operating margin.

  • Total sales were $1.6 billion, up 2.9% (up 4.2% on a constant currency basis) to unusually heightened sales in Q3 of FY22, resulting in part from government benefit programs and the Company's strategic transformation including marketing initiatives, and up 33.3% vs. Q3 of FY20.
  • Same store sales (“SSS”) down 7.6% to Q3 of FY22.
  • GAAP diluted earnings per share ("EPS") of $0.60, down from diluted EPS of $1.45 in Q3 of FY22, including $0.14 in charges relating to the fair value adjustment of acquired inventory as well as acquisition and integration-related charges.
  • Non-GAAP diluted EPS of $0.74, down from $1.43 in Q3 of FY22.

Headline financials

Total Revenue

$1.58B

Previous: $1.54B+2.9%
EPS (adj)

$0.74

Previous: $1.43-48.3%
Same-store sales growth

-7.6%

Previous: 18.9%-140.2%
Capital Expenditures

-$94.3M

Previous: -$50.5M-86.7%
Free Cash Flow

-$56.8M

Previous: $42.1M-234.9%
Net Income

$37.5M

Previous: $92.6M-59.5%
Operating Income

$48.4M

Previous: $107M-54.7%
Gross Profit

$553M

Previous: $576M-4.0%
Cash & Equivalents

$327M

Previous: $1.52B-78.4%
Total Assets

$6.35B

Previous: $6.39B-0.6%
Stock-Based Comp

$11.4M

Previous: $10.9M+4.6%

Revenue & EPS history

Signet · Revenue · Quarterly

$1.58B

Q3 2023+2.9%vs Q3 2022
Beat estimate in 9 of 15 quarters(60%)
ActualEstimate

Revenue by segment

Signet · $2.15B total across 3 segments · Q4 2020

  • North America
    $1.95B
  • International
    $186M
  • Other
    $13.3M

Forward guidance

Signet is providing its fourth quarter and full year Fiscal 2023 sales and operating income guidance on a non-GAAP basis.

Tailwinds

  • The Company’s outlook includes a level of consumer pressure, including inflation and the impact of stimulus, similar to what is currently being experienced.
  • The Company's outlook for the fourth quarter and the full year of Fiscal 2023 includes the impact of the Blue Nile acquisition and continuing unfavorable revenue impact from foreign currency.
  • Signet continues to anticipate some shift of consumer discretionary spending away from the jewelry category reflecting pent-up demand for experience-oriented categories.
  • Signet’s efforts to mitigate supply chain disruption have been effective thus far. Guidance assumes no significant disruptions in availability of inventory.
  • The Company’s outlook factors in some flexibility in the level of promotion during the 4th Quarter of Fiscal 2023.

Headwinds

  • The Company’s outlook does not include a material worsening of macroeconomic factors which could impact consumer spending patterns and have associated impacts on business performance.
  • Annual effective tax rate of approximately 17% assumes no additional discrete items and no changes in current tax laws during the remainder of Fiscal 2023.
  • The above guidance excludes non-recurring charges for Fiscal 2023 related to the resolution of a previously disclosed legal matter of $190 million, approximately $17 million relating to the fair value adjustment of acquired inventory that will be recognized within cost of sales in Fiscal 2023, and the non-cash, non-operating charges for the buy-out of substantially all of the UK pension obligations of approximately $135 million.
  • Earnings per share includes share repurchases through December 2, 2022, as well as the dilutive effect of the 8.1 million preferred shares.
  • Capital investments up to $215 million, reflecting continued investments in Connected Commerce capabilities, banner differentiation and technology harmonization. The expected capital investments have been reduced as a result of supply chain delays related to differentiated banner investment in stores.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

+1.4%

Avg return

Earnings day

+0.2%

Avg return

5 days after

+0.8%

Avg return

30 days after

57%

39 / 68 earnings

Positive

+27.6%

Q3 2023

Best reaction

-30.1%

Q3 2018

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2026+13.0%-9.4%-0.3%
Q3 2026-7.2%-13.3%-13.4%
Q2 2026+2.2%+6.4%+11.9%
Q1 2026+12.2%+16.3%+25.8%
Q4 2025+17.3%+26.9%+14.7%
Q3 2025-7.0%-14.1%-21.6%
Q2 2025+16.7%+19.8%+23.1%
Q1 2025-19.6%-15.8%-18.8%
Q4 2024-12.2%-7.2%-6.8%
Q3 2024+12.4%+14.7%+16.5%
Q2 2024+10.0%+4.3%+0.5%
Q1 2024-13.9%-15.7%-1.4%
Q4 2023+8.0%+10.0%+9.0%
Q3 2023+27.6%+18.1%+16.1%
Q2 2023-15.6%-18.2%-12.5%
Q1 2023-0.9%-1.8%-10.5%
Q4 2022+3.1%+6.4%-0.2%
Q3 2022-9.1%-3.9%-6.4%
Q2 2022+3.3%-3.3%+1.1%
Q1 2022+22.5%+21.6%+25.5%
Q4 2021+2.7%-8.8%+6.9%
Q3 2021-1.8%-5.1%-8.5%
Q2 2021+3.7%-3.7%+4.9%
Q1 2021-27.2%-32.9%-40.1%
Q4 2020+7.8%-12.0%+3.8%
Q3 2020+23.6%+24.9%+14.4%
Q2 2020+27.5%+53.0%+47.6%
Q1 2020+1.6%+2.0%-10.9%
Q4 2019+2.4%-6.1%-16.3%
Q3 2019-22.9%-30.7%-30.7%
Q2 2019+17.5%+15.6%+20.6%
Q1 2019+22.1%+28.0%+33.6%
Q4 2018-21.6%-17.6%-19.4%
Q3 2018-30.1%-34.3%-26.5%
Q2 2018+20.8%+21.0%+24.1%
Q1 2018-9.6%-12.2%+7.1%
Q4 2017+8.4%+5.3%+5.9%
Q3 2017+5.6%+4.7%+5.1%
Q2 2017-15.5%-16.3%-17.3%
Q1 2017-8.1%-8.7%-24.3%
Q4 2016+4.0%
Q3 2016-3.7%
Q2 2016+15.1%
Q1 2016-2.9%
Q4 2015+7.1%
Q3 2015+5.2%
Q2 2015+9.1%
Q1 2015+4.7%
Q4 2014+7.7%
Q3 2014+0.9%
Q2 2014-4.9%
Q1 2014-2.4%
Q4 2013+6.8%
Q3 2013-2.7%
Q2 2013-2.0%
Q1 2013-7.3%
Q4 2012-3.5%
Q3 2012-3.8%
Q2 2012+6.5%
Q1 2011+5.7%
Q1 2012-1.8%
Q4 2009+2.7%
Q4 2011+2.7%
Q3 2011+0.4%
Q3 2010+0.4%
Q2 2010-6.0%
Q4 2010-6.0%
Q2 2011-6.0%

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