Segment information

12 Months Ended

Feb. 01, 2020

Financial information for each of Signet’s reportable segments is presented in the tables below. Signet’s chief operating decision maker utilizes sales and operating income, after the elimination of any inter-segment transactions, to determine resource allocations and performance assessment measures. During the first quarter of Fiscal 2019, the Company realigned its organizational structure. The new structure allows for further integration of operational and product development processes and supports growth strategies. In accordance with this organizational change, beginning with quarterly reporting for the 13 weeks ended May 5, 2018, the Company reported three reportable segments as follows: North America, which consists of the legacy Sterling Jewelers and Zale divisions; International, which consists of the legacy UK Jewelry division; and Other. Signet’s sales are derived from the retailing of jewelry, watches, other products and services as generated through the management of its reportable segments.

The North America reportable segment operates across the US and Canada. Its US stores operate nationally in malls and off-mall locations principally as Kay (Kay Jewelers and Kay Jewelers Outlet), Jared (Jared The Galleria Of Jewelry and Jared Vault), Zales (Zales Jewelers and Zales Outlet) and Piercing Pagoda, which operates through mall-based kiosks. Its Canadian stores operate under the Peoples Jewellers store banner. The segment also operates a variety of mall-based regional banners, including Gordon’s Jewelers in the US and Mappins in Canada, and James Allen, which was acquired in the R2Net acquisition.

The International reportable segment operates stores in the UK, Republic of Ireland and Channel Islands. Its stores operate in shopping malls and off-mall locations principally under the H.Samuel and Ernest Jones banners.

The Other reportable segment consists of all non-reportable segments that are below the quantifiable threshold for separate disclosure as a reportable segment, including subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones and unallocated corporate administrative functions.



(in millions)	Fiscal 2020			Fiscal 2019			Fiscal 2018
Sales:
North America segment⁽¹⁾	$	5,565.8		$	5,641.7		$	5,615.2
International segment	518.0			576.5			616.7
Other	53.3			28.9			21.1
Total sales	$	6,137.1		$	6,247.1		$	6,253.0

Operating income (loss):
North America segment⁽²⁾	$	327.0		$	(621.1	)	$	656.1
International segment⁽³⁾	16.0			12.9			33.1
Other⁽⁴⁾	(184.7		)	(156.4		)	(109.3		)
Total operating income (loss)	158.3			(764.6		)	579.9
Interest expense	(35.6		)	(39.7		)	(52.7		)
Other non-operating income, net	7.0			1.7			—
Income (loss) before income taxes	$	129.7		$	(802.6	)	$	527.2

Depreciation and amortization:
North America segment	$	159.9		$	165.8		$	183.5
International segment	17.8			17.5			19.1
Other	0.3			0.3			0.8
Total depreciation and amortization	$	178.0		$	183.6		$	203.4

Capital additions:
North America segment	$	128.3		$	123.9		$	219.7
International segment	8.0			9.6			17.6
Other	—			—			0.1
Total capital additions	$	136.3		$	133.5		$	237.4


⁽¹⁾	Includes sales of $204.6 million, $218.3 million and $235.1 million generated by Canadian operations in Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.


⁽²⁾	Fiscal 2020 includes $47.7 million related to an immaterial out-of-period goodwill adjustment and $6.0 million related to inventory charges recorded in conjunction with the Company’s restructuring activities. See Note 18 and Note 7 for additional information.

Fiscal 2019 includes: 1) $731.8 million related to goodwill and intangible impairments; 2) $52.7 million related to inventory charges recorded in conjunction with the Company’s restructuring activities; and 3) $160.4 million from the valuation losses related to the sale of eligible non-prime in-house accounts receivable. See Note 18, Note 7 and Note 4 for additional information.

Fiscal 2018 amount includes a gain of $20.7 million related to the reversal of the allowance for credit losses for the in-house receivables sold, as well as the $10.2 million gain upon recognition of beneficial interest in connection with the sale of the prime portion of in-house receivables. See Note 4 for additional information.


⁽³⁾	Fiscal 2019 includes $3.8 million related to inventory charges recorded in conjunction with the Company’s restructuring activities. See Note 7 for additional information.


⁽⁴⁾	Fiscal 2020 includes $73.1 million related to charges recorded in conjunction with the Company’s restructuring activities including inventory charges and $33.2 million related to the proposed settlement of a previously disclosed shareholder litigation matter. See Note 7 and Note 27 for additional information.

Fiscal 2019 includes: 1) $69.4 million related to charges recorded in conjunction with the Company’s restructuring activities including inventory charges; 2) $11.0 million related to the resolution of a previously disclosed regulatory matter; 3) $7.0 million representing transaction costs associated with the sale of the non-prime in-house accounts receivable; and 4) $3.6 million of goodwill impairment. See Note 7, Note 27, Note 4 and Note 18 for additional information.

Fiscal 2018 includes: 1) $29.6 million of transaction costs related to the credit transaction; 2) $8.6 million of R2Net acquisition costs; and 3) $3.4 million of CEO transition costs. See Note 4 and Note 5 for additional information regarding credit transaction and acquisition of R2Net, respectively.



(in millions)	February 1, 2020		February 2, 2019
Total assets:
North America segment	$	5,240.2	$	3,943.0
International segment	546.4		367.4
Other	512.5		109.7
Total assets	$	6,299.1	$	4,420.1

Total long-lived assets:
North America segment	$	1,196.7	$	1,294.2
International segment	54.6		64.5
Other	3.2		3.4
Total long-lived assets	$	1,254.5	$	1,362.1