Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(Exact name of Registrant as specified in its charter) |
Not Applicable | ||
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on which Registered | ||
PAGE | ||||||
13 weeks ended | |||||||||
(in millions, except per share amounts) | May 2, 2020 | May 4, 2019 | Notes | ||||||
Sales | $ | $ | 3 | ||||||
Cost of sales | ( | ) | ( | ) | |||||
Restructuring charges - cost of sales | 5 | ||||||||
Gross margin | |||||||||
Selling, general and administrative expenses | ( | ) | ( | ) | |||||
Restructuring charges | ( | ) | ( | ) | 5 | ||||
Asset impairments | ( | ) | 13 | ||||||
Other operating income, net | |||||||||
Operating income (loss) | ( | ) | ( | ) | 4 | ||||
Interest expense, net | ( | ) | ( | ) | |||||
Other non-operating income, net | |||||||||
Income (loss) before income taxes | ( | ) | ( | ) | |||||
Income taxes | 10 | ||||||||
Net income (loss) | $ | ( | ) | $ | ( | ) | |||
Dividends on redeemable convertible preferred shares | ( | ) | ( | ) | 7 | ||||
Net income (loss) attributable to common shareholders | $ | ( | ) | $ | ( | ) | |||
Earnings (loss) per common share: | |||||||||
Basic | $ | ( | ) | $ | ( | ) | 8 | ||
Diluted | $ | ( | ) | $ | ( | ) | 8 | ||
Weighted average common shares outstanding: | |||||||||
Basic | 8 | ||||||||
Diluted | 8 |
13 weeks ended | ||||||||||||||||||||||||||
May 2, 2020 | May 4, 2019 | |||||||||||||||||||||||||
(in millions) | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | ||||||||||||||||||||
Net income (loss) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||
Unrealized gain (loss) | ||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||
Unrealized gain (loss) | ( | ) | ( | ) | ||||||||||||||||||||||
Reclassification adjustment for (gains) losses to net income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Pension plan: | ||||||||||||||||||||||||||
Reclassification adjustment to net income for amortization of actuarial (gains) losses | ( | ) | ||||||||||||||||||||||||
Reclassification adjustment to net income for amortization of net prior service credits | ||||||||||||||||||||||||||
Total other comprehensive income (loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||
Total comprehensive income (loss) | $ | ( | ) | $ | ( | ) |
(in millions, except par value per share amount) | May 2, 2020 | February 1, 2020 | May 4, 2019 | Notes | |||||||||
Assets | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||
Accounts receivable | 11 | ||||||||||||
Other current assets | |||||||||||||
Income taxes | |||||||||||||
Inventories, net | 12 | ||||||||||||
Total current assets | |||||||||||||
Non-current assets: | |||||||||||||
Property, plant and equipment, net of accumulated depreciation of $1,092.6, $1,064.7 and $1,319.6, respectively | |||||||||||||
Operating lease right-of-use assets | 14 | ||||||||||||
Goodwill | 15 | ||||||||||||
Intangible assets, net | 15 | ||||||||||||
Other assets | |||||||||||||
Deferred tax assets | |||||||||||||
Total assets | $ | $ | $ | ||||||||||
Liabilities, Redeemable convertible preferred shares, and Shareholders’ equity | |||||||||||||
Current liabilities: | |||||||||||||
Loans and overdrafts | $ | $ | $ | 18 | |||||||||
Accounts payable | |||||||||||||
Accrued expenses and other current liabilities | |||||||||||||
Deferred revenue | 3 | ||||||||||||
Operating lease liabilities | 14 | ||||||||||||
Income taxes | |||||||||||||
Total current liabilities | |||||||||||||
Non-current liabilities: | |||||||||||||
Long-term debt | 18 | ||||||||||||
Operating lease liabilities | 14 | ||||||||||||
Other liabilities | |||||||||||||
Deferred revenue | 3 | ||||||||||||
Deferred tax liabilities | |||||||||||||
Total liabilities | |||||||||||||
Commitments and contingencies | 21 | ||||||||||||
Series A redeemable convertible preferred shares of $.01 par value: authorized 500 shares, 0.625 shares outstanding (February 1, 2020 and May 4, 2019: 0.625 shares outstanding) | 6 | ||||||||||||
Shareholders’ equity: | |||||||||||||
Common shares of $0.18 par value: authorized 500 shares, 52.3 shares outstanding (February 1, 2020: 52.3 outstanding; May 4, 2019: 52.2 outstanding) | |||||||||||||
Additional paid-in capital | |||||||||||||
Other reserves | |||||||||||||
Treasury shares at cost: 17.7 shares (February 1, 2020: 17.7 shares; May 4, 2019: 17.8 shares) | ( | ) | ( | ) | ( | ) | |||||||
Retained earnings | |||||||||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | 9 | ||||||
Total shareholders’ equity | |||||||||||||
Total liabilities, redeemable convertible preferred shares and shareholders’ equity | $ | $ | $ |
13 weeks ended | ||||||||
(in millions) | May 2, 2020 | May 4, 2019 | ||||||
Cash flows from operating activities | ||||||||
Net income (loss) | $ | ( | ) | $ | ( | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | ||||||||
Amortization of unfavorable leases and contracts | ( | ) | ( | ) | ||||
Share-based compensation | ||||||||
Deferred taxation | ||||||||
Asset impairments | ||||||||
Restructuring charges | ||||||||
Other non-cash movements | ( | ) | ||||||
Changes in operating assets and liabilities: | ||||||||
Decrease in accounts receivable | ||||||||
Decrease in other assets and other receivables | ||||||||
Increase in inventories | ( | ) | ( | ) | ||||
Increase in accounts payable | ||||||||
Decrease in accrued expenses and other liabilities | ( | ) | ( | ) | ||||
Change in operating lease assets and liabilities | ( | ) | ||||||
(Decrease) increase in deferred revenue | ( | ) | ||||||
Changes in income tax receivable and payable | ( | ) | ( | ) | ||||
Pension plan contributions | ( | ) | ( | ) | ||||
Net cash (used in) provided by operating activities | ( | ) | ||||||
Investing activities | ||||||||
Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
Purchase of available-for-sale securities | ( | ) | ||||||
Proceeds from sale of available-for-sale securities | ||||||||
Net cash used in investing activities | ( | ) | ( | ) | ||||
Financing activities | ||||||||
Dividends paid on common shares | ( | ) | ( | ) | ||||
Dividends paid on redeemable convertible preferred shares | ( | ) | ( | ) | ||||
Repayments of term loans | ( | ) | ||||||
Proceeds from revolving credit facilities | ||||||||
Repayments of revolving credit facilities | ( | ) | ||||||
Decrease of bank overdrafts | ( | ) | ( | ) | ||||
Other financing activities | ( | ) | ( | ) | ||||
Net cash provided by (used in) financing activities | ( | ) | ||||||
Cash and cash equivalents at beginning of period | ||||||||
Increase in cash and cash equivalents | ||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
Cash and cash equivalents at end of period | $ | $ |
(in millions) | Common shares at par value | Additional paid-in capital | Other reserves | Treasury shares | Retained earnings | Accumulated other comprehensive loss | Total shareholders’ equity | ||||||||||||||||||||
Balance at February 1, 2020 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||
Net income (loss) | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Dividends declared: | |||||||||||||||||||||||||||
Preferred shares, $12.50/share | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Net settlement of equity-based awards | — | ( | ) | — | ( | ) | ( | ) | — | ( | ) | ||||||||||||||||
Share-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||
Balance at May 2, 2020 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ |
(in millions) | Common shares at par value | Additional paid-in capital | Other reserves | Treasury shares | Retained earnings | Accumulated other comprehensive loss | Total shareholders’ equity | ||||||||||||||||||||
Balance at February 2, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||
Net income (loss) | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Dividends declared: | |||||||||||||||||||||||||||
Common shares, $0.37/share | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Preferred shares, $12.50/share | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Net settlement of equity-based awards | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||
Balance at May 4, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ |
Standard | Description | |
ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, issued July 2018. | Aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of this ASU did not have a material impact on the Company’s financial position or results of operations. | |
ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, issued August 2018. | Modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans and clarifies the disclosure requirements regarding projected benefit obligations and accumulated benefit obligations. The ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted. The new guidance does not affect the existing recognition or measurement guidance, and therefore had no impact on the Company’s financial condition or results of operations. | |
ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, issued August 2018. | Modifies the disclosure requirements on fair value measurements in Topic 820 and eliminates ‘at a minimum’ from the phrase ‘an entity shall disclose at a minimum’ to promote the appropriate exercise of discretion by entities when considering fair value disclosures and to clarify that materiality is an appropriate consideration. The adoption of this ASU did not have a material impact on the Company’s financial position or results of operations. | |
ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued June 2016. | Requires entities to measure and recognize expected credit losses for financial assets measured at amortized cost basis. The estimate of expected credit losses should consider historical information, current information, and reasonable and supportable forecasts of expected losses over the remaining contractual life that affect collectability. The adoption of this ASU did not have a material impact on the Company’s financial position or results of operations. |
13 weeks ended May 2, 2020 | 13 weeks ended May 4, 2019 | ||||||||||||||||||||||||||||||
(in millions) | North America | International | Other | Consolidated | North America | International | Other | Consolidated | |||||||||||||||||||||||
Sales by banner: | |||||||||||||||||||||||||||||||
Kay | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Zales | |||||||||||||||||||||||||||||||
Jared | |||||||||||||||||||||||||||||||
Piercing Pagoda | |||||||||||||||||||||||||||||||
James Allen | |||||||||||||||||||||||||||||||
Peoples | |||||||||||||||||||||||||||||||
International segment | |||||||||||||||||||||||||||||||
Other(1) | |||||||||||||||||||||||||||||||
Total sales | $ | $ | $ | $ | $ | $ | $ | $ |
(1) | Includes sales from Signet’s diamond sourcing initiative. |
13 weeks ended May 2, 2020 | 13 weeks ended May 4, 2019 | ||||||||||||||||||||||||||||||
(in millions) | North America | International | Other | Consolidated | North America | International | Other | Consolidated | |||||||||||||||||||||||
Sales by product: | |||||||||||||||||||||||||||||||
Bridal | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Fashion | |||||||||||||||||||||||||||||||
Watches | |||||||||||||||||||||||||||||||
Other(1) | |||||||||||||||||||||||||||||||
Total sales | $ | $ | $ | $ | $ | $ | $ | $ |
(1) | Other revenue primarily includes gift, beads and other miscellaneous jewelry sales, repairs, service plan and other miscellaneous non-jewelry sales. |
13 weeks ended May 2, 2020 | 13 weeks ended May 4, 2019 | ||||||||||||||||||||||||||||||
(in millions) | North America | International | Other | Consolidated | North America | International | Other | Consolidated | |||||||||||||||||||||||
Sales by channel: | |||||||||||||||||||||||||||||||
Store | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
E-commerce | |||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||
Total sales | $ | $ | $ | $ | $ | $ | $ | $ |
(in millions) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
Deferred ESP selling costs | |||||||||||
Other current assets | $ | $ | $ | ||||||||
Other assets | |||||||||||
Total deferred ESP selling costs | $ | $ | $ |
(in millions) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
ESP deferred revenue | $ | $ | $ | ||||||||
Voucher promotions and other | |||||||||||
Total deferred revenue | $ | $ | $ | ||||||||
Disclosed as: | |||||||||||
Current liabilities | $ | $ | $ | ||||||||
Non-current liabilities | |||||||||||
Total deferred revenue | $ | $ | $ |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
ESP deferred revenue, beginning of period | $ | $ | |||||
Plans sold(1) | |||||||
Revenue recognized(2) | ( | ) | ( | ) | |||
ESP deferred revenue, end of period | $ | $ |
(1) | Includes impact of foreign exchange translation. |
(2) |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Sales: | |||||||
North America segment | $ | $ | |||||
International segment | |||||||
Other | |||||||
Total sales | $ | $ | |||||
Operating income (loss): | |||||||
North America segment(1) | $ | ( | ) | $ | |||
International segment(2) | ( | ) | ( | ) | |||
Other(3) | ( | ) | ( | ) | |||
Total operating income (loss) | ( | ) | ( | ) | |||
Interest expense | ( | ) | ( | ) | |||
Other non-operating income, net | |||||||
Income (loss) before income taxes | $ | ( | ) | $ | ( | ) |
(1) | Operating income (loss) during the 13 weeks ended May 2, 2020 and May 4, 2019 includes a $ |
(2) | Operating income (loss) during the 13 weeks ended May 2, 2020 includes charges of $ |
(3) | Operating income (loss) during the 13 weeks ended May 2, 2020 includes a charge of $ |
13 weeks ended | |||||||||
(in millions) | Statement of operations caption | May 2, 2020 | May 4, 2019 | ||||||
Inventory charges | Restructuring charges - cost of sales | $ | ( | ) | $ | ||||
Other Plan related expenses | Restructuring charges | ||||||||
Total Signet Path to Brilliance Plan expenses | $ | $ |
13 weeks ended | Cumulative amount | |||||||
(in millions) | May 2, 2020 | May 2, 2020 | ||||||
Inventory charges | $ | ( | ) | $ | ||||
Termination benefits | ||||||||
Store closure and other costs | ||||||||
Total Signet Path to Brilliance Plan expenses | $ | $ |
(in millions) | Termination benefits | Store closure and other costs | Consolidated | |||||||||
Balance at February 1, 2020 | $ | $ | $ | |||||||||
Payments and other adjustments | ( | ) | ( | ) | ( | ) | ||||||
Charged to expense | ||||||||||||
Balance at May 2, 2020 | $ | $ | $ |
(in millions, except conversion rate and conversion price) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
Conversion rate | |||||||||||
Conversion price | $ | $ | $ | ||||||||
Potential impact of preferred shares if-converted to common shares | |||||||||||
Liquidation preference | $ | $ | $ |
Fiscal 2021 | Fiscal 2020 | ||||||||||||||
(in millions, except per share amounts) | Cash dividend per share | Total dividends | Cash dividend per share | Total dividends | |||||||||||
First quarter(1) | $ | $ | $ | $ |
(1) | Signet’s dividend policy for common shares results in the dividend payment date being a quarter in arrears from the declaration date. As a result, as of May 4, 2019, $ |
Fiscal 2021 | Fiscal 2020 | ||||||||||||||
(in millions, except per share amounts) | Dividends per share | Total dividends | Dividends per share | Total dividends | |||||||||||
First quarter(1) | $ | $ | $ | $ |
(1) | Signet’s preferred shares dividends result in the dividend payment date being a quarter in arrears from the declaration date. As a result, as of May 2, 2020 and May 4, 2019, $ |
13 weeks ended | |||||||
(in millions, except per share amounts) | May 2, 2020 | May 4, 2019 | |||||
Numerator: | |||||||
Net income (loss) attributable to common shareholders | $ | ( | ) | $ | ( | ) | |
Denominator: | |||||||
Weighted average common shares outstanding | |||||||
EPS – basic | $ | ( | ) | $ | ( | ) |
13 weeks ended | |||||||
(in millions, except per share amounts) | May 2, 2020 | May 4, 2019 | |||||
Numerator: | |||||||
Net income (loss) attributable to common shareholders | $ | ( | ) | $ | ( | ) | |
Denominator: | |||||||
Weighted average common shares outstanding | |||||||
EPS – diluted | $ | ( | ) | $ | ( | ) |
13 weeks ended | |||||
(in millions) | May 2, 2020 | May 4, 2019 | |||
Share awards | |||||
Potential impact of preferred shares | |||||
Total anti-dilutive shares |
Pension plan | |||||||||||||||||||||||
(in millions) | Foreign currency translation | Gains (losses) on available-for-sale securities, net | Gains (losses) on cash flow hedges | Actuarial gains (losses) | Prior service credits (costs) | Accumulated other comprehensive income (loss) | |||||||||||||||||
Balance at February 1, 2020 | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||
Other comprehensive income (loss) (“OCI”) before reclassifications | ( | ) | ( | ) | |||||||||||||||||||
Amounts reclassified from AOCI to net income | ( | ) | ( | ) | |||||||||||||||||||
Net current period OCI | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Balance at May 2, 2020 | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Amounts reclassified from AOCI | ||||||||||
13 weeks ended | ||||||||||
(in millions) | May 2, 2020 | May 4, 2019 | Statement of operations caption | |||||||
Losses (gains) on cash flow hedges: | ||||||||||
Foreign currency contracts | $ | $ | ( | ) | Cost of sales (see Note 16) | |||||
Interest rate swaps | ( | ) | Interest expense, net (see Note 16) | |||||||
Commodity contracts | ( | ) | Cost of sales (see Note 16) | |||||||
Total before income tax | ( | ) | ( | ) | ||||||
Losses (gains) on dedesignating cash flow hedges: | ||||||||||
Foreign currency contracts | ( | ) | Other operating income (loss) (see Note 16) | |||||||
Commodity contracts | ( | ) | Other operating income (loss) (see Note 16) | |||||||
Total before income tax | ( | ) | ||||||||
Income taxes | ||||||||||
Net of tax | ( | ) | ( | ) | ||||||
Defined benefit pension plan items: | ||||||||||
Amortization of unrecognized actuarial losses | Other non-operating income, net | |||||||||
Amortization of unrecognized net prior service credits | Other non-operating income, net | |||||||||
Total before income tax | ||||||||||
Income taxes | ( | ) | ||||||||
Net of tax | ||||||||||
Total reclassifications, net of tax | $ | ( | ) | $ | ( | ) |
13 weeks ended | |||||
May 2, 2020 | May 4, 2019 | ||||
Estimated annual effective tax rate before discrete items | % | % | |||
Discrete items recognized | % | ( | )% | ||
Effective tax rate recognized in statement of operations | % | % |
(in millions) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
Accounts receivable, held for investment | $ | $ | $ | ||||||||
Accounts receivable, held for sale | |||||||||||
Accounts receivable | $ | $ | $ |
(in millions) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
Raw materials | $ | $ | $ | ||||||||
Finished goods | |||||||||||
Total inventories | $ | $ | $ |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Goodwill impairment (1) | $ | $ | |||||
Indefinite-lived intangible asset impairment (1) | |||||||
Property, plant and equipment impairment | |||||||
Operating lease ROU asset impairment | |||||||
Total | $ | $ |
(1) | Refer to Note 15 for additional information. |
May 2, 2020 | |||
Weighted average remaining lease term (in years) | |||
Weighted average discount rate | % |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Operating lease cost | $ | $ | |||||
Short-term lease cost | |||||||
Variable lease cost | |||||||
Sublease income | ( | ) | ( | ) | |||
Total lease cost | $ | $ |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||
Operating cash flows from operating leases | $ | $ | |||||
Operating lease right-of-use assets obtained in exchange for lease obligations | |||||||
Reduction in the carrying amount of right-of-use assets (1) |
(1) | Amount excludes impairment of right-of-use assets of $ |
(in millions) | May 2, 2020 | |||
Remainder of Fiscal 2021 | $ | |||
Fiscal 2022 | ||||
Fiscal 2023 | ||||
Fiscal 2024 | ||||
Fiscal 2025 | ||||
Thereafter | ||||
Total minimum lease payments | ||||
Less: Imputed interest | ( | ) | ||
Present value of lease liabilities | $ |
(in millions) | North America | |||
Balance at February 2, 2019 | $ | |||
Impairment(1) | ( | ) | ||
Impact of foreign exchange and other adjustments | ( | ) | ||
Balance at February 1, 2020 | ||||
Impairment | ( | ) | ||
Impact of foreign exchange | ( | ) | ||
Balance at May 2, 2020 | $ |
(1) | During Fiscal 2020, an immaterial out-of-period adjustment was recognized related to an error in the calculation of goodwill impairments during Fiscal 2019. |
May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||||||||||||||||||||||||||||
(in millions) | Gross carrying amount | Accumulated amortization(1) | Net carrying amount | Gross carrying amount | Accumulated amortization(1) | Net carrying amount | Gross carrying amount | Accumulated amortization(1) | Net carrying amount | |||||||||||||||||||||||||||
Intangible assets, net: | ||||||||||||||||||||||||||||||||||||
Definite-lived intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
Indefinite-lived intangible assets | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Total intangible assets, net | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
Intangible liabilities, net | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) |
(1) | Accumulated amortization amounts related to the indefinite-lived intangible assets represents accumulated impairment losses recorded to date and includes the impact of foreign currency. |
Fair value of derivative assets | |||||||||||||
(in millions) | Balance sheet location | May 2, 2020 | February 1, 2020 | May 4, 2019 | |||||||||
Derivatives designated as hedging instruments: | |||||||||||||
Commodity contracts | Other current assets | $ | $ | $ | |||||||||
Commodity contracts | Other assets | ||||||||||||
Total derivative assets | |||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||
Foreign currency contracts | Other current assets | ||||||||||||
Total derivative assets | $ | $ | $ |
Fair value of derivative liabilities | |||||||||||||
(in millions) | Balance sheet location | May 2, 2020 | February 1, 2020 | May 4, 2019 | |||||||||
Derivatives designated as hedging instruments: | |||||||||||||
Foreign currency contracts | Other current liabilities | $ | $ | ( | ) | $ | ( | ) | |||||
Commodity contracts | Other current liabilities | ( | ) | ||||||||||
Commodity contracts | Other liabilities | ( | ) | ||||||||||
( | ) | ( | ) | ||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||
Foreign currency contracts | Other current liabilities | ( | ) | ( | ) | ||||||||
Total derivative liabilities | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(in millions) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
Foreign currency contracts | $ | $ | ( | ) | $ | ||||||
Commodity contracts | |||||||||||
Gains (losses) recorded in AOCI | $ | $ | $ |
13 weeks ended | |||||||||
(in millions) | Statement of operations caption | May 2, 2020 | May 4, 2019 | ||||||
Gains (losses) recorded in AOCI, beginning of period | $ | ( | ) | $ | |||||
Current period gains (losses) recognized in OCI | |||||||||
Losses (gains) reclassified from AOCI to net income | Cost of sales (1) | ( | ) | ||||||
Gains from ineffective hedges reclassified from AOCI to net income | Other operating income, net (1) | ( | ) | ||||||
Gains (losses) recorded in AOCI, end of period | $ | $ |
13 weeks ended | |||||||||
(in millions) | Statement of operations caption | May 2, 2020 | May 4, 2019 | ||||||
Gains (losses) recorded in AOCI, beginning of period | $ | $ | |||||||
Current period gains (losses) recognized in OCI | ( | ) | ( | ) | |||||
Losses (gains) reclassified from AOCI to net income | Cost of sales (1) | ( | ) | ||||||
Gains from ineffective hedges reclassified from AOCI to net income | Other operating income, net (1) | ( | ) | ||||||
Gains (losses) recorded in AOCI, end of period | $ | $ |
13 weeks ended | |||||||||
(in millions) | Statement of operations caption | May 2, 2020 | May 4, 2019 | ||||||
Gains recorded in AOCI, beginning of period | $ | $ | |||||||
(Gains) losses reclassified from AOCI to net income | Interest expense, net (1) | ( | ) | ||||||
Gains recorded in AOCI, end of period | $ | $ |
(1) | Refer to table below for total amounts of financial statement captions impacted by cash flow hedges. |
13 weeks ended | ||||||||
(in millions) | May 2, 2020 | May 4, 2019 | ||||||
Cost of sales | $ | ( | ) | $ | ( | ) | ||
Other operating income, net | ||||||||
Interest expense, net | $ | ( | ) | $ | ( | ) |
13 weeks ended | |||||||||
(in millions) | Statement of operations caption | May 2, 2020 | May 4, 2019 | ||||||
Foreign currency contracts | Other operating income, net | $ | ( | ) | $ |
May 2, 2020 | February 1, 2020 | May 4, 2019 | |||||||||||||||||||||||||||||||||
(in millions) | Carrying Value | Level 1 | Level 2 | Carrying Value | Level 1 | Level 2 | Carrying Value | Level 1 | Level 2 | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
US Treasury securities | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
Corporate equity securities | |||||||||||||||||||||||||||||||||||
Foreign currency contracts | |||||||||||||||||||||||||||||||||||
Commodity contracts | |||||||||||||||||||||||||||||||||||
US government agency securities | |||||||||||||||||||||||||||||||||||
Corporate bonds and notes | |||||||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||
Commodity contracts | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Total liabilities | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) |
May 2, 2020 | February 1, 2020 | May 4, 2019 | |||||||||||||||||||||
(in millions) | Carrying Value | Fair Value | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||
Long-term debt: | |||||||||||||||||||||||
Senior notes (Level 2) | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Term loans (Level 2) | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(in millions) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
Debt: | |||||||||||
Senior unsecured notes due 2024, net of unamortized discount | $ | $ | $ | ||||||||
ABL revolving facility | |||||||||||
FILO term loan facility | |||||||||||
Senior unsecured term loan | |||||||||||
Other loans and bank overdrafts | |||||||||||
Gross debt | $ | $ | $ | ||||||||
Less: Current portion of loans and overdrafts | ( | ) | ( | ) | ( | ) | |||||
Less: Unamortized debt issuance costs | ( | ) | ( | ) | ( | ) | |||||
Total long-term debt | $ | $ | $ |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Warranty reserve, beginning of period | $ | $ | |||||
Warranty expense | |||||||
Utilized(1) | ( | ) | ( | ) | |||
Warranty reserve, end of period | $ | $ |
(1) | Includes impact of foreign exchange translation. |
(in millions) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
Disclosed as: | |||||||||||
Current liabilities | $ | $ | $ | ||||||||
Non-current liabilities | |||||||||||
Total warranty reserve | $ | $ | $ |
• | The North America segment has 2,620 locations in the US and 116 locations in Canada as of May 2, 2020. |
◦ | In the US, the segment primarily operates in malls and off-mall locations 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); James Allen; and a variety of mall-based regional banners. Additionally, in the US, the segment operates mall-based kiosks under the Piercing Pagoda banner. |
◦ | In Canada, the segment primarily operates under the Peoples banner (Peoples Jewellers), as well as the Mappins Jewellers regional banner. |
• | The International segment has 436 stores in the UK, Republic of Ireland and Channel Islands as of May 2, 2020. The segment primarily operates in shopping malls and off-mall locations under the H.Samuel and Ernest Jones banners. |
(in millions) | May 2, 2020 | February 1, 2020 | May 4, 2019 | ||||||||
Cash and cash equivalents | $ | 1,066.6 | $ | 374.5 | $ | 195.1 | |||||
Less: Loans and overdrafts | (22.2 | ) | (95.6 | ) | (43.7 | ) | |||||
Less: Long-term debt | (1,336.0 | ) | (515.9 | ) | (639.0 | ) | |||||
Net debt | $ | (291.6 | ) | $ | (237.0 | ) | $ | (487.6 | ) |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Net cash (used in) provided by operating activities | $ | (7.6 | ) | $ | 105.4 | ||
Purchase of property, plant and equipment | (7.7 | ) | (24.6 | ) | |||
Free cash flow | $ | (15.3 | ) | $ | 80.8 |
3. | Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Net income (loss) | $ | (197.1 | ) | $ | (10.0 | ) | |
Income tax benefit | (109.5 | ) | (1.5 | ) | |||
Other non-operating income, net | (0.1 | ) | (0.3 | ) | |||
Interest expense, net | 7.1 | 9.2 | |||||
Depreciation and amortization | 37.3 | 41.0 | |||||
Amortization of unfavorable leases and contracts | (1.4 | ) | (1.4 | ) | |||
EBITDA | $ | (263.7 | ) | $ | 37.0 | ||
Restructuring charges - cost of sales | (0.4 | ) | — | ||||
Restructuring charges | 12.7 | 26.8 | |||||
Asset impairments | 136.3 | — | |||||
Shareholder settlement | 8.5 | — | |||||
Adjusted EBITDA | $ | (106.6 | ) | $ | 63.8 |
4. | Non-GAAP operating income (loss) |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Operating income (loss) | $ | (299.6 | ) | $ | (2.6 | ) | |
Restructuring charges - cost of sales | (0.4 | ) | — | ||||
Restructuring charges | 12.7 | 26.8 | |||||
Asset impairments | 136.3 | — | |||||
Shareholder settlement | 8.5 | — | |||||
Non-GAAP operating income (loss) | $ | (142.5 | ) | $ | 24.2 |
• | Same store sales: Down 38.9%. |
• | Total sales: $0.85 billion, decreased 40.5%. |
• | Operating income (loss): $(299.6) million compared to $(2.6) million. |
• | Diluted loss per share: $(3.96) compared to $(0.35) in prior year. |
First Quarter | |||||||||||||
Fiscal 2021 | Fiscal 2020 | ||||||||||||
(in millions) | $ | % of sales | $ | % of sales | |||||||||
Sales | $ | 852.1 | 100.0 | % | $ | 1,431.7 | 100.0 | % | |||||
Cost of sales | (648.3 | ) | (76.1 | ) | (932.3 | ) | (65.1 | ) | |||||
Restructuring charges - cost of sales | 0.4 | — | — | — | |||||||||
Gross margin | 204.2 | 24.0 | 499.4 | 34.9 | |||||||||
Selling, general and administrative expenses | (358.4 | ) | (42.1 | ) | (475.2 | ) | (33.2 | ) | |||||
Credit transaction, net | — | — | — | — | |||||||||
Restructuring charges | (12.7 | ) | (1.5 | ) | (26.8 | ) | (1.9 | ) | |||||
Asset impairments | (136.3 | ) | (16.0 | ) | — | — | |||||||
Other operating income, net | 3.6 | 0.4 | — | — | |||||||||
Operating income (loss) | (299.6 | ) | (35.2 | ) | (2.6 | ) | (0.2 | ) | |||||
Interest expense, net | (7.1 | ) | (0.8 | ) | (9.2 | ) | (0.6 | ) | |||||
Other non-operating income, net | 0.1 | — | 0.3 | — | |||||||||
Income (loss) before income taxes | (306.6 | ) | (36.0 | ) | (11.5 | ) | (0.8 | ) | |||||
Income tax benefit | 109.5 | 12.9 | 1.5 | 0.1 | |||||||||
Net income (loss) | $ | (197.1 | ) | (23.1 | )% | $ | (10.0 | ) | (0.7 | )% | |||
Dividends on redeemable convertible preferred shares | (8.2 | ) | nm | (8.2 | ) | nm | |||||||
Net income (loss) attributable to common shareholders | $ | (205.3 | ) | (24.1 | )% | $ | (18.2 | ) | (1.3 | )% |
nm | Not meaningful. |
Change from previous year | ||||||||||||||||||
First quarter of Fiscal 2021 | Same store sales | Non-same store sales, net | Total sales at constant exchange rate | Exchange translation impact | Total sales as reported | Total sales (in millions) | ||||||||||||
North America segment | (39.0 | )% | (0.9 | )% | (39.9 | )% | — | % | (39.9 | )% | $ | 781.1 | ||||||
International segment | (37.5 | )% | (2.0 | )% | (39.5 | )% | (2.3 | )% | (41.8 | )% | $ | 64.9 | ||||||
Other(1) | nm | nm | nm | nm | nm | $ | 6.1 | |||||||||||
Signet | (38.9 | )% | (1.3 | )% | (40.2 | )% | (0.3 | )% | (40.5 | )% | $ | 852.1 |
(1) | Includes sales from Signet’s diamond sourcing initiative. |
Average Merchandise Transaction Value(1)(2) | Merchandise Transactions | ||||||||||||||||||
Average Value | Change from previous year | Change from previous year | |||||||||||||||||
First Quarter | Fiscal 2021 | Fiscal 2020 | Fiscal 2021 | Fiscal 2020 | Fiscal 2021 | Fiscal 2020 | |||||||||||||
North America segment | $ | 359 | $ | 384 | (6.5 | )% | 1.3 | % | (34.5 | )% | (2.3 | )% | |||||||
International segment(3) | £ | 150 | £ | 143 | 2.7 | % | 0.2 | % | (41.2 | )% | (5.4 | )% |
(1) | Net merchandise sales within the North America segment include all merchandise product sales, net of discounts and returns. In addition, excluded from net merchandise sales are sales tax in the US, repair, extended service plan, insurance, employee and other miscellaneous sales. |
(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. |
(3) | Amounts for the International segment are denominated in British pounds. |
Fiscal 2021 | Fiscal 2020 | ||||||||||||
(in millions) | $ | % of segment sales | $ | % of segment sales | |||||||||
North America segment(1) | $ | (234.2 | ) | (30.0 | )% | $ | 48.1 | 3.7 | % | ||||
International segment(2) | (38.6 | ) | (59.5 | )% | (8.0 | ) | (7.2 | )% | |||||
Other(3) | (26.8 | ) | nm | (42.7 | ) | nm | |||||||
Operating income (loss) | $ | (299.6 | ) | (35.2 | )% | $ | (2.6 | ) | (0.2 | )% |
(1) | Operating income (loss) during the 13 weeks ended May 2, 2020 and May 4, 2019 includes a $0.4 million and $0.5 million benefit, respectively, recognized due to a change in inventory reserves previously recognized as part of the Company’s restructuring activities. Operating income (loss) during the 13 weeks ended May 2, 2020 includes charges of $8.9 million, primarily related to severance, store closure costs, and professional services recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information. Additionally, operating income (loss) during the 13 weeks ended May 2, 2020 includes asset impairment charges of $117.9 million. See Note 13 and Note 15 for additional information. |
(2) | Operating income (loss) during the 13 weeks ended May 2, 2020 includes charges of $3.6 million, primarily related to severance and professional services recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information. Additionally, operating income (loss) during the 13 weeks ended May 2, 2020 includes asset impairment charges of $18.4 million. See Note 13 for additional information. |
(3) | Operating income (loss) during the 13 weeks ended May 2, 2020 includes a charge of $8.5 million related to a proposed settlement of previously disclosed shareholder litigation matters. See Note 21 for additional information. Additionally, operating income (loss) during the 13 weeks ended May 2, 2020 and May 4, 2019 includes charges of $0.2 million and $27.3 million, respectively, primarily related to severance, store closure costs, and professional services recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information. |
nm | Not meaningful. |
• | changes in the level of inventory as a result of sales and other strategic initiatives (i.e. store count); |
• | 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. |
13 weeks ended | |||||||
(in millions) | May 2, 2020 | May 4, 2019 | |||||
Net cash (used in) provided by operating activities | $ | (7.6 | ) | $ | 105.4 | ||
Net cash used in investing activities | (6.4 | ) | (30.4 | ) | |||
Net cash provided by (used in) financing activities | 714.0 | (74.7 | ) | ||||
Increase in cash and cash equivalents | $ | 700.0 | $ | 0.3 | |||
Cash and cash equivalents at beginning of period | $ | 374.5 | $ | 195.4 | |||
Increase in cash and cash equivalents | 700.0 | 0.3 | |||||
Effect of exchange rate changes on cash and cash equivalents | (7.9 | ) | (0.6 | ) | |||
Cash and cash equivalents at end of period | $ | 1,066.6 | $ | 195.1 |
• | Net loss was $197.1 million compared to net loss of $10.0 million in the prior year period, an increase of $187.1 million. |
• | Net loss for the period was significantly impacted by non-cash changes in deferred tax liabilities, which increased $83.3 million compared to zero in the prior year period, and an increase in the income tax receivable of $192.7 million compared to cash used for income taxes of $2.7 million in the prior year. This was primarily the result of the net operating loss carried back and filed in the first quarter in accordance with the provisions of the CARES Act, offset by an increase in the valuation allowance related to certain deferred tax assets in the US. Refer to Note 10. |
• | Non-cash impairment charges were $136.3 million compared to zero in the prior year period. See Note 13 for additional information regarding asset impairments. |
• | Cash provided by other assets and other receivables was $72.4 million, compared to $28.1 million in the prior year period. |
• | Cash used for inventory was $77.2 million compared to cash used of $7.8 million in the prior year comparable period. |
• | Cash provided by changes in operating leases was $61.4 million in the first quarter, driven by the Company’s deferral of substantially all rent payments due in the months of April and May 2020. |
Store count by banner | February 1, 2020 | Openings | Closures | May 2, 2020 | |||||||
North America segment(1) | 2,757 | — | (21 | ) | 2,736 | ||||||
International segment(1) | 451 | — | (15 | ) | 436 | ||||||
Signet | 3,208 | — | (36 | ) | 3,172 |
(1) | The net change in selling square footage for Fiscal 2021 year to date for the North America and International segments was (0.9%) and (2.0%), respectively. |
• | the Guarantor entity was insolvent or rendered insolvent by reason of the incurrence; |
• | the Guarantor entity was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or |
• | the Guarantor entity intended to incur or believed (or reasonably should have believed) that it would incur, debts beyond its ability to pay as those debts matured. |
Summarized Balance Sheets | ||||||||
(in millions) | May 2, 2020 | February 1, 2020 | ||||||
Total current assets | $ | 4,389.5 | $ | 3,421.6 | ||||
Total non-current assets | 2,735.1 | 3,009.7 | ||||||
Total current liabilities | 2,245.4 | 2,119.2 | ||||||
Total non-current liabilities | 4,852.3 | 4,054.9 | ||||||
Redeemable preferred stock | 617.4 | 617.0 | ||||||
Total due from Non-Guarantors (1) | 600.5 | 573.2 | ||||||
Total due to Non-Guarantors (1) | 1,902.2 | 1,825.8 |
(1) | Amounts included in asset and liability subtotals above. |
Summarized Statements of Operations | ||||||||
13 weeks ended | Year Ended | |||||||
(in millions) | May 2, 2020 | February 1, 2020 | ||||||
Sales | $ | 800.5 | $ | 5,656.3 | ||||
Gross margin | 193.1 | 2,061.2 | ||||||
Income (loss) before income taxes (2) | (318.1 | ) | 1,437.8 | |||||
Net income (2) | (209.0 | ) | 1,416.2 |
(2) | Includes expense from intercompany transactions with Non-Guarantors of $21.1 million for the 13 weeks ended May 2, 2020, and income of $1.4 billion for the year ended February 1, 2020. Intercompany transactions primarily include intercompany dividends and interest. |
Period | Total number of shares purchased (1) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs(2) | Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs | |||||||||
February 2, 2020 to February 29, 2020 | 126 | $ | 24.68 | — | $ | 165,586,651 | |||||||
March 1, 2020 to March 28, 2020 | — | $ | — | — | $ | 165,586,651 | |||||||
March 29, 2020 to May 2, 2020 | 53,282 | $ | 7.42 | — | $ | 165,586,651 | |||||||
Total | 53,408 | $ | 7.46 | — | $ | 165,586,651 |
(1) | Includes 53,408 shares delivered to Signet by employees to satisfy minimum tax withholding obligations due upon the vesting or payment of stock awards under share-based compensation programs. These are not repurchased in connection with any publicly announced share repurchase programs. |
(2) | In June 2017, the Board of Directors authorized the repurchase of up to $600.0 million of Signet’s common shares (the “2017 Program”). The 2017 Program may be suspended or discontinued at any time without notice. |
Number | Description of Exhibits(1) | |
22.1* | ||
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
101.INS* | Inline XBRL Instance Document. | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
(1) | Signet hereby agrees to furnish to the U.S. Securities and Exchange Commission, upon request, a copy of each instrument that defines the rights of holders of long-term debt under which the total amount of securities authorized does not exceed 10% of the total assets of Signet and its subsidiaries on a consolidated basis that is not filed or incorporated by reference as an exhibit to our annual and quarterly reports. |
* | Filed herewith. |
Signet Jewelers Limited | ||||||
Date: | June 30, 2020 | By: | /s/ Joan Hilson | |||
Name: | Joan Hilson | |||||
Title: | Chief Financial Officer (Principal Financial Officer) |
Name of Entity | Place of Incorporation or Organization | |
SIGNET US FINANCE LIMITED | England & Wales | |
SIGNET GROUP LIMITED | England & Wales | |
SIGNET TRADING LIMITED | England & Wales | |
SIGNET US HOLDINGS, INC. | Delaware | |
SIGNET U.S. SERVICES INC. | Delaware | |
SIGNET GROUP TREASURY SERVICES INC. | Delaware | |
STERLING JEWELERS INC.(1) | Delaware | |
STERLING ECOMM LLC | Delaware | |
SIGNET GROUP SERVICES US INC. | Delaware | |
STERLING INC. | Ohio | |
ZALE CORPORATION | Delaware | |
ZALE DELAWARE, INC | Delaware | |
ZALE INTERNATIONAL, INC. | Delaware | |
ZAP, INC. | Delaware | |
ZGCO, LLC | Virginia | |
TXDC, L.P. | Texas | |
ZALE CANADA CO. | Canada | |
ZCSC, LLC | Delaware | |
ZALE PUERTO RICO, INC. | Puerto Rico | |
SIGNET SERVICE PLANS, INC. | Ohio |
By: | /s/ Virginia C. Drosos | |
Name: | Virginia C. Drosos | |
Title: | Chief Executive Officer |
By: | /s/ Joan Hilson | |
Name: | Joan Hilson | |
Title: | Chief Financial Officer (Principal Financial Officer) |
By: | /s/ Virginia C. Drosos | |
Name: | Virginia C. Drosos | |
Title: | Chief Executive Officer |
By: | /s/ Joan Hilson | |
Name: | Joan Hilson | |
Title: | Chief Financial Officer (Principal Financial Officer) |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Accumulated depreciation | $ 1,092.6 | $ 1,064.7 | $ 1,319.6 |
Common shares, par value (usd per share) | $ 0.18 | $ 0.18 | $ 0.18 |
Common shares, authorized (shares) | 500,000,000 | 500,000,000 | 500,000,000 |
Common shares, outstanding (shares) | 52,300,000 | 52,300,000 | 52,200,000 |
Treasury shares, shares (shares) | 17,700,000 | 17,700,000 | 17,800,000 |
Series A Redeemable Convertible Preferred Stock | |||
Preferred shares, par value (usd per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred shares, authorized (shares) | 500,000,000 | 500,000,000 | 500,000,000 |
Preferred shares, outstanding (shares) | 625,000 | 625,000 | 625,000 |
Condensed Consolidated Statements Of Shareholders' Equity (Unaudited) - USD ($) $ in Millions |
Total |
Common shares at par value |
Additional paid-in capital |
Other reserves |
Treasury shares |
Retained earnings |
Accumulated other comprehensive loss |
---|---|---|---|---|---|---|---|
Beginning Balance at Feb. 02, 2019 | $ 1,201.6 | $ 12.6 | $ 236.5 | $ 0.4 | $ (1,027.3) | $ 2,282.2 | $ (302.8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (10.0) | (10.0) | |||||
Other comprehensive income (loss) | (5.1) | (5.1) | |||||
Dividends declared: Common shares | (19.3) | (19.3) | |||||
Dividends declared: Preferred shares | (8.2) | (8.2) | |||||
Net settlement of equity-based awards | (1.6) | (7.8) | 27.5 | (21.3) | |||
Share-based compensation expense | 4.0 | 4.0 | |||||
Ending Balance at May. 04, 2019 | 1,161.4 | 12.6 | 232.7 | 0.4 | (999.8) | 2,223.4 | (307.9) |
Beginning Balance at Feb. 01, 2020 | 1,222.6 | 12.6 | 245.4 | 0.4 | (984.9) | 2,242.9 | (293.8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (197.1) | (197.1) | |||||
Other comprehensive income (loss) | (34.0) | (34.0) | |||||
Dividends declared: Common shares | (0.0) | ||||||
Dividends declared: Preferred shares | (8.2) | (8.2) | |||||
Net settlement of equity-based awards | (0.9) | (0.4) | (0.3) | (0.2) | |||
Share-based compensation expense | 1.4 | 1.4 | |||||
Ending Balance at May. 02, 2020 | $ 983.8 | $ 12.6 | $ 246.4 | $ 0.4 | $ (985.2) | $ 2,037.4 | $ (327.8) |
Condensed Consolidated Statements Of Shareholders' Equity (Unaudited) - Parenthetical - $ / shares |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||
Common stock, dividends (usd per share) | $ 0.00 | $ 0.37 |
Preferred stock, dividends (usd per share) | $ 12.50 | $ 12.50 |
Organization and principal accounting policies |
3 Months Ended |
---|---|
May 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and principal accounting policies | Organization and principal accounting policies Signet Jewelers Limited (“Signet” or the “Company”), a holding company incorporated in Bermuda, is the world’s largest retailer of diamond jewelry. The Company operates through its 100% owned subsidiaries with sales primarily in the United States (“US”), United Kingdom (“UK”) and Canada. Signet manages its business as three reportable segments: North America, International, and Other. The “Other” reportable segment consists of subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones and unallocated corporate administrative functions. See Note 4 for additional discussion of the Company’s segments. Signet’s sales are seasonal, with the fourth quarter accounting for approximately 35-40% of annual sales, with December being the highest volume month of the year. The “Holiday Season” consists of results for the months of November and December. As a result of our strategic credit outsourcing and transformation initiatives, we anticipate our operating profit will be almost entirely generated in the fourth quarter. The Company has evaluated and determined additional events or transactions subsequent to May 2, 2020 for potential recognition or disclosure through the date the condensed consolidated interim financial statements were issued. Based upon this evaluation, the Company identified and disclosed certain matters impacting the condensed consolidated interim financial statements for the quarter ended May 2, 2020, related to the extension of the Company’s sub-prime credit outsourcing agreements as described in Note 11, and the proposed settlement of previously disclosed claims related to the securities litigation as further disclosed in Note 21. Risks and Uncertainties - COVID-19 In December 2019, a novel coronavirus (“COVID-19”) was identified in Wuhan, China. In March 2020, the World Health Organization declared COVID-19 a global pandemic as a result of the further spread of the virus into all regions of the world, including those regions where the Company’s primary operations occur in North America and the UK. COVID-19 has significantly impacted consumer traffic and the Company’s retail sales, based on the perceived public health risk and government-imposed quarantines and restrictions of public gatherings and commercial activity to contain spread of the virus. Effective March 23, 2020, the Company temporarily closed all of its stores in North America, its diamond operations in New York and its support centers in the US. Additionally, effective March 24, 2020, the Company temporarily closed all of its stores in the UK. The COVID-19 pandemic has also disrupted the Company’s global supply chain, including the temporary closure of the Company’s diamond polishing operations in Botswana, and may cause additional disruptions to operations if employees of the Company become sick, are quarantined, or are otherwise limited in their ability to work at Company locations or travel for business. The Company has continued to fill e-commerce orders during the first quarter. In addition, as a result of the uncertainty surrounding the impacts of COVID-19, beginning in March 2020, there was a significant decline in all major domestic and global financial market indicators. The Company’s share price and market capitalization have significantly declined during the first quarter of Fiscal 2021 and the expected rate of recovery is unpredictable in light of the current economic conditions. The full extent and duration of the impact of COVID-19 on the Company’s operations and financial performance is currently unknown and depends on future developments that are uncertain and unpredictable, including the duration and possible resurgence of the pandemic, its impact on capital and financial markets on a macro-scale and the actions to contain the virus or mitigate its impact, among others. While the full extent of the impact of COVID-19 is currently unknown, it has had a significant impact on Signet’s results of operations and cash flows. However, management currently believes that it has adequate liquidity and business plans to continue to operate the business and mitigate the risks associated with COVID-19 for the 12 months following the date of this report. As a result of the potential risks identified related to COVID-19 on its condensed consolidated financial statements, the Company considered and performed the following assessments during the first quarter of Fiscal 2021: impairment assessments for goodwill, indefinite-lived intangible assets and store level long-lived assets (including property and equipment and operating lease right-of-use assets); assessment of rent concessions, including deferrals or other lease modifications; assessment of the effectiveness of certain foreign currency and commodity derivative financial instruments; assessment of the realizability of the Company’s deferred tax assets; and assessment of the impacts of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted on March 27, 2020. Basis of preparation The condensed consolidated financial statements of Signet are prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US generally accepted accounting principles (“US GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in Signet’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020 filed with the SEC on March 26, 2020. Use of estimates The preparation of these condensed consolidated financial statements, in conformity with US GAAP and SEC regulations for interim reporting, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and as a result of the above noted risks associated with COVID-19, it is reasonably possible that those estimates will change in the near term and the effect could be material. Estimates and assumptions are primarily made in relation to the valuation of accounts receivables, inventories, deferred revenue, derivatives, employee benefits, income taxes, contingencies, leases, asset impairments for goodwill, indefinite-lived intangible and long-lived assets, and the depreciation and amortization of long-lived assets, as well as accounting for business combinations. Fiscal year The Company’s fiscal year ends on the Saturday nearest to January 31st. Fiscal 2021 and Fiscal 2020 refer to the 52 week periods ending January 30, 2021 and February 1, 2020, respectively. Within these condensed consolidated financial statements, the first quarter of the relevant fiscal years 2021 and 2020 refer to the 13 weeks ended May 2, 2020 and May 4, 2019, respectively. Foreign currency translation The financial position and operating results of certain foreign operations, including certain subsidiaries operating in the UK as part of the International segment and Canada as part of the North America segment, are consolidated using the local currency as the functional currency. Assets and liabilities are translated at the rates of exchange on the balance sheet date, and revenues and expenses are translated at the monthly average rates of exchange during the period. Resulting translation gains or losses are included in the accompanying condensed consolidated statements of shareholders’ equity as a component of accumulated other comprehensive income (loss) (“AOCI”). Gains or losses resulting from foreign currency transactions are included in other operating income, net within the condensed consolidated statements of operations. See Note 9 for additional information regarding the Company’s foreign currency translation.
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New accounting pronouncements |
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May 02, 2020 | ||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||
New accounting pronouncements | New accounting pronouncements The following section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company. New accounting pronouncements recently adopted The following ASU’s were adopted as of February 2, 2020. The impact on the Company's consolidated financial statements is described within the table below.
New accounting pronouncements issued but not yet adopted There are no new accounting pronouncements issued that are expected to be applicable to the Company in future periods.
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Revenue recognition |
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Revenue recognition | Revenue recognition The following tables provide the Company’s revenue, disaggregated by banner, major product and channel, for the 13 weeks ended May 2, 2020 and May 4, 2019:
The Company recognizes revenues when control of the promised goods and services are transferred to customers, in an amount that reflects the consideration expected to be received in exchange for those goods. Transfer of control generally occurs at the time merchandise is taken from a store, or upon receipt of the merchandise by a customer for an e-commerce shipment. The Company excludes all taxes assessed by government authorities and collected from a customer from its reported sales. The Company’s revenue streams and their respective accounting treatments are further discussed below. Merchandise sales and repairs Store sales are recognized when the customer receives and pays for the merchandise at the store with cash, in-house customer finance, private label credit card programs, a third-party credit card or a lease purchase option. For online sales shipped to customers, sales are recognized at the estimated time the customer has received the merchandise. Amounts related to shipping and handling that are billed to customers are reflected in sales and the related costs are reflected in cost of sales. Revenues on the sale of merchandise are reported net of anticipated returns and sales tax collected. Returns are estimated based on previous return rates experienced. Any deposits received from a customer for merchandise are deferred and recognized as revenue when the customer receives the merchandise. Revenues derived from providing replacement merchandise on behalf of insurance organizations are recognized upon receipt of the merchandise by the customer. Revenues on repair of merchandise are recognized when the service is complete and the customer collects the merchandise at the store. Extended service plans and lifetime warranty agreements (“ESP”) The Company recognizes revenue related to ESP sales in proportion to when the expected costs will be incurred. The deferral period for ESP sales is determined from patterns of claims costs, including estimates of future claims costs expected to be incurred. Management reviews the trends in claims to assess whether changes are required to the revenue and cost recognition rates utilized. A significant change in estimates related to the time period or pattern in which warranty-related costs are expected to be incurred could materially impact revenues. All direct costs associated with the sale of these plans are deferred and amortized in proportion to the revenue recognized and disclosed as either other current assets or other assets in the condensed consolidated balance sheets. These direct costs primarily include sales commissions and credit card fees. Amortization of deferred ESP selling costs is included within selling, general and administrative expenses in the consolidated statements of operations. Amortization of deferred ESP selling costs were $4.3 million and $7.5 million during the first quarter of Fiscal 2021 and Fiscal 2020, respectively. Unamortized deferred selling costs as of May 2, 2020, February 1, 2020 and May 4, 2019 were as follows:
The North America segment sells ESP, subject to certain conditions, to perform repair work over the life of the product. Customers generally pay for ESP at the store at the time of merchandise sale. Revenue from the sale of the lifetime ESP is recognized consistent with the estimated pattern of claim costs expected to be incurred by the Company in connection with performing under the ESP obligations. Lifetime ESP revenue is deferred and recognized over a maximum of 17 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 55% of revenue is recognized within the first two years on a weighted average basis. The North America segment also sells a Jewelry Replacement Plan (“JRP”). The JRP is designed to protect customers from damage or defects of purchased merchandise for a period of three years. If the purchased merchandise is defective or becomes damaged under normal use in that time period, the item will be replaced. JRP revenue is deferred and recognized on a straight-line basis over the period of expected claims costs. Signet also sells warranty agreements in the capacity of an agent on behalf of a third-party. The commission that Signet receives from the third-party is recognized at the time of sale less an estimate of cancellations based on historical experience. Sale vouchers Certain promotional offers award sale vouchers to customers who make purchases above a certain value, which grant a fixed discount on a future purchase within a stated time frame. The Company accounts for such vouchers by allocating the fair value of the voucher between the initial purchase and the future purchase using the relative-selling-price method. Sale vouchers are not sold on a stand-alone basis. The fair value of the voucher is determined based on the average sales transactions in which the vouchers were issued, when the vouchers are expected to be redeemed and the estimated voucher redemption rate. The fair value allocated to the future purchase is recorded as deferred revenue. Consignment inventory sales Sales of consignment inventory are accounted for on a gross sales basis as the Company maintains control of the merchandise through the point of sale as well as provides independent advice, guidance and after-sales service to customers. The products sold from consignment inventory are indistinguishable from other products that are sold to customers and are sold on the same terms. Supplier products are selected at the discretion of the Company. The Company is responsible for determining the selling price and physical security of the products. Deferred revenue Deferred revenue is comprised primarily of ESP and voucher promotions as follows:
(2) During the first quarter of Fiscal 2021, the Company recognized sales of $44.5 related to deferred revenue that existed at February 1, 2020 in respect to ESP. Additionally, no ESP revenue was recognized beginning on March 23, 2020 and through the end of the quarter due to the temporary closure of the Company’s stores and service centers as a result of COVID-19.
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Segment information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment information | Segment information Financial information for each of Signet’s reportable segments is presented in the tables below. Signet’s chief operating decision maker utilizes segment sales and operating income, after the elimination of any inter-segment transactions, to determine resource allocations and performance assessment measures. Signet manages its business as three reportable segments: North America, International, 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), Zales (Zales Jewelers and Zales Outlet), Jared (Jared The Galleria Of Jewelry and Jared Vault), James Allen and Piercing Pagoda, which operates through mall-based kiosks. Its Canadian stores operate as the Peoples Jewellers store banner. The segment also operates a variety of mall-based regional banners. 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 (i.e. high street) principally as H.Samuel and Ernest Jones. The Other reportable segment consists of subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones and unallocated corporate administrative functions.
(3) Operating income (loss) during the 13 weeks ended May 2, 2020 includes a charge of $8.5 million related to a proposed settlement of previously disclosed shareholder litigation matters. See Note 21 for additional information. Additionally, operating income (loss) during the 13 weeks ended May 2, 2020 and May 4, 2019 includes charges of $0.2 million and $27.3 million, respectively, primarily related to severance and professional services recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information.
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Restructuring Plans |
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Restructuring Plans | Restructuring Plans Signet Path to Brilliance Plan During the first quarter of Fiscal 2019, Signet launched a three-year comprehensive transformation plan, the “Signet Path to Brilliance” plan (the “Plan”), to reposition the Company to be a share-gaining, OmniChannel jewelry category leader. The Plan was originally expected to result in pre-tax charges in the range of $200 million - $220 million over the duration of the plan of which $105 million - $115 million were expected to be cash charges. The Company is currently evaluating its initiatives under the Plan and is unable to estimate its future costs in light of COVID-19, as further described in Note 1. Restructuring charges and other Plan related costs of $12.3 million were recognized in the 13 weeks ended May 2, 2020, primarily related to store closure costs (including non-cash accelerated depreciation on property and equipment), severance costs and professional fees for legal and consulting services. Restructuring charges and other Plan related costs are classified in the condensed consolidated statements of operations as follows:
The composition of the restructuring charges the Company incurred during the 13 weeks ended May 2, 2020, as well as the cumulative amount incurred under the Plan through May 2, 2020, were as follows:
The following table summarizes the activity related to the Plan liabilities for Fiscal 2021:
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Redeemable preferred shares |
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Temporary Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable preferred shares | Redeemable preferred shares On October 5, 2016, the Company issued 625,000 shares of Series A Convertible Preference Shares (“Preferred Shares”) to certain affiliates of Leonard Green & Partners, L.P., for an aggregate purchase price of $625.0 million, or $1,000 per share (the “Stated Value”) pursuant to the investment agreement dated August 24, 2016. Preferred shareholders are entitled to a cumulative dividend at the rate of 5% per annum, payable quarterly in arrears either in cash or by increasing the stated value of the preferred shares. The Company declared the preferred share dividend during the first quarter of Fiscal 2021 payable “in-kind” by increasing the stated value of the preferred shares. The stated value of the preferred shares will increase by $12.50 per share during the second quarter of Fiscal 2021, and will become payable upon liquidation of the Preferred Shares. Refer to Note 7 for additional discussion of the Company’s dividends on Preferred Shares.
In connection with the issuance of the preferred shares, the Company incurred direct and incremental expenses of $13.7 million. These direct and incremental expenses originally reduced the preferred shares carrying value and will be accreted through retained earnings as a deemed dividend from the date of issuance through the first possible known redemption date in November 2024. Accumulated accretion recorded in the condensed consolidated balance sheets was $6.1 million as of May 2, 2020 (February 1, 2020 and May 4, 2019: $5.7 million and $4.4 million, respectively). Accretion of $0.4 million was recorded to preferred shares in the condensed consolidated balance sheets during the 13 weeks ended May 2, 2020 ($0.4 million for the 13 weeks ended May 4, 2019).
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Shareholders' equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity | Shareholders’ equity As a result of COVID-19, Signet’s Board of Directors has elected to temporarily suspend the dividend program on common shares and has elected to pay the quarterly dividend declared on its preferred shares “in-kind” for the first quarter of Fiscal 2021. Dividends on common shares Dividends declared on common shares during the 13 weeks ended May 2, 2020 and May 4, 2019 were as follows:
Dividends on preferred shares Dividends declared on preferred shares during the 13 weeks ended May 2, 2020 and May 4, 2019 were as follows:
There were no cumulative undeclared dividends on the preferred shares that reduced net income (loss) attributable to common shareholders during the 13 weeks ended May 2, 2020 or May 4, 2019. See Note 6 for additional discussion of the Company’s preferred shares. Share repurchases There were no share repurchases executed during the 13 weeks ended May 2, 2020 and May 4, 2019. The 2017 Program had $165.6 million remaining as of May 2, 2020.
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Earnings (loss) per common share (EPS) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) per common share (“EPS”) | Earnings (loss) per common share (“EPS”) Basic EPS is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period. The computation of basic EPS is outlined in the table below:
The dilutive effect of share awards represents the potential impact of outstanding awards issued under the Company’s share-based compensation plans, including restricted shares, restricted stock units and stock options issued under the Omnibus Plan and stock options issued under the Share Saving Plans. The dilutive effect of preferred shares represents the potential impact for common shares that would be issued upon conversion. Potential common share dilution related to share awards and preferred shares is determined using the treasury stock and if-converted methods, respectively. Under the if-converted method, the preferred shares are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted EPS calculation for the entire period being presented, only in the periods in which such effect is dilutive. Additionally, in periods in which preferred shares are dilutive, cumulative dividends and accretion for issuance costs associated with the preferred shares are added back to net income (loss) attributable to common shareholders. See Note 6 for additional discussion of the Company’s preferred shares. The computation of diluted EPS is outlined in the table below:
The calculation of diluted EPS excludes the following items for each respective period on the basis that their effect would be anti-dilutive.
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Accumulated other comprehensive income (loss) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss) The following tables present the changes in AOCI by component and the reclassifications out of AOCI, net of tax:
The amounts reclassified from AOCI were as follows:
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Income taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Income taxes | Income taxes
During the 13 weeks ended May 2, 2020, the Company’s effective tax rate was higher than the US federal income tax rate primarily due to the anticipated benefit from the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted on March 27, 2020, recognized as a discrete item in the first quarter of Fiscal 2021, partially offset by the unfavorable impact of a valuation allowance recorded against certain US and state deferred tax assets and the impairment of goodwill which was not deductible for tax purposes. The Company’s effective tax rate for the same period during the prior year was lower than the US federal income tax rate primarily due to the favorable impact of foreign tax rate differences and benefits from global reinsurance arrangements. The CARES Act provides a technical correction to the Tax Cuts and Jobs Act (TCJA) allowing fiscal year tax filers with federal net operating losses arising in the 2017/2018 tax year to be carried back two years to tax years that had higher enacted tax rates resulting in a tax benefit of $67.5 million. The CARES Act also provides for net operating losses incurred in Fiscal 2021 to be carried back five years to tax years with higher enacted tax rates resulting in an anticipated tax benefit of $48.5 million. In addition, during the first quarter of Fiscal 2021, based on weighing all positive and negative evidence, management determined it was more likely than not that it would not be able to realize certain US and state deferred tax assets primarily related to state deferred tax assets including state net operating losses and recorded a valuation allowance of $56.7 million. The estimated annual effective tax rate excludes the effects of any discrete items that may be recognized in future periods. As of May 2, 2020, there has been no material change in the amounts of unrecognized tax benefits, or the related accrued interest and penalties (where appropriate), in respect of uncertain tax positions identified and recorded as of February 1, 2020.
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Accounts receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | Accounts receivable The following table presents the components of Signet’s accounts receivable:
As previously disclosed, during Fiscal 2018, Signet announced a strategic initiative to outsource its North America private label credit card programs and sell the existing in-house finance receivables. In October 2017, Signet, through its subsidiary Sterling Jewelers Inc. (“Sterling”), completed the sale of the prime-only credit quality portion of Sterling’s in-house finance receivable portfolio to Comenity Bank (“Comenity”). In June 2018, the Company completed the sale of the non-prime in-house accounts receivable to CarVal Investors (“CarVal”) and the appointed minority party, Castlelake, L.P. (“Castlelake”). In addition, for a five-year term, Signet would remain the issuer of non-prime credit with investment funds managed by CarVal and Castlelake purchasing forward receivables at a discount rate determined in accordance with their respective agreements. Signet would hold the newly issued non-prime credit receivables on its balance sheet for two business days prior to selling the receivables to the respective counterparty in accordance with the agreements. Receivables issued by the Company but pending transfer to CarVal and Castlelake as of period end were classified as “held for sale” and included in the accounts receivable caption in the condensed consolidated balance sheets. As of May 2, 2020, February 1, 2020, and May 4, 2019, the accounts receivable held for sale were recorded at fair value. In conjunction with the sale of the majority of Signet’s non-prime in-house accounts receivable to CarVal and Castlelake (collectively, the “Investors”), beginning in June 2018, the Investors began purchasing the majority of forward flow receivables of Signet’s non-prime credit from Signet for a five-year term. In Fiscal 2020, those forward flow receivables represented approximately 7% of Signet’s revenue. During Fiscal 2021, the 2018 agreements pertaining to the purchase of forward flow receivables were terminated and new agreements were executed with both Investors which will remain effective until June 2021, unless terminated earlier by either party pursuant to the terms of respective agreements. The new agreements provide that the Investors will continue to purchase add-on receivables created on existing customer accounts at a discount rate determined in accordance with the new agreements. Signet will retain forward flow non-prime receivables created for new customers, which are expected to represent less than 2.5% of Signet’s Fiscal 2021 revenue. The termination of the previous agreements has no effect on the receivables that were previously sold to the Investors prior to the termination, except that Signet agreed to extend the Investors’ payment obligation for the remaining 5% of the receivables previously purchased in June 2018 until the new agreements terminate. The Company’s agreement with the credit servicer Genesis Financial Solutions remains in place. Receivables issued by the Company but pending transfer to its credit partners as of period end are classified as held for sale. Accounts receivable classified as held for investment is comprised primarily of accounts receivable related to the sale of diamonds to third parties from its polishing factory deemed unsuitable for Signet's needs in the Other segment.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The following table summarizes the Company’s inventory by classification:
As of May 2, 2020, inventory reserves were $55.5 million (February 1, 2020 and May 4, 2019: $67.0 million and $84.7 million, respectively).
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Asset Impairment |
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Asset Impairment Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Impairment | Asset Impairment The following table summarizes the Company's asset impairment activity for the periods presented:
Long-lived assets of the Company consist primarily of property, plant and equipment, definite lived intangible assets and operating lease right-of-use (ROU) assets. Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Potentially impaired assets or asset groups are identified by reviewing the undiscounted cash flows of individual stores. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the store asset group, based on the Company’s internal business plans. If the undiscounted cash flow for the store asset group is less than its carrying amount, the long lived assets are measured for potential impairment by estimating the fair value of the assets in the group, and recording an impairment loss for the amount that the carrying value exceeds the estimated fair value. The Company utilizes primarily 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. Due to the various impacts of COVID-19 to the Company’s business during the 13 weeks ended May 2, 2020, including the temporary closure of all the Company’s stores beginning in late March 2020 (see additional information in Note 1), the Company determined a triggering event had occurred for certain of the Company’s long-lived asset groups at the individual stores that required an interim impairment assessment during the first quarter of Fiscal 2021. This impacted both property, plant and equipment and ROU assets at the store level. The Company identified certain stores in the initial recoverability test which had carrying values in excess of the estimated undiscounted cash flows. For these stores failing the recoverability test, a fair value assessment for these long-lived assets was performed, and as a result of the estimated fair values, the Company recorded an impairment charge for property, plant and equipment of $13.8 million and ROU assets of $28.5 million for the 13 weeks ended May 2, 2020. The uncertainty of the COVID-19 impact to the Company’s business could continue to further negatively affect the operating performance and cash flows of the above identified stores or additional stores, including a slower than anticipated re-opening of the stores, lower than anticipated consumer traffic, changes in the Company’s real estate strategy under the Path-to-Brilliance plan (see Note 5), or the inability to achieve cost savings initiatives included in the business plans. In addition, key assumptions used to estimate fair value, such as sales trends, market capitalization and rental rates, and discount rates could impact the fair value estimates of the store assets in future periods.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Signet occupies certain properties and holds machinery and vehicles under operating leases. Signet determines if an arrangement is a lease at the agreement’s inception. Certain operating leases include predetermined rent increases, which are charged to store occupancy costs within cost of sales on a straight-line basis over the lease term, including any construction period or other rental holiday. Other variable amounts paid under operating leases, such as taxes and common area maintenance, are charged to selling, general and administrative expenses as incurred. Premiums paid to acquire short-term leasehold properties and inducements to enter into a lease are recognized on a straight-line basis over the lease term. In addition, certain leases provide for contingent rent based on a percentage of sales in excess of a predetermined level. Further, certain leases provide for variable rent increases based on indexes specified within the lease agreement. As the contingent rent and variable increases are not measurable at inception, the amounts are excluded from minimum rent and the calculation of the operating lease liability. These amounts are included in variable lease cost and included in the determination of total lease cost when it is probable that the expense has been incurred and the amount is reasonably estimable. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and non-current operating lease liabilities in the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate available at the lease commencement date, based primarily on the underlying lease term, in measuring the present value of lease payments. Lease terms, which include the period of the lease that cannot be canceled, may also include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The operating lease ROU asset may also include initial direct costs, prepaid and/or accrued lease payments and the unamortized balance of lease incentives received. ROU assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with the Company’s long-lived asset impairment assessment policy. Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities on the Company’s consolidated statement of cash flows. Operating lease payments representing costs to ready an asset for its intended use (i.e. leasehold improvements) are represented within investing activities within the Company’s consolidated statements of cash flows. The Company deferred substantially all rent payments due in the months of April and May 2020. The Company has not recorded any provision for interest or penalties which may arise as a result of these deferrals, as management does not believe payment for any potential amounts to be probable. In April 2020, the FASB granted guidance (hereinafter, the practical expedient) permitting an entity to choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract, specifically in situations where rent concessions have been agreed to with landlords as a result of COVID-19. Instead, the entity may account for COVID-19 related rent concessions, whatever their form (e.g. rent deferral, abatement or other) either: a) as if they were part of the enforceable rights and obligations of the parties under the existing lease contract; or b) as lease modifications. In accordance with this practical expedient, the Company has elected not to account for any concessions granted by landlords as a result of COVID-19 as lease modifications. Rent abatements under the practical expedient would be recorded as a negative variable lease cost. The Company is currently negotiating with nearly all of its landlords, and to date, has received certain concessions in the form of rent deferrals and other lease or rent modifications. In addition, the Company has continued recording lease expense during the deferral period in accordance with its existing policies. The weighted average lease term and discount rate for the Company’s outstanding operating leases were as follows:
Total lease costs are as follows:
Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities on the Company’s condensed consolidated statement of cash flows. Payments representing costs to ready a ROU asset for its intended use are represented within investing activities within the Company’s condensed consolidated statements of cash flows. Supplemental cash flow information related to leases was as follows:
The future minimum operating lease payments for operating leases having initial or non-cancelable terms in excess of one year are as follows:
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Goodwill and intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and intangibles | Goodwill and intangibles Goodwill and other indefinite-lived intangible assets, such as indefinite-lived trade names, are evaluated for impairment annually. 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 asset for impairment at that time. Impairment testing compares the carrying amount of the reporting unit or other intangible assets with its fair value. When the carrying amount of the reporting unit or other intangible assets exceeds its fair value, an impairment charge is recorded. Due to various impacts of COVID-19 to the Company’s business during the 13 weeks ended May 2, 2020, the Company determined a triggering event had occurred that required an interim impairment assessment for all of its reporting units and indefinite-lived intangible assets. The income approach was used to estimate the fair value of each reporting unit, whereby the Company calculates the fair value based on the present value of estimated future cash flows, using a discount rate aligned with market-based assumptions. The relief-from-royalty method was used to estimate the fair value of indefinite-lived intangible assets. As part of the assessment, it was determined that an increase in the discount rates were required to reflect the prevailing uncertainty inherent in the forecasts due to current market conditions and potential COVID-19 impacts. This higher discount rate, in conjunction with revised long-term projections associated with certain aspects of the Company’s forecast, resulted in lower than previously projected long-term future cash flows for the reporting units and indefinite-lived intangible assets which negatively affected the valuation compared to previous valuations. As a result of the interim impairment assessment, the Company recognized pre-tax impairment charges for goodwill and indefinite-lived intangible assets totaling $94 million in the 13 weeks ended May 2, 2020. Goodwill During the 13 weeks ended August 3, 2019, a non-cash immaterial out-of-period adjustment of $47.7 million, with $35.2 million related to Zales goodwill and $12.5 million related to R2Net goodwill, was recognized within Goodwill and intangible impairments on the condensed consolidated statements of operations related to an error in the calculation of goodwill impairments during Fiscal 2019. During the 13 weeks ended May 2, 2020, the Company recognized pre-tax impairment charges within asset impairments on the condensed consolidated statements of operations of $10.7 million within its North America segment related to R2Net and Zales Canada goodwill. The following table summarizes the Company’s goodwill by reportable segment:
Intangibles Definite-lived intangible assets include trade names and favorable lease agreements. All indefinite-lived intangible assets consist of trade names. Both definite and indefinite-lived assets are recorded within intangible assets, net, on the condensed consolidated balance sheets. Intangible liabilities, net, is comprised of unfavorable lease agreements and contracts and is recorded within other liabilities on the condensed consolidated balance sheets. The following table provides additional detail regarding the composition of intangible assets and liabilities:
The interim impairment test resulted in the determination that the fair values of indefinite-lived intangible assets related to certain Zales trade names were less than their carrying value. Accordingly, in the 13 weeks ended May 2, 2020, the Company recognized pre-tax impairment charges within asset impairments on the condensed consolidated statements of operations of $83.3 million within its North America segment. The uncertainty of the COVID-19 impact could continue to further negatively affect the share price of the Company’s stock, as well as key assumptions used to estimate fair value, such as sales trends, margin trends, long term growth and discount rates. In addition, as a result of the impairment of goodwill and trade names during the first quarter of Fiscal 2021, the Company’s goodwill and trade names within the North America segment approximate their respective fair values and could be at risk for additional impairments should there be an adverse business or economic change in future periods.
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Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives Derivative transactions are used by Signet for risk management purposes to address risks inherent in Signet’s business operations and sources of financing. The main risks arising from Signet’s operations are market risk including foreign currency risk, commodity risk, liquidity risk and interest rate risk. Signet uses derivative financial instruments to manage and mitigate certain of these risks under policies reviewed and approved by the Board of Directors. Signet does not enter into derivative transactions for speculative purposes. Market risk Signet generates revenues and incurs expenses in US dollars, Canadian dollars and British pounds. As a portion of the International segment purchases and purchases made by the Canadian operations of the North America segment are denominated in US dollars, Signet enters into forward foreign currency exchange contracts and foreign currency swaps to manage this exposure to the US dollar. Signet holds a fluctuating amount of British pounds and Canadian dollars reflecting the cash generative characteristics of operations. Signet’s objective is to minimize net foreign exchange exposure to the condensed consolidated statement of operations on non-US dollar denominated items through managing cash levels, non-US dollar denominated intra-entity balances and foreign currency swaps. In order to manage the foreign exchange exposure and minimize the level of funds denominated in British pounds and Canadian dollars, dividends are paid regularly by subsidiaries to their immediate holding companies and excess British pounds and Canadian dollars are sold in exchange for US dollars. Signet’s policy is to reduce the impact of precious metal commodity price volatility on operating results through the use of outright forward purchases of, or by entering into options to purchase, precious metals within treasury guidelines approved by the Board of Directors. In particular, Signet undertakes some hedging of its requirements for gold through the use of forward purchase contracts, options and net zero premium collar arrangements (a combination of forwards and option contracts). Liquidity risk Signet’s objective is to ensure that it has access to, or the ability to generate, sufficient cash from either internal or external sources in a timely and cost-effective manner to meet its commitments as they become due and payable. Signet manages liquidity risks as part of its overall risk management policy. Management produces forecasting and budgeting information that is reviewed and monitored by the Board of Directors. Cash generated from operations and external financing are the main sources of funding, which supplement Signet’s resources in meeting liquidity requirements. The primary external sources of funding are an asset-based credit facility and senior unsecured notes as described in Note 18. Interest rate risk Signet has exposure to movements in interest rates associated with cash and borrowings. Signet may enter into various interest rate protection agreements in order to limit the impact of movements in interest rates. Interest rate swap (designated) — The Company entered into an interest rate swap in March 2015 with an aggregate notional amount of $300.0 million that matured in April 2019. Under this contract, the Company agreed to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional amounts. This contract was entered into to reduce the consolidated interest rate risk associated with variable rate, long-term debt. The Company designated this derivative as a cash flow hedge of the variability in expected cash outflows for interest payments. During the term of the interest rate swap, the Company effectively converted a portion of its variable-rate senior unsecured term loan into fixed-rate debt. Credit risk and concentrations of credit risk Credit risk represents the loss that would be recognized at the reporting date if counterparties failed to perform as contracted. Signet does not anticipate non-performance by counterparties of its financial instruments. Signet does not require collateral or other security to support cash investments or financial instruments with credit risk; however, it is Signet’s policy to only hold cash and cash equivalent investments and to transact financial instruments with financial institutions with a certain minimum credit rating. As of May 2, 2020, management does not believe Signet is exposed to any significant concentrations of credit risk that arise from cash and cash equivalent investments, derivatives or accounts receivable. Commodity and foreign currency risks The following types of derivative financial instruments are utilized by Signet to mitigate certain risk exposures related to changes in commodity prices and foreign exchange rates: Forward foreign currency exchange contracts (designated) — These contracts, which are principally in US dollars, are entered into to limit the impact of movements in foreign exchange rates on forecasted foreign currency purchases. These contracts have been de-designated during the 13 weeks ended May 2, 2020. This de-designation occurred due to uncertainly around the volume of purchases in the Company’s UK business. These contracts were unlikely to retain hedge effectiveness given the change in circumstances. Therefore, the total notional amount of these foreign currency contracts outstanding as of May 2, 2020 was $0.0 million (February 1, 2020 and May 4, 2019: $23.0 million and $20.6 million, respectively). Forward foreign currency exchange contracts (undesignated) — Foreign currency contracts not designated as cash flow hedges are used to limit the impact of movements in foreign exchange rates on recognized foreign currency payables and to hedge currency flows through Signet’s bank accounts to mitigate Signet’s exposure to foreign currency exchange risk in its cash and borrowings. The total notional amount of these foreign currency contracts outstanding as of May 2, 2020 was $177.6 million (February 1, 2020 and May 4, 2019: $224.2 million and $92.4 million, respectively). The outstanding amount as of May 2, 2020 includes certain contracts which were previously designated, as well as a forward contract entered into to hedge the portion of the insurance proceeds expected to be received in British Pounds associated with the shareholder litigation, which has a notional amount of £95 million (see Note 21 for further information). Commodity forward purchase contracts and net zero-cost collar arrangements (designated) — These contracts are entered into to reduce Signet’s exposure to significant movements in the price of the underlying precious metal raw materials. During the 13 weeks ended May 2, 2020, the contracts which were still outstanding (and unrealized) were de-designated and liquidated. The contracts which were already settled remain designated as the hedged inventory purchases from these contracts are still on hand. However, the Company has frozen the release of these gains from AOCI to cost of goods sold until such time that the inventory is sold. The unrealized contracts were de-designated as a result of uncertainty around the Company’s future purchasing volume due to COVID-19 and thus the contracts were unlikely to retain hedge effectiveness. The total notional amount of these commodity derivative contracts outstanding as of May 2, 2020 was 0 ounces of gold (February 1, 2020 and May 4, 2019: 63,000 ounces and 92,000 ounces, respectively). The bank counterparties to the derivative instruments expose Signet to credit-related losses in the event of their non-performance. However, to mitigate that risk, Signet only contracts with counterparties that meet certain minimum requirements under its counterparty risk assessment process. As of May 2, 2020, Signet believes that this credit risk did not materially change the fair value of the foreign currency or commodity contracts. The following table summarizes the fair value and presentation of derivative instruments in the condensed consolidated balance sheets:
Derivatives designated as cash flow hedges The following table summarizes the pre-tax gains (losses) recorded in AOCI for derivatives designated in cash flow hedging relationships:
The following tables summarize the effect of derivative instruments designated as cash flow hedges in OCI and the condensed consolidated statement of operations: Foreign currency contracts
Commodity contracts
Interest rate swaps
Total amounts presented in the condensed consolidated statements of operations
Derivatives not designated as hedging instruments The following table presents the effects of the Company’s derivatives instruments not designated as cash flow hedges in the condensed consolidated statement of operations:
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Fair value measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurement | Fair value measurement The estimated fair value of Signet’s financial instruments held or issued to finance Signet’s operations is summarized below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that Signet would realize upon disposition nor do they indicate Signet’s intent or ability to dispose of the financial instrument. Assets and liabilities that are carried at fair value are required to be classified and disclosed in one of the following three categories: Level 1—quoted market prices in active markets for identical assets and liabilities Level 2—observable market based inputs or unobservable inputs that are corroborated by market data Level 3—unobservable inputs that are not corroborated by market data Signet determines fair value based upon quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The methods Signet uses to determine fair value on an instrument-specific basis are detailed below:
Investments in US Treasury securities and corporate equity securities are based on quoted market prices for identical instruments in active markets, and therefore were classified as Level 1 measurements in the fair value hierarchy. Investments in US government agency securities and corporate bonds and notes are based on quoted prices for similar instruments in active markets, and therefore were classified as Level 2 measurements in the fair value hierarchy. The fair value of derivative financial instruments has been determined based on market value equivalents at the balance sheet date, taking into account the current interest rate environment, foreign currency forward rates or commodity forward rates, and therefore were classified as Level 2 measurements in the fair value hierarchy. See Note 16 for additional information related to the Company’s derivatives. During the second quarter of Fiscal 2019, the Company completed the sale of all eligible non-prime in-house accounts receivable. Upon closing, 5% of the purchase price was deferred until the second anniversary of the closing date. Final payment of the deferred purchase price is contingent upon the non-prime portfolio achieving a pre-defined yield. The Company recorded an asset related to this deferred payment within other assets at fair value. This estimated fair value was derived from a discounted cash flow model using unobservable Level 3 inputs, including estimated yields derived from historic performance, loss rates, payment rates and discount rates to estimate the fair value associated with the accounts receivable. The Company will adjust the asset to fair value through AOCI in each subsequent period through the performance period until settled. As of May 2, 2020, the fair value of the deferred payment was $22.8 million, which is recorded within other assets on the condensed consolidated balance sheets. See Note 11 for additional information. Goodwill and other indefinite-lived intangible assets, are evaluated for impairment annually or more frequently 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. Long-lived asset impairment testing is performed if events occur which indicate the carrying value of the long-lived asset or asset group may be greater than its fair value, and when the undiscounted cash flows of the asset or asset group are below its carrying value. During the 13 weeks ended May 2, 2020, the Company performed an interim impairment test for goodwill, indefinite-lived intangible assets and long-lived assets. The fair value was calculated using the income approach for the reporting units and the relief from royalty method for the indefinite-lived intangible assets, respectively. The fair value is a Level 3 valuation based on certain unobservable inputs including estimated future cash flows and discount rates aligned with market-based assumptions, that would be utilized by market participants in valuing these assets or prices of similar assets. For long-lived assets, the Company utilizes primarily the replacement cost method for the fair value of its property and equipment, and the income method to estimate the fair value of its ROU assets, which incorporates Level 3 inputs such as historical store level sales, internal business plans, real estate market capitalization and rental rates, and discount rates. See Notes 13 and Note 15 for additional information. The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued expenses and other current liabilities, and income taxes approximate fair value because of the short-term maturity of these amounts. The fair values of long-term debt instruments, excluding revolving credit facilities, were determined using quoted market prices in inactive markets or discounted cash flows based upon current observable market interest rates and therefore were classified as Level 2 measurements in the fair value hierarchy. The carrying value of the ABL Revolving Facility (as defined in Note 18) approximates fair value. The following table provides a summary of the carrying amount and fair value of outstanding debt:
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Loans, overdrafts and long-term debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, overdrafts and long-term debt | Loans, overdrafts and long-term debt
Revolving credit facility and senior unsecured term loan (the “Credit Facility”) On September 27, 2019, in connection with the issuance of a new senior secured asset-based credit facility, the Company repaid and terminated the Credit Facility. Refer to the “Asset-based credit facility” section below. The original maturity of the Credit Facility was July 2021. Senior unsecured notes due 2024 On May 19, 2014, Signet UK Finance plc (“Signet UK Finance”), a wholly owned subsidiary of the Company, issued $400 million aggregate principal amount of its 4.70% senior unsecured notes due in 2024 (the “Senior Notes”). The Senior Notes were issued under an effective registration statement previously filed with the SEC. The Senior Notes are jointly and severally guaranteed, on a full and unconditional basis, by the Company and by certain of the Company’s wholly owned subsidiaries (such subsidiaries, the “Guarantors”). See Supplemental Guarantor Financial Information within Item 2 of this Form 10-Q for additional information. On September 5, 2019, Signet UK Finance announced the commencement of a tender offer to purchase any and all of its outstanding Senior Notes (the “Tender Offer”). Upon receipt of the requisite consents from Senior Note holders, Signet UK Finance entered into a supplemental indenture which eliminated most of the restrictive covenants and certain default provisions of the indenture. The supplemental indenture became operative on September 27, 2019 upon the Company’s acceptance and payment for the Senior Notes previously validly tendered and not validly withdrawn pursuant to the Tender Offer for an aggregate principal amount of $239.6 million, which represented a purchase price of $950.00 per $1,000.00 in principal amount of the Senior Notes validly tendered. Unamortized debt issuance costs relating to the Senior Notes as of May 2, 2020 was $1.0 million (February 1, 2020 and May 4, 2019: $1.1 million and $3.6 million, respectively). The unamortized debt issuance costs are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to debt issuance costs of $0.1 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 weeks ended May 2, 2020 ($0.1 million for the 13 weeks ended May 4, 2019). Asset-based credit facility On September 27, 2019, the Company entered into a senior secured asset-based credit facility consisting of (i) a revolving credit facility in an aggregate committed amount of $1.5 billion (“ABL Revolving Facility”) and (ii) a first-in last-out term loan facility in an aggregate principal amount of $100.0 million (the “FILO Term Loan Facility” and, together with the ABL Revolving Facility, the “ABL Facility”) pursuant to that certain credit agreement. The ABL Facility will mature on September 27, 2024. Revolving loans under the ABL Revolving Facility are available in an aggregate amount equal to the lesser of the aggregate ABL revolving commitments and a borrowing base determined based on the value of certain inventory and credit card receivables, subject to specified advance rates and reserves. Indebtedness under the ABL Facility is secured by substantially all of the assets of the Company and its subsidiaries, subject to customary exceptions. Borrowings under the ABL Revolving Facility and the FILO Term Loan Facility, as applicable, bear interest at the Company’s option at either eurocurrency rate plus the applicable margin or a base rate plus the applicable margin, in each case depending on the excess availability under the ABL Revolving Facility. The Company had stand-by letters of credit outstanding of $14.9 million on the ABL Revolving Facility as of May 2, 2020. The Company had available borrowing capacity of $237.2 million on the ABL Revolving Facility as of May 2, 2020. 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. As of May 2, 2020, the threshold related to the fixed coverage ratio was approximately $136 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. The ABL Facility contains customary events of default (including payment defaults, cross-defaults to certain of the Company’s other indebtedness, breach of representations and covenants and change of control). The occurrence of an event of default under the ABL Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Facility. Debt issuance costs relating to the ABL Facility totaled $9.3 million, of which $8.7 million of these costs were allocated to the ABL Revolving Facility and $0.6 million was allocated to the FILO Term Loan Facility. The remaining unamortized debt issuance costs for the ABL Revolving Facility are recorded within other assets in the condensed consolidated balance sheets and the remaining unamortized debt issuance costs for the FILO Term Loan Facility are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to the ABL Facility debt issuance costs of $0.5 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 weeks ended May 2, 2020. Unamortized debt issuance costs related to the ABL facility totaled $8.2 million as of May 2, 2020 (February 1, 2020: $8.7 million). Other As of May 2, 2020, February 1, 2020 and May 4, 2019, the Company was in compliance with all debt covenants.
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Warranty reserve |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty reserve | Warranty reserve Specific merchandise sold by banners within the North America segment includes a product lifetime diamond or colored gemstone guarantee as long as six-month inspections are performed and certified by an authorized store representative. Provided the customer has complied with the six-month inspection policy, the Company will replace, at no cost to the customer, any stone that chips, breaks or is lost from its original setting during normal wear. Management estimates the warranty accrual based on the lag of actual claims experience and the costs of such claims, inclusive of labor and material. The warranty reserve for diamond and gemstone guarantee, included in accrued expenses and other current liabilities and other non-current liabilities, is as follows:
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Share-based compensation |
3 Months Ended |
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May 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based compensation | Share-based compensation Signet recorded share-based compensation expense of $1.4 million for the 13 weeks ended May 2, 2020 related to the Omnibus Plan and Share Saving Plans ($4.0 million for the 13 weeks ended May 4, 2019).
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Commitments and contingencies |
3 Months Ended |
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May 02, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Legal proceedings Employment practices As previously reported, in March 2008, a group of private plaintiffs (the “Claimants”) filed a class action lawsuit for an unspecified amount against SJI, a subsidiary of Signet, in the US District Court for the Southern District of New York alleging that US store-level employment practices are discriminatory as to compensation and promotional activities with respect to gender. In June 2008, the District Court referred the matter to private arbitration where the Claimants sought to proceed on a class-wide basis. The Claimants filed a motion for class certification and SJI opposed the motion. On February 2, 2015, the arbitrator issued a Class Determination Award in which she certified for a class-wide hearing Claimants’ disparate impact declaratory and injunctive relief class claim under Title VII, with a class period of July 22, 2004 through date of trial for the Claimants’ compensation claims and December 7, 2004 through date of trial for Claimants’ promotion claims. The arbitrator otherwise denied Claimants’ motion to certify a disparate treatment class alleged under Title VII, denied a disparate impact monetary damages class alleged under Title VII, and denied an opt-out monetary damages class under the Equal Pay Act. On February 9, 2015, Claimants filed an Emergency Motion To Restrict Communications With The Certified Class And For Corrective Notice. SJI filed its opposition to Claimants’ emergency motion on February 17, 2015, and a hearing was held on February 18, 2015. Claimants’ motion was granted in part and denied in part in an order issued on March 16, 2015. Claimants filed a Motion for Reconsideration Regarding Title VII Claims for Disparate Treatment in Compensation on February 11, 2015, which SJI opposed. April 27, 2015, the arbitrator issued an order denying the Claimants’ Motion. SJI filed with the US District Court for the Southern District of New York a Motion to Vacate the Arbitrator’s Class Certification Award on March 3, 2015, which Claimants opposed. On November 16, 2015, the US District Court for the Southern District of New York granted SJI’s Motion to Vacate the Arbitrator’s Class Certification Award in part and denied it in part. On December 3, 2015, SJI filed with the United States Court of Appeals for the Second Circuit SJI’s Notice of Appeal of the District Court’s November 16, 2015 Opinion and Order. On November 25, 2015, SJI filed a Motion to Stay the AAA Proceedings while SJI appeals the decision of the US District Court for the Southern District of New York to the United States Court of Appeals for the Second Circuit, which Claimants opposed. The arbitrator issued an order denying SJI’s Motion to Stay on February 22, 2016. SJI filed its Brief and Special Appendix with the Second Circuit on March 16, 2016. The matter was fully briefed, and oral argument was heard by the U.S. Court of Appeals for the Second Circuit on November 2, 2016. On April 6, 2015, Claimants filed in the AAA Claimants’ Motion for Clarification or in the Alternative Motion for Stay of the Effect of the Class Certification Award as to the Individual Intentional Discrimination Claims, which SJI opposed. On June 15, 2015, the arbitrator granted the Claimants’ motion. On March 6, 2017, Claimants filed Claimants’ Motion for Conditional Certification of Claimants’ Equal Pay Act Claims and Authorization of Notice, which SJI opposed The arbitrator heard oral argument on Claimants’ Motion on December 18, 2015 and, on February 29, 2016, issued an Equal Pay Act Collective Action Conditional Certification Award and Order Re Claimants’ Motion For Tolling Of EPA Limitations Period, conditionally certifying Claimants’ Equal Pay Act claims as a collective action, and tolling the statute of limitations on EPA claims to October 16, 2003 to ninety days after notice issues to the putative members of the collective action. SJI filed in the AAA a Motion To Stay Arbitration Pending The District Court’s Consideration Of Respondent’s Motion To Vacate Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period on March 10, 2016. SJI filed in the AAA a Renewed Motion To Stay Arbitration Pending The District Court’s Resolution Of Sterling’s Motion To Vacate Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period on March 31, 2016, which Claimants opposed. On April 5, 2016, the arbitrator denied SJI’s Motion. On March 23, 2016 SJI filed with the US District Court for the Southern District of New York a Motion To Vacate The Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period, which Claimants opposed. SJI’s Motion was denied on May 22, 2016. On May 31, 2016, SJI filed a Notice Of Appeal of Judge Rakoff’s opinion and order to the Second Circuit Court of Appeals, which Claimant’s opposed. On June 1, 2017, the Second Circuit Court of Appeals dismissed SJI’s appeal for lack of appellate jurisdiction. Claimants filed a Motion For Amended Class Determination Award on November 18, 2015, and on March 31, 2016 the arbitrator entered an order amending the Title VII class certification award to preclude class members from requesting exclusion from the injunctive and declaratory relief class certified in the arbitration. The arbitrator issued a Bifurcated Case Management Plan on April 5, 2016 and ordered into effect the parties’ Stipulation Regarding Notice Of Equal Pay Act Collective Action And Related Notice Administrative Procedures on April 7, 2016. SJI filed in the AAA a Motion For Protective Order on May 2, 2016, which Claimants opposed. The matter was fully briefed, and oral argument was heard on July 22, 2016. The motion was granted in part on January 27, 2017. Notice to EPA collective action members was issued on May 3, 2016, and the opt-in period for these notice recipients closed on August 1, 2016. Approximately, 10,314 current and former employees submitted consent forms to opt in to the collective action; however, some have withdrawn their consents. The number of valid consents is disputed and yet to be determined. SJI believes the number of valid consents to be approximately 9,124. On July 24, 2017, the United States Court of Appeals for the Second Circuit issued its unanimous Summary Order that held that the absent class members “never consented” to the Arbitrator determining the permissibility of class arbitration under the agreements, and remanded the matter to the District Court to determine whether the Arbitrator exceeded her authority by certifying the Title VII class that contained absent class members who had not opted in the litigation. On August 7, 2017, SJI filed its Renewed Motion to Vacate the Class Determination Award relative to absent class members with the District Court. The matter was fully briefed, and an oral argument was heard on October 16, 2017. On November 10, 2017, SJI filed in the arbitration motions for summary judgment, and for decertification, of Claimants’ Equal Pay Act and Title VII promotions claims. On January 30, 2018, oral argument on SJI’s motions was heard. On January 26, 2018, SJI filed in the arbitration a Motion to Vacate The Equal Pay Act Collective Action Award And Tolling Order asserting that the Arbitrator exceeded her authority by conditionally certifying the Equal Pay Act claim and allowing the absent claimants to opt-in the litigation. On March 12, 2018, the Arbitrator denied SJI’s Motion to Vacate The Equal Pay Act Collective Action Award and Tolling Order. SJI still has a pending motion seeking decertification of the EPA Collective Action before the Arbitrator. On March 19, 2018, the Arbitrator issued an Order partially granting SJI’s Motion to Amend the Arbitrator’s November 2, 2017, Bifurcated Seventh Amended Case Management Plan resulting in a continuance of the May 14, 2018 trial date. A new trial date has not been set. On January 15, 2018, District Court granted SJI’s August 17, 2017 Renewed Motion to Vacate the Class Determination Award finding that the Arbitrator exceeded her authority by binding non-parties (absent class members) to the Title VII claim. The District Court further held that the RESOLVE Agreement does not permit class action procedures, thereby, reducing the Claimants in the Title VII matter from 70,000 to potentially 254. Claimants dispute that the number of claimants in the Title VII is 254. On January 18, 2018, the Claimants filed a Notice of Appeal with the United States Court of Appeals for the Second Circuit. The appeal was fully briefed and oral argument before the Second Circuit occurred on May 7, 2018. On May 17, 2019, SJI submitted a Rule 28(j) letter to the Second Circuit addressing the effects of the Supreme Court’s ruling in Lamps Plus, Inc. v. Varela, No. 17-988 (S. Ct. Apr. 24, 2019), on the pending appeal. The Second Circuit then issued an order directing the parties to submit additional arguments on that issue, which were submitted. On November 18, 2019 the Second Circuit issued an order reversing and remanding the District Court’s January 15, 2018 Order that vacated the Arbitrator’s Class Determination Award certifying for declaratory and injunctive relief a Title VII pay and promotions class of female retail sales employees. The Second Circuit held that the District Court erred when it concluded that the Arbitrator exceeded her authority in purporting to bind absent class members to the Class Determination Award. The Second Circuit remanded the case to the District Court to decide the narrower question of whether the Arbitrator erred in certifying an opt-out, as opposed to a mandatory, class for declaratory and injunctive relief. On December 2, 2019, SJI filed a petition for a hearing en banc with the United States Court of Appeals for the Second Circuit. On January 15, 2020, SJI filed a Rule 28(j) letter in the Second Circuit. On that same day the Second Circuit denied the petition for rehearing en banc. On January 21, 2020, Sterling filed its motion for stay of mandate with the Second Circuit pending the filing of a petition for writ of certiorari with the U.S. Supreme Court. On January 22, 2020, the Second Circuit granted Sterling’s motion for stay of mandate. The petition for a writ of certiorari from the U.S. Supreme Court was filed on June 12, 2020. SJI denies the allegations of the Claimants and has been defending the case vigorously. At this point, no outcome or possible loss or range of losses, if any, arising from the litigation is able to be estimated. Also, as previously reported, on September 23, 2008, the US Equal Employment Opportunity Commission (“EEOC”) filed a lawsuit against SJI in the US District Court for the Western District of New York. This suit was settled on May 5, 2017, as further described below. The EEOC’s lawsuit alleged that SJI engaged in intentional and disparate impact gender discrimination with respect to pay and promotions of female retail store employees from January 1, 2003 to the present. The EEOC asserted claims for unspecified monetary relief and non-monetary relief against the Company on behalf of a class of female employees subjected to these alleged practices. Non-expert fact discovery closed in mid-May 2013. In September 2013, SJI made a motion for partial summary judgment on procedural grounds, which was referred to a Magistrate Judge. The Magistrate Judge heard oral arguments on the summary judgment motion in December 2013. On January 2, 2014, the Magistrate Judge issued his Report, Recommendation and Order, recommending that the Court grant SJI’s motion for partial summary judgment and dismiss the EEOC’s claims in their entirety. The EEOC filed its objections to the Magistrate Judge’s ruling and SJI filed its response thereto. The District Court Judge heard oral arguments on the EEOC’s objections to the Magistrate Judge’s ruling on March 7, 2014 and on March 11, 2014 entered an order dismissing the action with prejudice. On May 12, 2014, the EEOC filed its Notice of Appeal of the District Court Judge’s dismissal of the action to United States Court of Appeals for the Second Circuit. The parties fully briefed the appeal and oral argument occurred on May 5, 2015. On September 9, 2015, the United States Court of Appeals for the Second Circuit issued a decision vacating the District Court’s order and remanding the case back to the District Court for further proceedings. SJI filed a Petition for Panel Rehearing and En Banc Review with the United States Court of Appeals for the Second Circuit, which was denied on December 1, 2015. On December 4, 2015, SJI filed in the United States Court of Appeals for the Second Circuit a Motion Of Appellee Sterling Jewelers Inc. For Stay Of Mandate Pending Petition For Writ Of Certiorari. The Motion was granted by the Second Circuit on December 10, 2015. SJI filed a Petition For Writ Of Certiorari in the Supreme Court of the United States on April 29, 2016, which was denied. The case was remanded to the Western District of New York and on November 2, 2016, the Court issued a case scheduling order. On January 25, 2017, the parties filed a joint motion to extend case scheduling order deadlines. The motion was granted on January 27, 2017. On May 5, 2017 the U.S. District Court for the Western District of New York approved and entered the Consent Decree jointly proposed by the EEOC and SJI, resolving all of the EEOC’s claims against SJI in this litigation for various injunctive relief including but not limited to the appointment of an employment practices expert to review specific policies and practices, a compliance officer to be employed by SJI, as well as obligations relative to training, notices, reporting and record-keeping. The Consent Decree does not require an outside third-party monitor or require any monetary payment. The duration of the Consent Decree was three years and three months, expiring on August 4, 2020. On March 6, 2020, SJI and the EEOC filed their Joint Motion to Approve an Amendment to And Extension of the Term of the Consent Decree, which provides for a limited extension of a few aspects of the Consent Decree terms regarding SJI’s compensation practices, and incorporating its implementation of a new retail team member compensation program into the overall Consent Decree framework. This extension will enable SJI to implement changes to its retail team member compensation strategy and validate that the new program is consistent with the overall purposes of the Consent Decree. On March 11, 2020 the U.S. District Court for the Western District of New York granted the joint motion and entered the parties’ Amendment to And Extension of the Term of the Consent Decree. The term of the amended Consent Decree expires on November 4, 2021. Shareholder Actions In August 2016, two alleged Company shareholders each filed a putative class action complaint in the United States District Court for the Southern District of New York against the Company and its then-current Chief Executive Officer and current Chief Financial Officer (Nos. 16-cv-6728 and 16-cv-6861, the “S.D.N.Y. cases”). On September 16, 2016, the Court consolidated the S.D.N.Y. cases under case number 16-cv-6728. On April 3, 2017, the plaintiffs filed a second amended complaint, purportedly on behalf of persons that acquired the Company’s securities on or between August 29, 2013, and February 27, 2017, naming as defendants the Company, its then-current and former Chief Executive Officers, and its current and former Chief Financial Officers. The second amended complaint alleged that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, misrepresenting the Company’s business and earnings by (i) failing to disclose that the Company was allegedly having issues ensuring the safety of customers’ jewelry while in the Company’s custody for repairs, which allegedly damaged customer confidence; (ii) making misleading statements about the Company’s credit portfolio; and (iii) failing to disclose reports of sexual harassment allegations that were raised by claimants in an ongoing pay and promotion gender discrimination class arbitration (the “Arbitration”). The second amended complaint alleged that the Company’s share price was artificially inflated as a result of the alleged misrepresentations and sought unspecified compensatory damages and costs and expenses, including attorneys’ and experts’ fees. In March 2017, two other alleged Company shareholders each filed a putative class action complaint in the United States District Court for the Northern District of Texas against the Company and its then-current and former Chief Executive Officers (Nos. 17-cv-875 and 17-cv-923, the “N.D. Tex. cases”). Those complaints were nearly identical to each other and alleged that the defendants’ statements concerning the Arbitration violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The N.D. Tex. cases were subsequently transferred to the Southern District of New York and consolidated with the S.D.N.Y. cases (the “Consolidated Action”). On July 27, 2017, the Court appointed a lead plaintiff and lead plaintiff’s counsel in the Consolidated Action. On August 3, 2017, the Court ordered the lead plaintiff in the Consolidated Action to file a third amended complaint by September 29, 2017. On September 29, 2017, the lead plaintiff filed a third amended complaint that covered a putative class period of August 29, 2013, through May 24, 2017, and that asserted substantially similar claims to the second amended complaint, except that it omitted the claim based on defendants’ alleged misstatements concerning the security of customers’ jewelry while in the Company’s custody for repairs. The defendants moved to dismiss the third amended complaint on December 1, 2017. On December 4, 2017, the Court entered an order permitting the lead plaintiff to amend its complaint as of right by December 22, 2017, and providing that the lead plaintiff would not be given any further opportunity to amend its complaint to address the issues raised in the defendants’ motion to dismiss. On December 15, 2017, another alleged Company shareholder filed a putative class action complaint in the United States District Court for the Southern District of New York against the Company and its current Chief Executive Officer and Chief Financial Officer (No. 17-cv-9853). This complaint alleged that the defendants made misleading statements regarding the Company’s credit portfolio between August 24, 2017, and November 21, 2017, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and sought unspecified compensatory damages and costs and expenses, including attorneys’ and experts’ fees. On January 7, 2018, this case was consolidated into the Consolidated Action. On December 22, 2017, the lead plaintiff in the Consolidated Action filed its fourth amended complaint, which asserted substantially the same claims as its third amended complaint for an expanded class period of August 28, 2013, through December 1, 2017. On January 26, 2017, the defendants moved to dismiss the fourth amended complaint. This motion was fully briefed as of March 9, 2018. On March 20, 2018, the Court granted the lead plaintiff leave to file a fifth amended complaint. On March 22, 2018, the lead plaintiff in the Consolidated Action filed its fifth amended complaint which asserts substantially the same claims as its fourth amended complaint for an expanded class period of August 29, 2013, through March 13, 2018. The prior motion to dismiss was denied as moot. On March 30, 2018, the defendants moved to dismiss the fifth amended complaint. On November 26, 2018, the Court denied the defendants’ motion to dismiss. On March 15, 2019, the lead plaintiff moved for appointment of a class representative and class counsel and for certification of a class period of August 29, 2013, through March 13, 2018. On July 10, 2019, the Court granted the motion and certified a class of all persons and entities who purchased or otherwise acquired Signet common stock from August 29, 2013 to May 25, 2017. The Court also appointed a class representative and class counsel. On May 9, 2019, the defendants moved for judgment on the pleadings with respect to certain alleged misstatements. On June 11, 2019, the Court denied the defendants’ motion for judgment on the pleadings. The defendants moved for reconsideration on June 18, 2019. The Court denied that motion on June 20, 2019. On July 24, 2019, the defendants filed with the United States Court of Appeals for the Second Circuit a petition for permission to appeal the District Court’s class certification decision. On November 19, 2019, the Court of Appeals granted that petition. On November 20, 2019, the parties jointly moved to stay proceedings in the District Court while the appeal is pending. On November 21, 2019, the District Court granted that motion. On January 16, 2020, the lead plaintiff and defendants filed a joint stipulation in the Court of Appeals withdrawing the appeal without costs or attorneys’ fees and providing that the defendants may reinstate the appeal by filing written notice by August 28, 2020. The Court of Appeals granted the stipulation on January 16, 2020. On March 16, 2020, the Company, all of the other defendant parties to the Consolidated Action, and the lead plaintiff entered into a settlement agreement in the Consolidated Action. The settlement of $240 million provides for the dismissal of the Consolidated Action with prejudice. The settlement agreement also states that the Company and all the other defendants expressly deny any and all allegations of fault, liability, wrongdoing, or damages whatsoever, and that defendants are entering into the settlement solely to eliminate the uncertainty, burden, and expense of further protracted litigation. As a result of the settlement, the Company recorded a charge of $33.2 million during the fourth quarter of Fiscal 2020 in other operating income (loss), which includes administration costs of $0.6 million and is recorded net of expected recoveries from the Company’s insurance carriers of $207.4 million. As of May 2, 2020 and February 1, 2020, the liability related to settlement and administration fees was recorded in other current liabilities, and the expected insurance recoveries are recorded in other current assets in the condensed consolidated balance sheet. The settlement was fully funded in the second quarter of Fiscal 2021, and the Company contributed approximately $35 million of the $240 million settlement payment, net of insurance proceeds and including the impact of foreign currency. The settlement is subject to court approval at a fairness hearing, which is currently scheduled for July 21, 2020, following notice to the class. On March 27, 2019, two actions were filed in the U.S. District Court for the Southern District of New York by investment funds that allegedly purchased the Company’s stock (Nos. 19-cv-2757 and 19-cv-2758), and name the Company and its current and former Chief Executive Officers and Chief Financial Officers as defendants. Both complaints allege violations of Sections 10(b), 18, and 20(a) of the Securities Exchange Act of 1934, and common law fraud, based on alleged misstatements and omissions concerning the Company’s credit portfolio. These claims are substantially the same as the credit-related claims in the Consolidated Action, except that No. 19-cv-2757 alleges a “relevant period” of August 29, 2013, to June 2, 2016, and No. 19-cv-2758 alleges a “relevant period” of August 29, 2013, to August 25, 2016. On May 14, 2019, and May 29, 2019, the Court entered orders staying these actions until entry of final judgment in the Consolidated Action. On March 4, 2020, the plaintiffs in No. 19-cv-2757 filed a summons with notice in the Supreme Court of the State of New York (No. 651488/2020), seeking relief that is substantially similar to those plaintiffs’ claim for common law fraud in No. 19-cv-2757. On October 25, 2019, two more actions were filed in the U.S. District Court for the Southern District of New York by investment funds that allegedly purchased the Company’s stock (Nos. 19-cv-9916 and 19-cv-9917), and name the Company and its current and former Chief Executive Officers and Chief Financial Officers as defendants. Both complaints allege violations of Sections 10(b), 18, and 20(a) of the Securities Exchange Act of 1934, and common law fraud. The claims in No. 19-cv-9916 are substantially the same as the claims in the Consolidated Action related to the Company’s alleged failure to disclose reports of sexual harassment allegations that were raised by claimants in the Arbitration, except that No. 19-cv-9916 alleges a “relevant period” of December 2, 2016, to February 1, 2017. The claims in No. 19-cv-9917 are substantially the same as the claims in the Consolidated Action, except that No. 19-cv-9917 alleges a “relevant period” of August 28, 2014, to March 16, 2017. On November 5, 2019, the Court entered orders staying these actions until entry of final judgment in the Consolidated Action. On June 27, 2020, the Company and plaintiffs in the four stayed actions above (Case Id Nos. 19-cv-2757, 19-cv-2758, 19-cv-9916 and 19-cv-9917) reached a settlement in principle subject to final documentation. The Company recorded a pre-tax charge of $8.5 million, net of expected insurance recovery, during the 13 weeks ended May 2, 2020 in anticipation of those four anticipated settlements. The final amount of the settlement and net charge are dependent upon the amount such plaintiffs would receive as part of the Consolidated Action and the actual amount of the Company’s insurance recovery, and are not expected to be materially different than the amounts recorded. Derivative Action On September 1, 2017, Josanne Aungst filed a putative shareholder derivative action entitled Aungst v. Light, et al., No. CV-2017-3665, in the Court of Common Pleas for Summit County Ohio. The complaint in this action, which purports to have been brought by Ms. Aungst on behalf of the Company, names certain current and former directors and officers of the Company as defendants and alleges claims for breach of fiduciary duty, abuse of control, and gross mismanagement. The complaint challenges certain public disclosures and conduct relating to the allegations that were raised by the claimants in the Arbitration. The complaint also alleges that the Company’s share price was artificially inflated as a result of alleged misrepresentations and omissions. The complaint seeks money damages on behalf of the Company, changes to the Company’s corporate governance, and other equitable relief, as well as plaintiff’s legal fees and costs. The defendants’ motion to dismiss the complaint was granted on February 28, 2019. On March 26, 2019, plaintiff filed a notice of appeal of the trial court’s dismissal of the action. On July 1, 2019, plaintiff filed an appeal brief in the Court of Appeals, Ninth Judicial District, Summit County, Ohio. Defendants filed their answering brief on August 9, 2019. Plaintiff filed a reply brief on August 19, 2019. The Court of Appeals heard oral argument on January 16, 2020. On June 17, 2020, the Court of Appeals issued a decision affirming the dismissal. Regulatory Matters On January 16, 2019, Sterling Jewelers Inc., (“Sterling”), a wholly owned subsidiary of Company, without admitting or denying any of the allegations, findings of fact, or conclusions of law (except to establish jurisdiction), entered into a Consent Order with the Consumer Financial Protection Bureau (the "CFPB") and New York Attorney General (the “NY AG”) settling a previously disclosed investigation of certain in-store credit practices, promotions, and payment protection products (the "Consent Order"). Among other things, the Consent Order requires Sterling to (i) submit an accurate written compliance report to the CFPB; (ii) pay an $10,000,000 civil money penalty to the CFPB; (iii) pay a $1,000,000 civil money penalty to the NY AG: and (iv) maintain policies and procedures related to the issuance of credit cards, including with respect to credit applications, credit financing terms and conditions, and any related add-on products that are reasonably designed to ensure consumer knowledge or consent. All payments required by the Consent Order were made in February 2019. We continue to work to ensure compliance with the Consent Order, which may result in us incurring additional costs. See Item 1A of Signet’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020 filed with the SEC on March 26, 2020 for risks relating to the CFPB and our continued compliance with the Consent Order.
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Organization and principal accounting policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||
Basis of preparation | Basis of preparation The condensed consolidated financial statements of Signet are prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US generally accepted accounting principles (“US GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in Signet’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020 filed with the SEC on March 26, 2020.
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Use of estimates | Use of estimates The preparation of these condensed consolidated financial statements, in conformity with US GAAP and SEC regulations for interim reporting, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and as a result of the above noted risks associated with COVID-19, it is reasonably possible that those estimates will change in the near term and the effect could be material. Estimates and assumptions are primarily made in relation to the valuation of accounts receivables, inventories, deferred revenue, derivatives, employee benefits, income taxes, contingencies, leases, asset impairments for goodwill, indefinite-lived intangible and long-lived assets, and the depreciation and amortization of long-lived assets, as well as accounting for business combinations.
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Fiscal year | Fiscal year The Company’s fiscal year ends on the Saturday nearest to January 31st. Fiscal 2021 and Fiscal 2020 refer to the 52 week periods ending January 30, 2021 and February 1, 2020, respectively. Within these condensed consolidated financial statements, the first quarter of the relevant fiscal years 2021 and 2020 refer to the 13 weeks ended May 2, 2020 and May 4, 2019, respectively.
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Foreign currency translation | Foreign currency translation The financial position and operating results of certain foreign operations, including certain subsidiaries operating in the UK as part of the International segment and Canada as part of the North America segment, are consolidated using the local currency as the functional currency. Assets and liabilities are translated at the rates of exchange on the balance sheet date, and revenues and expenses are translated at the monthly average rates of exchange during the period. Resulting translation gains or losses are included in the accompanying condensed consolidated statements of shareholders’ equity as a component of accumulated other comprehensive income (loss) (“AOCI”). Gains or losses resulting from foreign currency transactions are included in other operating income, net within the condensed consolidated statements of operations.
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New accounting pronouncements | New accounting pronouncements recently adopted The following ASU’s were adopted as of February 2, 2020. The impact on the Company's consolidated financial statements is described within the table below.
New accounting pronouncements issued but not yet adopted There are no new accounting pronouncements issued that are expected to be applicable to the Company in future periods.
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Revenue recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables provide the Company’s revenue, disaggregated by banner, major product and channel, for the 13 weeks ended May 2, 2020 and May 4, 2019:
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Other Assets | Unamortized deferred selling costs as of May 2, 2020, February 1, 2020 and May 4, 2019 were as follows:
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Deferred Revenue | Deferred revenue is comprised primarily of ESP and voucher promotions as follows:
(2) During the first quarter of Fiscal 2021, the Company recognized sales of $44.5 related to deferred revenue that existed at February 1, 2020 in respect to ESP. Additionally, no ESP revenue was recognized beginning on March 23, 2020 and through the end of the quarter due to the temporary closure of the Company’s stores and service centers as a result of COVID-19.
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Segment information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment reporting information, by segment |
(3) Operating income (loss) during the 13 weeks ended May 2, 2020 includes a charge of $8.5 million related to a proposed settlement of previously disclosed shareholder litigation matters. See Note 21 for additional information. Additionally, operating income (loss) during the 13 weeks ended May 2, 2020 and May 4, 2019 includes charges of $0.2 million and $27.3 million, respectively, primarily related to severance and professional services recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information.
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Restructuring Plans (Tables) |
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Restructuring and Related Costs | The composition of the restructuring charges the Company incurred during the 13 weeks ended May 2, 2020, as well as the cumulative amount incurred under the Plan through May 2, 2020, were as follows:
Restructuring charges and other Plan related costs are classified in the condensed consolidated statements of operations as follows:
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Schedule of Plan Liabilities | The following table summarizes the activity related to the Plan liabilities for Fiscal 2021:
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Redeemable preferred shares (Tables) |
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Temporary Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Preferred Shares |
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Shareholders' equity (Tables) |
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Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Dividends | Dividends declared on common shares during the 13 weeks ended May 2, 2020 and May 4, 2019 were as follows:
(1) Signet’s dividend policy for common shares results in the dividend payment date being a quarter in arrears from the declaration date. As a result, as of May 4, 2019, $19.3 million, was recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets reflecting the cash dividends on common shares declared for the first quarter of Fiscal 2020.
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Series A Redeemable Convertible Preferred Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Dividends | Dividends declared on preferred shares during the 13 weeks ended May 2, 2020 and May 4, 2019 were as follows:
(1) Signet’s preferred shares dividends result in the dividend payment date being a quarter in arrears from the declaration date. As a result, as of May 2, 2020 and May 4, 2019, $7.8 million and $7.8 million, respectively, has been recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets reflecting the dividends on preferred shares declared for the first quarter of Fiscal 2021 and Fiscal 2020, respectively. As disclosed in Note 6, the first quarter Fiscal 2021 dividend will be paid “in-kind” during the second quarter of Fiscal 2021.
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Earnings (loss) per common share (EPS) (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share, basic | The computation of basic EPS is outlined in the table below:
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Schedule of earnings per share, diluted | The computation of diluted EPS is outlined in the table below:
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Schedule of antidilutive securities excluded from computation of earnings per share | The calculation of diluted EPS excludes the following items for each respective period on the basis that their effect would be anti-dilutive.
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Accumulated other comprehensive income (loss) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables present the changes in AOCI by component and the reclassifications out of AOCI, net of tax:
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Reclassification out of Accumulated Other Comprehensive Income | The amounts reclassified from AOCI were as follows:
|
Income taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Effective Tax Rate |
|
Accounts receivable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable By Portfolio Segment | The following table presents the components of Signet’s accounts receivable:
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current | The following table summarizes the Company’s inventory by classification:
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Asset Impairment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Impairment Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Asset Impairment | The following table summarizes the Company's asset impairment activity for the periods presented:
(1) Refer to Note 15 for additional information.
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Term and DIscount Rate | The weighted average lease term and discount rate for the Company’s outstanding operating leases were as follows:
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Total Lease Costs For Operating Leases | Total lease costs are as follows:
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Schedule of Supplemental Cash Flow Information | Supplemental cash flow information related to leases was as follows:
(1) Amount excludes impairment of right-of-use assets of $28.5 million during the first quarter of Fiscal 2021, as further described in note 13.
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Future Minimum Operating Lease Payments | The future minimum operating lease payments for operating leases having initial or non-cancelable terms in excess of one year are as follows:
|
Goodwill and intangibles (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Goodwill by Reporting Unit | The following table summarizes the Company’s goodwill by reportable segment:
(1) During Fiscal 2020, an immaterial out-of-period adjustment was recognized related to an error in the calculation of goodwill impairments during Fiscal 2019.
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Schedule of Finite-Lived Intangible Assets | The following table provides additional detail regarding the composition of intangible assets and liabilities:
(1) Accumulated amortization amounts related to the indefinite-lived intangible assets represents accumulated impairment losses recorded to date and includes the impact of foreign currency.
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Derivatives (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table summarizes the fair value and presentation of derivative instruments in the condensed consolidated balance sheets:
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the pre-tax gains (losses) recorded in AOCI for derivatives designated in cash flow hedging relationships:
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Derivative Instruments, Gain (Loss) | The following tables summarize the effect of derivative instruments designated as cash flow hedges in OCI and the condensed consolidated statement of operations: Foreign currency contracts
Commodity contracts
Interest rate swaps
Total amounts presented in the condensed consolidated statements of operations
The following table presents the effects of the Company’s derivatives instruments not designated as cash flow hedges in the condensed consolidated statement of operations:
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Fair value measurement (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping | The methods Signet uses to determine fair value on an instrument-specific basis are detailed below:
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Schedule of Carrying Values and Estimated Fair Values | The following table provides a summary of the carrying amount and fair value of outstanding debt:
|
Loans, overdrafts and long-term debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Loans, Overdrafts and Long-Term Debt |
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Warranty reserve (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 02, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities | The warranty reserve for diamond and gemstone guarantee, included in accrued expenses and other current liabilities and other non-current liabilities, is as follows:
|
Organization and principal accounting policies - Additional information (Details) |
3 Months Ended |
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May 02, 2020
segment
| |
Property, Plant and Equipment [Line Items] | |
Number of reportable segments (segment) | 3 |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Seasonal revenues, fourth quarter sales, percent | 35.00% |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Seasonal revenues, fourth quarter sales, percent | 40.00% |
Revenue recognition - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Extended Service Plans and Lifetime Warranty Agreements | ||
Disaggregation of Revenue [Line Items] | ||
Capitalized contract cost, amortization | $ 4.3 | $ 7.5 |
North America | Extended Service Plans and Lifetime Warranty Agreements | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, performance obligation, description of timing | 17 years | |
North America | Jewelry Replacement Plan | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, performance obligation, description of timing | three years |
Revenue recognition - Performance Obligation Narrative (Details) - Extended Service Plans and Lifetime Warranty Agreements - North America - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-05-03 |
May 02, 2020 |
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue recognized, percentage | 55.00% |
Expected timing of satisfaction, period | 2 years |
Revenue recognition - Unamortized Deferred Selling Costs (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Revenue from Contract with Customer [Abstract] | |||
Other current assets | $ 23.6 | $ 23.6 | $ 23.8 |
Other assets | 79.5 | 80.0 | 76.4 |
Deferred ESP selling costs | $ 103.1 | $ 103.6 | $ 100.2 |
Revenue recognition - ESP and Voucher Promotions (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Disaggregation of Revenue [Line Items] | |||
Total deferred revenue | $ 991.0 | $ 997.7 | $ 976.6 |
Current liabilities | 271.2 | 266.2 | 277.0 |
Non-current liabilities | 719.8 | 731.5 | 699.6 |
ESP deferred revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total deferred revenue | 961.0 | 960.0 | 931.3 |
Voucher promotions and other | |||
Disaggregation of Revenue [Line Items] | |||
Total deferred revenue | $ 30.0 | $ 37.7 | $ 45.3 |
Revenue recognition - ESP Deferred Revenue Rollforward (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Change in Contract with Customer, Liability [Roll Forward] | ||
ESP deferred revenue, beginning of period | $ 997.7 | |
ESP deferred revenue, end of period | 991.0 | $ 976.6 |
Extended Service Plan | ||
Change in Contract with Customer, Liability [Roll Forward] | ||
ESP deferred revenue, beginning of period | 960.0 | 927.6 |
Plans sold | 55.0 | 96.0 |
Revenue recognized | (54.0) | (92.3) |
ESP deferred revenue, end of period | 961.0 | $ 931.3 |
Extended Service Plan and Voucher Promotions | ||
Change in Contract with Customer, Liability [Roll Forward] | ||
Revenue recognized | $ (44.5) |
Segment information - Additional Information (Details) |
3 Months Ended |
---|---|
May 02, 2020
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments (segment) | 3 |
Segment information - Summary of Activity by Segment (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Segment Reporting Information [Line Items] | ||
Sales | $ 852.1 | $ 1,431.7 |
Operating income (loss) | (299.6) | (2.6) |
Interest expense, net | (7.1) | (9.2) |
Other non-operating income, net | 0.1 | 0.3 |
Income (loss) before income taxes | (306.6) | (11.5) |
Inventory write-down | 0.4 | 0.0 |
Asset impairments | 136.3 | 0.0 |
North America | ||
Segment Reporting Information [Line Items] | ||
Sales | 781.1 | 1,300.3 |
Operating income (loss) | (234.2) | 48.1 |
Inventory write-down | (0.4) | (0.5) |
Severance costs | 8.9 | |
Asset impairments | 117.9 | |
International | ||
Segment Reporting Information [Line Items] | ||
Sales | 64.9 | 111.5 |
Operating income (loss) | (38.6) | (8.0) |
Severance costs | 3.6 | |
Asset impairments | 18.4 | |
Other | ||
Segment Reporting Information [Line Items] | ||
Sales | 6.1 | 19.9 |
Operating income (loss) | (26.8) | (42.7) |
Severance costs | 0.2 | $ 27.3 |
Gain (loss) related to litigation settlement | $ (8.5) |
Restructuring Plans - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 27 Months Ended | 36 Months Ended | ||
---|---|---|---|---|---|
May 02, 2020 |
May 04, 2019 |
May 05, 2018 |
May 02, 2020 |
Feb. 03, 2021 |
|
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 12.7 | $ 26.8 | |||
Signet Path to Brillance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring plan, length | 3 years | ||||
Restructuring charges | 12.3 | $ 26.8 | $ 217.3 | ||
Cash payments | $ 12.0 | ||||
Scenario, Forecast | Minimum | Signet Path to Brillance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 200.0 | ||||
Cash payments | 105.0 | ||||
Scenario, Forecast | Maximum | Signet Path to Brillance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 220.0 | ||||
Cash payments | $ 115.0 |
Restructuring Plans - Schedule of Plan Liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | 27 Months Ended | |
---|---|---|---|
May 02, 2020 |
May 04, 2019 |
May 02, 2020 |
|
Restructuring Reserve [Roll Forward] | |||
Charged to expense | $ 12.7 | $ 26.8 | |
Signet Path to Brillance | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 12.4 | ||
Payments and other adjustments | (12.0) | ||
Charged to expense | 12.3 | $ 26.8 | $ 217.3 |
Ending balance | 12.7 | 12.7 | |
Termination benefits | Signet Path to Brillance | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 2.0 | ||
Payments and other adjustments | (1.2) | ||
Charged to expense | 2.9 | 28.7 | |
Ending balance | 3.7 | 3.7 | |
Store closure and other costs | Signet Path to Brillance | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 10.4 | ||
Payments and other adjustments | (10.8) | ||
Charged to expense | 9.4 | ||
Ending balance | $ 9.0 | $ 9.0 |
Redeemable preferred shares - Additional Information (Details) - Series A Redeemable Convertible Preferred Stock - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Oct. 05, 2016 |
Aug. 01, 2020 |
May 02, 2020 |
May 04, 2019 |
Feb. 01, 2020 |
|
Temporary Equity [Line Items] | |||||
Redeemable convertible preferred stock, shares issued (shares) | 625,000 | ||||
Preferred stock, purchase price | $ 625.0 | ||||
Shares issued, price per share (in usd per share) | $ 1,000 | ||||
Preferred stock, dividend rate, percentage | 5.00% | ||||
Payments of stock issuance costs | $ 13.7 | ||||
Accumulated accretion of dividends | $ 6.1 | $ 4.4 | $ 5.7 | ||
Accretion on redeemable convertible preferred shares | $ 0.4 | $ 0.4 | |||
Scenario, Forecast | |||||
Temporary Equity [Line Items] | |||||
Preferred stock, increase in stated value (in usd per share) | $ 12.50 |
Redeemable preferred shares - Redeemable Preferred Shares (Details) - Series A Redeemable Convertible Preferred Stock $ / shares in Units, shares in Millions, $ in Millions |
May 02, 2020
USD ($)
$ / shares
shares
|
Feb. 01, 2020
USD ($)
$ / shares
shares
|
May 04, 2019
USD ($)
$ / shares
shares
|
---|---|---|---|
Temporary Equity [Line Items] | |||
Conversion ratio | 12.2297 | 12.2297 | 11.5493 |
Conversion price (usd per share) | $ / shares | $ 81.7682 | $ 81.7682 | $ 86.5853 |
Conversion of stock, shares issued (shares) | shares | 7.6 | 7.6 | 7.2 |
Liquidation preference | $ | $ 632.8 | $ 632.8 | $ 632.8 |
Shareholders' equity - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Dividends Payable [Line Items] | ||
Dividends declared per common share (usd per share) | $ 0.00 | $ 0.37 |
Dividends, common stock | $ 0.0 | $ 19.3 |
Dividends declared per preferred share (usd per share) | $ 12.50 | $ 12.50 |
Dividends, preferred stock, paid-in-kind | $ 7.8 | |
Dividends, preferred stock | $ 7.8 | |
Common Stock | Accrued expenses and other current liabilities | ||
Dividends Payable [Line Items] | ||
Dividends payable | 19.3 | |
Series A Redeemable Convertible Preferred Stock | Accrued expenses and other current liabilities | ||
Dividends Payable [Line Items] | ||
Dividends payable | $ 7.8 | $ 7.8 |
Shareholders' equity - Share Repurchase (Details) $ in Millions |
May 02, 2020
USD ($)
|
---|---|
Equity [Abstract] | |
Remaining authorized repurchase amount | $ 165.6 |
Earnings (loss) per common share (EPS) - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
EPS – basic | ||
Net income (loss) attributable to common shareholders | $ (205.3) | $ (18.2) |
Weighted average common shares outstanding (shares) | 51.8 | 51.6 |
EPS – basic (usd per share) | $ (3.96) | $ (0.35) |
EPS – diluted | ||
Net income (loss) attributable to common shareholders | $ (205.3) | $ (18.2) |
Weighted average common shares outstanding (shares) | 51.8 | 51.6 |
EPS – diluted (usd per share) | $ (3.96) | $ (0.35) |
Earnings (loss) per common share (EPS) - Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from the calculation of earnings per share (shares) | 8.6 | 8.3 |
Share awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from the calculation of earnings per share (shares) | 1.0 | 1.1 |
Potential impact of preferred shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from the calculation of earnings per share (shares) | 7.6 | 7.2 |
Income taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Estimated annual effective tax rate before discrete items | 24.50% | 14.70% |
Discrete items recognized | 11.20% | (1.70%) |
Effective tax rate recognized in statement of operations | 35.70% | 13.00% |
Income taxes - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
May 02, 2020
USD ($)
| |
Income Tax Disclosure [Abstract] | |
CARES Act, income tax benefit on Tax Cuts and Jobs Act | $ 67.5 |
CARES Act, income tax benefit on net operating losses | 48.5 |
Increase in valuation allowance | $ 56.7 |
Accounts receivable - Portfolio of Accounts Receivable (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Receivables [Abstract] | |||
Accounts receivable, held for investment | $ 27.8 | $ 34.4 | $ 15.3 |
Accounts receivable, held for sale | 2.0 | 4.4 | 7.8 |
Accounts receivable | $ 29.8 | $ 38.8 | $ 23.1 |
Accounts receivable - Additional Information (Details) - CarVal and Castlelake |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jan. 30, 2021 |
Feb. 01, 2020 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, purchase of forward flow receivables, term | 5 years | ||
Accounts receivable, sale, percentage of revenue | 7.00% | ||
Accounts receivable, remaining purchase price of receivables sold, percentage | 5.00% | ||
Scenario, Forecast | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, sale, percentage of revenue | 2.50% |
Inventories - Summary of Inventory Components (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Raw materials | $ 69.8 | $ 56.2 | $ 74.2 |
Finished goods | 2,322.4 | 2,275.5 | 2,320.0 |
Total inventories | $ 2,392.2 | $ 2,331.7 | $ 2,394.2 |
Inventories - Narrative (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Inventory reserves | $ 55.5 | $ 67.0 | $ 84.7 |
Asset Impairment - Schedule of Asset Impairment (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
May 02, 2020 |
Aug. 03, 2019 |
May 04, 2019 |
|
Asset Impairment Charges [Abstract] | |||
Goodwill impairment | $ 10.7 | $ 47.7 | $ 0.0 |
Indefinite-lived intangible asset impairment | 83.3 | 0.0 | |
Property, plant and equipment impairment | 13.8 | 0.0 | |
Operating lease ROU asset impairment | 28.5 | 0.0 | |
Total | $ 136.3 | $ 0.0 |
Asset Impairment - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Asset Impairment Charges [Abstract] | ||
Property, plant and equipment impairment | $ 13.8 | $ 0.0 |
Operating lease ROU asset impairment | $ 28.5 | $ 0.0 |
Leases - Lease Term and Discount Rate (Details) |
May 02, 2020 |
---|---|
Leases [Abstract] | |
Operating lease, weighted average remaining lease term (years) | 6 years 7 months 6 days |
Operating lease, weighted average discount rate, percent | 5.50% |
Leases - Total Lease Costs For Operating Leases (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 111.4 | $ 114.4 |
Short-term lease cost | 4.9 | 7.8 |
Variable lease cost | 25.6 | 26.6 |
Sublease income | (0.5) | (0.7) |
Total lease cost | $ 141.4 | $ 148.1 |
Leases - Schedule of Supplementary Cash Flow Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 49.3 | $ 118.0 |
Operating lease right-of-use assets obtained in exchange for lease obligations | 14.2 | 6.5 |
Reduction in the carrying amount of right-of-use assets | 87.9 | 87.3 |
Operating lease ROU asset impairment | $ 28.5 | $ 0.0 |
Leases - Future Minimum Payments For Operating Leases (Details) $ in Millions |
May 02, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of Fiscal 2021 | $ 333.3 |
Fiscal 2022 | 388.6 |
Fiscal 2023 | 329.7 |
Fiscal 2024 | 262.0 |
Fiscal 2025 | 206.0 |
Thereafter | 547.8 |
Total minimum lease payments | 2,067.4 |
Less: Imputed interest | (342.3) |
Present value of lease liabilities | $ 1,725.1 |
Goodwill and intangibles - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
May 02, 2020 |
Aug. 03, 2019 |
May 04, 2019 |
Feb. 01, 2020 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill and intangible asset impairment | $ 94.0 | |||
Goodwill impairment | 10.7 | $ 47.7 | $ 0.0 | |
Indefinite-lived intangible asset impairment | 83.3 | $ 0.0 | ||
Zales | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment | 35.2 | |||
R2Net Inc. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment | $ 12.5 | |||
North America | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill impairment | 10.7 | $ 47.7 | ||
Indefinite-lived intangible asset impairment | $ 83.3 |
Goodwill and intangibles - Summary of Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
May 02, 2020 |
Aug. 03, 2019 |
May 04, 2019 |
Feb. 01, 2020 |
|
Goodwill [Roll Forward] | ||||
Impairment | $ (10.7) | $ (47.7) | $ 0.0 | |
North America | ||||
Goodwill [Roll Forward] | ||||
Beginning Balance | 248.8 | $ 296.6 | $ 296.6 | |
Impairment | (10.7) | (47.7) | ||
Impact of foreign exchange and other adjustments | (0.1) | (0.1) | ||
Ending Balance | $ 238.0 | $ 248.8 |
Goodwill and intangibles - Composition of Finite-Lived Intangibles (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Intangible assets, net: | |||
Gross carrying amount | $ 52.4 | $ 53.2 | $ 53.0 |
Accumulated amortization | (50.4) | (50.9) | (50.2) |
Net carrying amount | 2.0 | 2.3 | 2.8 |
Indefinite-lived intangible assets, gross | 472.4 | 475.4 | 475.1 |
Accumulated amortization | (295.7) | (213.9) | (213.8) |
Indefinite-lived intangible assets | 176.7 | 261.5 | 261.3 |
Intangible assets, gross | 524.8 | 528.6 | 528.1 |
Accumulated amortization, net | (346.1) | (264.8) | (264.0) |
Total intangible assets, net | 178.7 | 263.8 | 264.1 |
Intangible liabilities, net | |||
Gross carrying amount | (113.2) | (113.9) | (113.7) |
Accumulated amortization | 98.7 | 98.0 | 93.8 |
Total | $ (14.5) | $ (15.9) | $ (19.9) |
Derivatives - Additional Information (Details) £ in Millions |
May 02, 2020
USD ($)
oz
|
May 02, 2020
GBP (£)
oz
|
Feb. 01, 2020
USD ($)
oz
|
May 04, 2019
USD ($)
oz
|
Mar. 31, 2015
USD ($)
|
---|---|---|---|---|---|
Interest rate swaps | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | $ 300,000,000.0 | ||||
Foreign currency contracts | Not Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | $ 177,600,000 | $ 224,200,000 | $ 92,400,000 | ||
Cash Flow Hedging | Foreign currency contracts | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | $ 0.0 | $ 23,000,000.0 | $ 20,600,000 | ||
Cash Flow Hedging | Commodity contracts | |||||
Derivative [Line Items] | |||||
Derivative, notional amount in gold (in oz) | oz | 0 | 0 | 63,000 | 92,000 | |
Shareholder Actions | Foreign currency contracts | Not Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | £ | £ 95 |
Derivatives - Derivatives not Designated as Hedging Instruments (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Not Designated as Hedging Instrument | Foreign currency contracts | Other operating income, net | ||
Derivative [Line Items] | ||
Foreign currency contracts not designated as hedging | $ (3.9) | $ 1.1 |
Fair value measurement - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Aug. 04, 2018 |
May 02, 2020 |
|
Fair Value Disclosures [Abstract] | ||
Sale of receivables. percentage deferred until second anniversary of closing date | 5.00% | |
Deferred payment, fair value disclosure | $ 22.8 |
Fair value measurement - Outstanding Debt (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Outstanding debt | $ 246.0 | $ 245.9 | $ 680.0 |
Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Outstanding debt | 197.1 | 244.8 | 649.4 |
Senior Notes | Level 2 | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Outstanding debt | 146.5 | 146.4 | 395.5 |
Senior Notes | Level 2 | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Outstanding debt | 97.1 | 144.8 | 363.4 |
Term Loan | Level 2 | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Outstanding debt | 99.5 | 99.5 | 284.5 |
Term Loan | Level 2 | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Outstanding debt | $ 100.0 | $ 100.0 | $ 286.0 |
Loans, overdrafts and long-term debt - Loans, overdrafts and long-term debt (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Gross debt | $ 1,359.7 | $ 613.1 | $ 687.8 |
Less: Current portion of loans and overdrafts | (22.2) | (95.6) | (43.7) |
Less: Unamortized debt issuance costs | (1.5) | (1.6) | (5.1) |
Total long-term debt | 1,336.0 | 515.9 | 639.0 |
Other loans and bank overdrafts | |||
Debt Instrument [Line Items] | |||
Gross debt | 22.2 | 95.6 | 2.7 |
Senior Unsecured Notes Due in 2024 | Senior Unsecured Notes | |||
Debt Instrument [Line Items] | |||
Gross debt | 147.5 | 147.5 | 399.1 |
Senior Asset-Based Credit Facility | Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Gross debt | 1,090.0 | 270.0 | 0.0 |
Senior Asset-Based Credit Facility | Line of Credit | Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Gross debt | 100.0 | 100.0 | 0.0 |
Credit Facility | Line of Credit | Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Gross debt | $ 0.0 | $ 0.0 | $ 286.0 |
Warranty reserve - Warranty Reserve Rollforward (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty reserve, beginning of period | $ 36.3 | $ 33.2 |
Warranty expense | 3.2 | 3.5 |
Utilized | (2.2) | (2.9) |
Warranty reserve, end of period | $ 37.3 | $ 33.8 |
Warranty reserve (Details) - USD ($) $ in Millions |
May 02, 2020 |
Feb. 01, 2020 |
May 04, 2019 |
Feb. 02, 2019 |
---|---|---|---|---|
Other Liabilities Disclosure [Abstract] | ||||
Current liabilities | $ 11.0 | $ 10.6 | $ 10.1 | |
Non-current liabilities | 26.3 | 25.7 | 23.7 | |
Total warranty reserve | $ 37.3 | $ 36.3 | $ 33.8 | $ 33.2 |
Share-based compensation - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 02, 2020 |
May 04, 2019 |
|
Share-based Payment Arrangement [Abstract] | ||
Share-based compensation expense | $ 1.4 | $ 4.0 |
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