Signet Jewelers (SIG) raises guidance to reflect strong holiday performance

Signet Jewelers Limited ("Signet") (NYSE: SIG), the world's largest retailer of diamond jewelry, today announced its preliminary sales for the nine weeks ended January 1, 2022 ("Holiday Season").

"Our team delivered record Holiday Season sales with revenue growth of more than 30% and same store sales up over 25%," said Virginia C. Drosos, Chief Executive Officer. "We're driving strong traction on our key initiatives including our differentiated banner value propositions and a step change in Connected Commerce capabilities, allowing us to serve customers whenever and wherever they choose to shop with us. We are confident in our strategy and believe we are building sustainable advantages to continue to outpace growth in the jewelry category, gain share and expand operating margin over time. Our Signet team is highly engaged, and I'm very proud of their agility, innovation and focus on accelerating our strategic initiatives and purpose."

"We are raising guidance to reflect our strong holiday performance," said Joan Hilson, Chief Financial & Strategy Officer. "We delivered operating margin expansion as our strategy drove higher traffic and strong conversion with effective promotion and cost management. Reflecting this strong performance and confidence in our business, today we're announcing a $500 million expansion to the remaining $184 million available under the existing share repurchase program. Within this, we intend to enter into a $250 million accelerated share repurchase agreement after which $434 million would remain under our multi-year program."

Holiday Season Fiscal 2022 Sales HighlightsSignet's preliminary total sales for the Holiday Season were $2.4 billion, up 30.4% to last year. Preliminary same store sales (SSS)1 grew 25.2% year over year and 35.1% on a 2-year basis. eCommerce sales were up $52.1 million year over year and brick and mortar sales were up $499.9 million. The Company's strong Holiday Season sales were broad-based with all banners and merchandise categories up double digits. Increased marketing and labor spend supported consumer shopping behavior, driving traffic earlier in the Holiday Season and ensuring staffing levels met consumers' needs.

Preliminary sales by reporting segment:

North America

• Total revenue was $2.2 billion, up 30.2% to last year and up 33.1% to two years ago.
  • eCommerce sales increased 17.7% to last year and 85.4% to two years ago.
  • Brick and mortar sales increased 33.6% to last year and 24.7% to two years ago.
• SSS1 increased 24.8% to last year and 37.8% to two years ago.
• Transactions rose 8.0% to last year and average transaction value increased 16.3%

(1) Same store sales include physical store sales and eCommerce sales. Diamonds Direct is not included in same store sales.

International

• Total revenue was $144 million, up 30.5% to last year and down 3.6% to two years ago.
  • eCommerce sales decreased 25.8% to last year and increased 43.0% to two years ago.
  • Brick and mortar sales increased 69.7% to last year and decreased 12.4% to two years ago.
• SSS1 increased 31.3% to last year and 6.2% to two years ago.
• Transactions rose 27.2% to last year and average transaction value increased 2.2%.

(1) Same store sales include physical store sales and eCommerce sales.

Fiscal 2022 GuidanceJanuary sales have remained strong in the high single digits, reflecting some shifts due to earlier customer shopping in the quarter. With 10 shopping days remaining in the fourth quarter, the Company believes it will deliver a sequential same store sales acceleration from third to fourth quarter. Specifically, the Company believes it will deliver approximately:

(1) Same store sales include physical stores and eCommerce sales(2) See description of non-GAAP measures below(3) Diamonds Direct is included in total revenue and operating income guidance from the date of acquisition on November 17, 2021. Diamonds Direct is not included in same store sales.

Forecasted non-GAAP operating income provided above excludes expected net charges primarily related to acquisition-related costs, non-recurring litigation charges and transformation plan charges (credits) of approximately $3.2 million and $(0.7) million for the fourth quarter and the full year, respectively. Given the potential impact to the fourth quarter and full year GAAP operating income of certain items related to the Diamonds Direct preliminary purchase price allocation which will be recorded as part of our year-end closing process, Signet cannot provide forecasted GAAP operating income or the probable significance of such items without unreasonable efforts. However, the Company believes there would be no significant impact to non-GAAP guidance related to the impact of these preliminary purchase price allocation adjustments. As such, Signet does not present a reconciliation of forecasted GAAP operating income to corresponding non-GAAP operating income. An appropriate reconciliation will be provided in the Company's fourth quarter earnings release. Please see disclosures within the Safe Harbor Statement for other risk factors.

The above Fiscal 2022 guidance materially reflects the same assumptions as previous guidance provided on December 2nd, 2021.

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