Signet Jewelers (SIG) Reports 3.6% Increase in Holiday Comps

Signet Jewelers (NYSE: SIG) announced its sales for the eight weeks ended December 27, 2014 ("Holiday Season") and reaffirmed guidance for the 13 weeks ending January 31, 2015 ("fourth quarter") and the 52 weeks ending January 31, 2015 ("Fiscal 2015").

                              Same Store Sales

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                                 Fiscal 2015 Holiday    Fiscal 2014 Holiday

                                       Season                 Season

                               ---------------------- ----------------------

Sterling Jewelers division             up 2.5%                up 4.9%

Zale division                          up 3.5%                  NA

UK Jewelry division                    up 9.7%                up 5.2%

Signet                                 up 3.6%                up 5.0%

Mark Light, Chief Executive Officer, commented: "Our Company performed well during the holiday period delivering increased same store sales across all divisions driven by the continued successful execution of our product, marketing and omni-channel strategies. This is particularly pleasing given the amount of change we have dealt with during the course of the fiscal year.

"Our UK division led our performance with an outstanding 9.7% comp increase -- its best in 12 years and on top of a very strong comp last year. These results were driven by fresh, trend-right merchandise offerings and strategic collaboration with the Sterling division. We were very pleased with the performance of our Zale division, which began to benefit from our investments and initiatives in merchandising, store team member training, and advertising. In particular, our Vera Wang Love Collection and new TV advertising creative, we believe, were well received by customers. Our Sterling division performed well in a highly promotional environment. We resisted deep promotions and protected profitability which helped enable us to reaffirm Signet's financial guidance. I would like to thank all Signet team members very much for their dedication, hard work, and fine execution of our strategies during the holiday selling period."

Sales change from previous year

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                                    Total

                                    sales

                           Non-same at                             Total

                  Same     store    constant Exchange              sales

Holiday Season    store    sales,   exchange translation  Total    (in

Fiscal 2015       sales(1) net(2)   rate(3)  impact(3)    sales    millions)

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  Kay                 3.4%     2.4%     5.8%          --     5.8%     $714.6

  Jared               1.5%     3.5%     5.0%          --     5.0%     $336.2

  Regional brands   (1.8)%  (11.8)%  (13.6)%          --  (13.6)%      $65.5

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Sterling Jewelers

 division             2.5%     1.7%     4.2%          --     4.2%   $1,116.3

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  Zales Jewelers      3.8%                                            $351.5

  Gordon's

   Jewelers         (2.4)%                                             $26.2

Zale US Jewelry       3.3%                                            $377.7

  Peoples

   Jewellers          7.6%                                             $75.3

  Mappins             0.8%                                             $12.6

Zale Canada

 Jewelry              6.5%                                             $87.9

Zale Jewelry          3.9%                                            $465.6

Piercing Pagoda       0.6%                                             $55.4

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Zale division(4)      3.5%       NA       NA          NA       NA     $521.0

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  H.Samuel            8.1%     0.2%     8.3%      (4.5)%     3.8%     $121.7

  Ernest Jones       11.9%     0.9%    12.8%      (4.7)%     8.1%      $93.4

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UK Jewelry

 division             9.7%     0.5%    10.2%      (4.6)%     5.6%     $215.1

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Other(5)segment         --       NM       NM          --       NM       $2.0

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Signet                3.6%    42.7%    46.3%      (1.0)%    45.3%   $1,854.4

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1. Based on stores opened for at least 12 months.

2. Includes all sales from stores not open for 12 months.

3. Non-GAAP measure.

4. Same store sales presented for Zale Division to provide comparative

 performance measures. Year-over-year results not applicable because Signet

 did not own Zale division in prior year.

5. Includes sales from Signet's diamond sourcing initiative. NM - not

 meaningful.

• In the Sterling Jewelers division, branded bridal and select diamond fashion jewelry collections performed well. These increases were partially offset by softness in the sale of lower-price-point fashion jewelry collections.
• Zale division results were driven primarily by incremental investments in marketing, branded merchandise, and strength in Canada. Diamond collections in bridal and fashion performed particularly well.
• UK Jewelry division sales increased due to growth in diamonds including branded bridal. Other drivers included beads, watches, and the growing popularity of Black Friday-style shopping.

Signet's omni-channel strategy was successful during the holiday season. Ecommerce sales increased 90.9%, and, excluding the Zale division, increased 20.0%. As a percent of Signet's holiday season's total sales, ecommerce increased 160 basis points. Each division delivered higher ecommerce growth and penetration relative to total sales.

Financial Guidance:

Signet reaffirmed its financial guidance announced in its third quarter earnings release on November 25, 2014.

Fourth Quarter Fiscal 2015

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Same store sales                                3.0% to 4.0%

EPS                                             $2.69 to $2.83

Adjustments:

  Purchase accounting adjustments               ($0.17) to ($0.15)

  Transaction costs                             ($0.09) to ($0.07)

Adjusted EPS (EPS less adjustments)             $2.95 to $3.05

Adjusted EPS are expected to be favorably impacted by Zale operations in the fourth quarter Fiscal 2015 by $0.36 to $0.40.

Fiscal 2015

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EPS                                             $4.59 to $4.72

Adjusted EPS                                    $5.51 to $5.61



Effective tax rate                              29.3%

Weighted average common shares outstanding      80.2 million



                                                $230 million to $240 million

Capital expenditures                            (reduced from $240 million

                                                to $250 million)



Net selling square footage growth               45.0% to 47.5%

Adjusted EPS are expected to be favorably impacted by Zale operations in Fiscal 2015 by $0.20 to $0.24.

• The capital expenditures will be driven primarily by new Kay and Jared stores, store remodels, and approximately $55 million directed to the Zale division for information technology infrastructure and stores.
• The net selling square footage growth will be driven by the following projected store count changes:
  • Sterling Jewelers division up 75 to 85 gross, 35 to 45 net
  • UK Jewelry division approximately unchanged
  • Zale division 1,550 to 1,560

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