Signet(SIG) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter sales were $2.4 billion, down$ 145 million or 5.8% compared to Q4 of FY24, with same store sales declining 1.1%[3] - Operating income for Q4 was $152.6 million, significantly down from$ 416.3 million in Q4 of FY24, impacted by non-cash impairment charges of $200.7 million[4] - Diluted earnings per share (EPS) for Q4 was$ 2.30, compared to $11.75 in Q4 of FY24, with adjusted diluted EPS at$ 6.62, slightly down from $6.73[8] - For Fiscal 2025, total sales were$ 6.7 billion, a decrease of $467.3 million or 6.5% from the previous year, with same store sales down 3.4%[9] - Net income for Fiscal 2025 was$ 61.2 million, a significant decrease from $810.4 million in Fiscal 2024[28] - Total sales for the North America segment decreased by 6.0% year-over-year to$ 6,299.1 million, while the International segment saw a decline of 13.4% to $373.2 million[29] - Operating income for the North America segment dropped to$ 143.6 million (6.5% of segment sales) from $396.0 million (16.8% of segment sales) in the previous year[30] - Adjusted operating income for Fiscal 2025 was$ 355.5 million, down from $409.7 million in Fiscal 2024, representing a decrease in adjusted operating margin from 16.4% to 15.1%[44] - Total adjusted operating income for the fourth quarter of Fiscal 2025 was$ 355.5 million, compared to $409.7 million in the fourth quarter of Fiscal 2024[44] Cash Flow and Dividends - The company generated over$ 400 million in free cash flow, allowing for a nearly 20% reduction in diluted share count by returning approximately $1 billion to shareholders[2] - Free cash flow for Fiscal 2025 was$ 437.9 million, slightly up from $421.4 million in Fiscal 2024[43] - The Board of Directors declared a quarterly cash dividend of$ 0.32 per share, representing a 10% increase[12] Assets and Liabilities - Total assets decreased to $5,726.6 million as of February 1, 2025, from$ 6,813.2 million as of February 3, 2024, a decline of 15.9%[27] - Cash and cash equivalents dropped to $604.0 million from$ 1,378.7 million, a decrease of 56.2% year-over-year[27] - Total current liabilities were $1,831.5 million, down from$ 1,976.0 million, reflecting a decrease of 7.3%[27] - Shareholders' equity decreased to $1,851.8 million from$ 2,166.5 million, a decline of 14.5%[27] Impairments and Expenses - The company reported asset impairments of $202.7 million for the 13 weeks ended February 1, 2025, compared to$ 3.4 million in the prior year[26] - The company recorded asset impairments of $200.7 million for the 13 weeks ended February 1, 2025, compared to$ 3.4 million for the 14 weeks ended February 3, 2024[45] - Income tax expense for the 13 weeks ended February 1, 2025, was $53.5 million, compared to a benefit of$ (199.2) million for the 14 weeks ended February 3, 2024[48] Future Guidance and Plans - Fiscal 2026 guidance anticipates total sales between $6.53 billion and$ 6.80 billion, with same store sales projected to decline between 2.5% and increase by 1.5%[15] - The company plans to transition over 10% of mall locations to off-mall and eCommerce channels over the next three years[2] - A new fully traceable diamond collection is set to launch in Fall 2025, featuring responsibly sourced diamonds from Botswana[18] - Capital expenditures for Fiscal 2026 are planned at approximately $145 million to$ 160 million[19] - The company plans to continue focusing on market expansion and innovation in its product offerings to drive future growth[24] Store Operations - The company operated 2,642 stores as of February 1, 2025, a decrease of 56 stores compared to the previous year[31] - Capital expenditures for Fiscal 2025 were $153.0 million, compared to$ 125.5 million in Fiscal 2024[28] Segment Performance - North America segment adjusted operating income for the 13 weeks ended February 1, 2025, was $346.0 million, compared to$ 403.2 million for the 14 weeks ended February 3, 2024, reflecting a decrease of 14.2%[45] - International segment adjusted operating income for the 13 weeks ended February 1, 2025, was $21.8 million, slightly down from$ 22.2 million for the 14 weeks ended February 3, 2024, indicating a decrease of 1.8%[46] - The North America segment operating income for Fiscal 2025 was $143.6 million, down from$ 173.7 million in Fiscal 2024, a decrease of 17.3%[45] - The International segment operating income for Fiscal 2025 was $1.0 million, compared to$ 13.1 million in Fiscal 2024, reflecting a significant decline of 92.3%[46] Earnings and Margins - Basic earnings per share for the 13 weeks ended February 1, 2025, was $2.32, compared to$ 13.94 for the same period last year, a decrease of 83.4%[26] - Adjusted diluted EPS for the 13 weeks ended February 1, 2025, was $6.62, a decrease from$ 6.73 for the 14 weeks ended February 3, 2024[50] - Adjusted EBITDA for the 13 weeks ended February 1, 2025, was $393.9 million, down from$ 446.5 million for the 14 weeks ended February 3, 2024, representing a decline of 11.7%[51] - The effective tax rate for the 13 weeks ended February 1, 2025, was 34.7%, compared to (46.7)% for the 14 weeks ended February 3, 2024[49]