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Jan 28, 2023
Signet Q4 2023 Earnings Report
Signet's Q4 2023 performance reflected revenue decrease but EPS increase, achieved through strategic initiatives and cost management.
Key Takeaways
Signet Jewelers reported Q4 2023 results with a decrease in total sales by 5.2% to $2.7 billion, but an increase in GAAP diluted EPS to $5.02 and non-GAAP diluted EPS to $5.52. The company's performance was impacted by weather in the US, labor strikes in the UK, and currency headwinds, but benefited from marketing initiatives and strategic transformation. Signet is guiding for $11.07 to $11.59 in non-GAAP diluted EPS in Fiscal 2024.
Total sales decreased by 5.2% to $2.7 billion, but up 23.8% compared to FY20.
GAAP diluted EPS increased to $5.02, and non-GAAP diluted EPS increased to $5.52.
Same store sales decreased by 9.1% compared to last year, but up 16.4% to FY20.
Cash and cash equivalents at year-end were $1.2 billion, down approximately $252 million from Q4 of FY22.
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CapyFin.com Forward Guidance
Signet provided its first quarter and full year Fiscal 2024 guidance on a non-GAAP basis, with total sales expected to be $1.62 billion to $1.65 billion for the first quarter and $7.67 billion to $7.84 billion for the full year. Operating income is projected to be $97 million to $108 million for the first quarter and $765 million to $800 million for the full year, with diluted EPS expected to be $11.07 to $11.59 for the full year.
Positive Outlook
- Annual US Jewelry industry revenues are expected to be down mid-single digits. The Company's guidance contemplates market share gains against this total industry performance range.
- Planned capital investments up to $200 million, reflecting investments in banner differentiation, including stores, Connected Commerce capabilities, and digital and technology advancement.
- The Company expects headwinds to continue in engagements with recovery later in Fiscal 2024, and continue to rebound in Fiscal 2025.
- Signet’s efforts to mitigate supply chain disruption have been effective thus far. Guidance assumes no significant disruptions in availability of inventory.
- Annual tax rate of approximately 19% assumes no discrete items and no changes in current tax laws during Fiscal 2024.
Challenges Ahead
- The Company expects headwinds to continue in engagements with recovery later in Fiscal 2024.
- With the slowing economy and continued inflationary pressures we do not expect to see a rebound in the lower price point consumer in the coming year.
- Signet also anticipates a continued shift of consumer discretionary spending away from the jewelry category reflecting decelerating levels of consumer confidence and pent-up demand for experience-oriented categories.
- Signet expects further impacts of inflation and other macroeconomic factors on consumer spending.
- Earnings per share for Fiscal 2024 excludes the impact of any further share repurchases beyond the approximately 0.3 million shares repurchased in Fiscal 2024 through the date of this release, and includes the dilutive effect of the 8.1 million preferred shares.