On March 19, 2025, Signet Jewelers Ltd (SIG, Financial) released its 8-K filing detailing its financial performance for the fourth quarter and fiscal year 2025. The company, a leading retailer of diamond jewelry, operates through segments including North America, International, and Other, with the North America segment contributing the majority of its revenue.
Financial Performance and Challenges
Signet Jewelers Ltd reported fourth-quarter sales of $2.4 billion, a decrease of 5.8% compared to the same period last year. This decline was partly due to the absence of an additional week that was present in the previous fiscal year. Same store sales fell by 1.1%, reflecting challenges in maintaining growth momentum. The company's operating income dropped significantly to $152.6 million from $416.3 million in the prior year, impacted by non-cash impairment charges of $200.7 million related to Digital brands.
The diluted earnings per share (EPS) for the quarter was $2.30, which is below the analyst estimate of $7.02. The adjusted diluted EPS was $6.62, slightly below the $6.73 reported in the fourth quarter of fiscal 2024. These figures highlight the company's struggle to meet market expectations amidst a challenging retail environment.
Strategic Initiatives and Achievements
Despite the challenges, Signet Jewelers Ltd achieved over $400 million in free cash flow, marking the fifth consecutive year of strong cash conversion to adjusted operating income. This financial strength enabled the company to reduce its diluted share count by nearly 20% in fiscal 2025, returning approximately $1 billion to shareholders. The company is focusing on a new strategy called 'Grow Brand Love,' aimed at accelerating growth in self-purchase and gifting categories while expanding its leadership in Bridal.
Our overall Q4 performance and lack of growth over the past several quarters informed our new strategy to grow our business. This transformative strategy is called 'Grow Brand Love' and builds on a strong foundation to create shareholder value," said J.K. Symancyk, Chief Executive Officer.
Income Statement and Key Metrics
For the full fiscal year 2025, Signet reported sales of $6.7 billion, a decline of 6.5% from the previous year. The operating income was $110.7 million, significantly down from $621.5 million in fiscal 2024. The diluted loss per share was $0.81, compared to an EPS of $15.01 last year. On an adjusted basis, the diluted EPS was $8.94, down from $10.37 in the previous year.
Key metrics such as gross margin and adjusted gross margin were $2.6 billion, down from $2.8 billion in fiscal 2024. The company's cash flow from operating activities was $590.9 million, an increase from $546.9 million in the prior year, indicating strong operational cash generation despite revenue challenges.
Balance Sheet and Cash Flow
Signet Jewelers Ltd ended the fiscal year with cash and cash equivalents of $604.0 million, down from $1,378.7 million at the beginning of the period. The company's inventory remained stable at $1.94 billion. Capital expenditures for the year were $153.0 million, reflecting ongoing investments in business operations.
Outlook and Guidance
Looking ahead, Signet Jewelers Ltd has provided guidance for fiscal 2026, anticipating total sales between $6.53 billion and $6.80 billion. The company expects same store sales to range from a decline of 2.5% to an increase of 1.5%. Adjusted operating income is projected to be between $420 million and $510 million, with adjusted diluted EPS expected to range from $7.31 to $9.10.
Signet's strategic focus on optimizing its real estate footprint and enhancing its digital capabilities is expected to drive future growth. The company plans to transition over 10% of mall locations to off-mall and eCommerce channels over the next three years, leveraging its average mall lease term of just over two years.
| Metric | Q4 Fiscal 2025 | Q4 Fiscal 2024 | Fiscal 2025 | Fiscal 2024 |
|---|---|---|---|---|
| Sales | $2,352.6 million | $2,497.6 million | $6,703.8 million | $7,171.1 million |
| Operating Income | $152.6 million | $416.3 million | $110.7 million | $621.5 million |
| Diluted EPS | $2.30 | $11.75 | $(0.81) | $15.01 |
| Adjusted Diluted EPS | $6.62 | $6.73 | $8.94 | $10.37 |
Signet Jewelers Ltd's performance in fiscal 2025 reflects the challenges faced by the retail sector, particularly in the diamond jewelry market. However, the company's strategic initiatives and strong cash flow position it well for future growth and shareholder value creation.
Explore the complete 8-K earnings release (here) from Signet Jewelers Ltd for further details.
