Signet Jewelers Ltd posts Q4 results, announces $350M Cost Out Initiative and $850 mln share buyback

Signet Jewelers Ltd, (SIG) the world's largest retailer of diamond jewelry, recently announced its financial results for the fourth quarter and fiscal year 2024. The company also disclosed a three-year $350 million cost out initiative, a new share repurchase authorization, and guidance for the fiscal year 2025. 

The stock has dipped below critical support at the $100-psyche which also housed the 20- and 50-day moving averages as the company saw some weakness in the consumer. Shares trade at $91 in pre-market and has limited support until it gets to the $81 area. 

Signet Jewelers Ltd reported total sales of $2.5 billion in the fourth quarter of fiscal 2024, a decrease of 6.3% compared to the same period last year. This includes $103.2 million of sales from the Company's 53rd week and approximately $25 million from lost sales contribution from U.K. prestige watch locations that were sold. Same store sales (SSS) decreased by 9.6% compared to the previous year. 

Non-GAAP operating income, on the other hand, was $409.7 million, compared to $404.7 million in Q4 FY23. GAAP diluted earnings per share (EPS) was $11.75, compared to $5.02 in Q4 FY23, primarily due to a $4.94 per share benefit of a deferred tax asset related to the enactment of the Corporate Income Tax Act of 2023 in Bermuda. Non-GAAP diluted EPS was $6.73, up from $5.52 in the same quarter last year. 

In the North American region, total sales for the quarter were $2.4 billion, a decrease of 6.1% compared to the previous year. Same store sales declined by 10.0%, negatively impacted by integration issues at the company's Digital banners, which led to fulfillment issues in the second half of the quarter. 

In the International region, total sales were $141.7 million, a decrease of 7.5% compared to the previous year, reflecting a decrease in total average transaction value (ATV) due to the sale of prestige watch locations. Same store sales declined by 1.0% versus the previous year. 

Signet Jewelers Ltd also announced a three-year $350 million cost out initiative and a share repurchase authorization of $850 million. 

The company forecasts first-quarter fiscal 2025 total sales to be between $1.47 billion and $1.53 billion. For the full fiscal year 2025, the company expects total sales to be between $6.66 billion and $7.02 billion, with diluted EPS of $9.08 to $10.48. 

In conclusion, Signet Jewelers Ltd reported a mixed performance for the fourth quarter and fiscal year 2024, with sales decreasing overall but improvements in operating income and EPS. The company's North American region was impacted by integration issues, while the International region faced challenges due to the sale of prestige watch locations. Signet Jewelers Ltd's new cost out initiative and share repurchase authorization signal the company's commitment to long-term growth, and its guidance for the first quarter and full fiscal year 2025 suggest a promising outlook. As the company continues to navigate the retail landscape, its focus on operational efficiency and strategic initiatives will be key factors in determining its future success.