UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended ~~October 31, 2020~~May 1, 2021 or


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

Commission file number 1-32349

SIGNET JEWELERS LIMITED


(Exact name of Registrant as specified in its charter)


Bermuda						Not Applicable
(State or other jurisdiction of incorporation)						(I.R.S. Employer Identification No.)

Clarendon House

2 Church Street

Hamilton HM11

Bermuda

(441) 296 5872

(Address and telephone number including area code of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on which Registered

Common Shares of $0.18 each

SIG

The New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

Common Shares, $0.18 par value, ~~52,338,811~~52,667,090 shares as of ~~November 27, 2020~~June 4, 2021

Table of Contents

SIGNET JEWELERS LIMITED

TABLE OF CONTENTS

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SIGNET JEWELERS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


		13 weeks ended				39 weeks ended						13 weeks ended
(in millions, except per share amounts)	(in millions, except per share amounts)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		Notes	(in millions, except per share amounts)	May 1, 2021		May 2, 2020		Notes
Sales	Sales	$	1,300.3	$	1,187.7	$	3,040.4	$	3,983.8	3	Sales	$	1,688.8	$	852.1	3
Cost of sales	Cost of sales	(863.8)		(818.6)		(2,176.0)		(2,652.2)			Cost of sales	(1,010.4)		(648.3)
Restructuring charges - cost of sales	Restructuring charges - cost of sales	(2.0)		(1.4)		(1.4)		(5.8)		5	Restructuring charges - cost of sales	0		0.4		5
Gross margin	Gross margin	434.5		367.7		863.0		1,325.8			Gross margin	678.4		204.2
Selling, general and administrative expenses	Selling, general and administrative expenses	(389.3)		(398.4)		(1,013.6)		(1,285.0)			Selling, general and administrative expenses	(512.0)		(358.4)
Restructuring charges	Restructuring charges	(3.6)		(9.2)		(45.2)		(59.4)		5	Restructuring charges	0.7		(12.7)		5
Asset impairments		(1.5)		0		(158.1)		(47.7)		13
Other operating income (loss)		(0.4)		0		4.3		1.4
Asset impairments, net											Asset impairments, net	(1.5)		(136.3)		13
Other operating income, net											Other operating income, net	3.1		3.6
Operating income (loss)	Operating income (loss)	39.7		(39.9)		(349.6)		(64.9)		4	Operating income (loss)	168.7		(299.6)		4
Interest expense, net	Interest expense, net	(9.1)		(8.6)		(25.6)		(27.9)			Interest expense, net	(3.9)		(7.1)
Other non-operating income, net	Other non-operating income, net	0		7.0		0.3		7.5			Other non-operating income, net	0.1		0.1
Income (loss) before income taxes	Income (loss) before income taxes	30.6		(41.5)		(374.9)		(85.3)			Income (loss) before income taxes	164.9		(306.6)
Income taxes	Income taxes	(21.3)		6.0		105.4		3.7		10	Income taxes	(26.5)		109.5		10
Net income (loss)	Net income (loss)	$	9.3	$	(35.5)	$	(269.5)	$	(81.6)		Net income (loss)	$	138.4	$	(197.1)
Dividends on redeemable convertible preferred shares	Dividends on redeemable convertible preferred shares	(8.4)		(8.2)		(24.9)		(24.6)		7	Dividends on redeemable convertible preferred shares	(8.6)		(8.2)		7
Net income (loss) attributable to common shareholders	Net income (loss) attributable to common shareholders	$	0.9	$	(43.7)	$	(294.4)	$	(106.2)		Net income (loss) attributable to common shareholders	$	129.8	$	(205.3)

Earnings (loss) per common share:	Earnings (loss) per common share:										Earnings (loss) per common share:
Basic	Basic	$	0.02	$	(0.84)	$	(5.67)	$	(2.05)	8	Basic	$	2.49	$	(3.96)	8
Diluted	Diluted	$	0.02	$	(0.84)	$	(5.67)	$	(2.05)	8	Diluted	$	2.23	$	(3.96)	8
Weighted average common shares outstanding:	Weighted average common shares outstanding:										Weighted average common shares outstanding:
Basic	Basic	52.1		51.8		51.9		51.7		8	Basic	52.1		51.8		8
Diluted	Diluted	53.4		51.8		51.9		51.7		8	Diluted	62.0		51.8		8

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SIGNET JEWELERS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


		13 weeks ended													13 weeks ended
		October 31, 2020						November 2, 2019							May 1, 2021						May 2, 2020
(in millions)	(in millions)	Pre-tax amount		Tax (expense) benefit		After-tax amount		Pre-tax amount		Tax (expense) benefit		After-tax amount		(in millions)	Pre-tax amount		Tax (expense) benefit		After-tax amount		Pre-tax amount		Tax (expense) benefit		After-tax amount
Net income (loss)	Net income (loss)					$	9.3					$	(35.5)	Net income (loss)					$	138.4					$	(197.1)
Other comprehensive income (loss):	Other comprehensive income (loss):													Other comprehensive income (loss):
Foreign currency translation adjustments	Foreign currency translation adjustments	(2.8)		0		(2.8)		19.9		0		19.9		Foreign currency translation adjustments	6.7		0		6.7		(26.7)		0		(26.7)
Available-for-sale securities:	Available-for-sale securities:													Available-for-sale securities:
Unrealized gain (loss)	Unrealized gain (loss)	(0.1)		0		(0.1)		(0.6)		0.2		(0.4)		Unrealized gain (loss)	(0.1)		0		(0.1)		0.3		0		0.3
Reclassification adjustment for (gains) losses to net income		0		0		0		1.0		0		1.0

Cash flow hedges:	Cash flow hedges:													Cash flow hedges:
Unrealized gain (loss)	Unrealized gain (loss)	0		0		0		3.4		(1.0)		2.4		Unrealized gain (loss)	(0.1)		0		(0.1)		0.2		0		0.2
Reclassification adjustment for (gains) losses to net income		(1.8)		(0.1)		(1.9)		(0.5)		0.1		(0.4)
Reclassification adjustment for losses (gains) to net income (loss)														Reclassification adjustment for losses (gains) to net income (loss)	0.2		0		0.2		(10.7)		2.6		(8.1)
Pension plan:	Pension plan:													Pension plan:

Reclassification adjustment to net income for amortization of actuarial (gains) losses		0.1		0		0.1		0.3		0		0.3
Reclassification adjustment to net income for amortization of net prior service credits		0.4		(0.1)		0.3		0		0		0
Reclassification adjustment for amortization of actuarial losses (gains) to net income (loss)														Reclassification adjustment for amortization of actuarial losses (gains) to net income (loss)	0.2		0		0.2		0.1		0		0.1
Reclassification adjustment for amortization of net prior service credits to net income (loss)														Reclassification adjustment for amortization of net prior service credits to net income (loss)	0		0		0		0.2		0		0.2

Total other comprehensive income (loss)	Total other comprehensive income (loss)	$	(4.2)	$	(0.2)	$	(4.4)	$	23.5	$	(0.7)	$	22.8	Total other comprehensive income (loss)	$	6.9	$	0	$	6.9	$	(36.6)	$	2.6	$	(34.0)
Total comprehensive income (loss)	Total comprehensive income (loss)					$	4.9					$	(12.7)	Total comprehensive income (loss)					$	145.3					$	(231.1)

		39 weeks ended
		October 31, 2020						November 2, 2019
(in millions)		Pre-tax amount		Tax (expense) benefit		After-tax amount		Pre-tax amount		Tax (expense) benefit		After-tax amount
Net income (loss)						$	(269.5)					$	(81.6)
Other comprehensive income (loss):
Foreign currency translation adjustments		(11.1)		0		(11.1)		(6.1)		0		(6.1)
Available-for-sale securities:
Unrealized gain (loss)		0.3		0		0.3		(0.3)		0.1		(0.2)
Reclassification adjustment for (gains) losses to net income		0		0		0		1.0		0		1.0
Cash flow hedges:
Unrealized gain (loss)		0.2		0		0.2		11.5		(2.9)		8.6
Reclassification adjustment for (gains) losses to net income		(13.4)		2.6		(10.8)		(1.0)		0.2		(0.8)
Pension plan:

Reclassification adjustment to net income for amortization of actuarial (gains) losses		0.2		0		0.2		0.9		(0.1)		0.8
Reclassification adjustment to net income for amortization of net prior service credits		0.7		(0.1)		0.6		0		0		0

Total other comprehensive income (loss)		$	(23.1)	$	2.5	$	(20.6)	$	6.0	$	(2.7)	$	3.3
Total comprehensive income (loss)						$	(290.1)					$	(78.3)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SIGNET JEWELERS LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in millions, except par value per share amount)	(in millions, except par value per share amount)	October 31, 2020		February 1, 2020		November 2, 2019		Notes	(in millions, except par value per share amount)	May 1, 2021		January 30, 2021		May 2, 2020		Notes
Assets	Assets								Assets
Current assets:	Current assets:								Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,332.6	$	374.5	$	188.6		Cash and cash equivalents	$	1,298.4	$	1,172.5	$	1,066.6
Accounts receivable, net	Accounts receivable, net	58.3		38.8		20.8		11	Accounts receivable, net	78.9		88.7		29.8		11
Other current assets	Other current assets	228.6		403.5		207.2			Other current assets	187.1		236.6		327.7
Income taxes	Income taxes	111.1		6.3		2.7			Income taxes	58.4		51.7		199.2
Inventories, net		2,174.0		2,331.7		2,519.4		12
Inventories									Inventories	2,019.0		2,032.5		2,392.2		12
Total current assets	Total current assets	3,904.6		3,154.8		2,938.7			Total current assets	3,641.8		3,582.0		4,015.5
Non-current assets:	Non-current assets:								Non-current assets:
Property, plant and equipment, net of accumulated depreciation of $1,167.7, $1,064.7 and $1,337.1, respectively		612.6		741.9		751.2
Property, plant and equipment, net of accumulated depreciation and amortization of $1,208.7, $1,198.1 and $1,092.6, respectively									Property, plant and equipment, net of accumulated depreciation and amortization of $1,208.7, $1,198.1 and $1,092.6, respectively	544.5		605.5		687.1
Operating lease right-of-use assets	Operating lease right-of-use assets	1,395.4		1,683.3		1,684.0		14	Operating lease right-of-use assets	1,301.2		1,362.2		1,541.4		14
Goodwill	Goodwill	238.0		248.8		248.8		15	Goodwill	244.9		238.0		238.0		15
Intangible assets, net	Intangible assets, net	178.8		263.8		264.2		15	Intangible assets, net	190.6		179.0		178.7		15
Other assets	Other assets	189.5		201.8		196.4			Other assets	241.0		195.8		204.9
Deferred tax assets	Deferred tax assets	13.6		4.7		18.3			Deferred tax assets	16.8		16.4		12.1
Total assets	Total assets	$	6,532.5	$	6,299.1	$	6,101.6		Total assets	$	6,180.8	$	6,178.9	$	6,877.7
Liabilities, Redeemable convertible preferred shares, and Shareholders’ equity	Liabilities, Redeemable convertible preferred shares, and Shareholders’ equity								Liabilities, Redeemable convertible preferred shares, and Shareholders’ equity
Current liabilities:	Current liabilities:								Current liabilities:
Loans and overdrafts	Loans and overdrafts	$	3.6	$	95.6	$	5.0	18	Loans and overdrafts	$	0	$	0	$	22.2	18
Accounts payable	Accounts payable	558.4		227.9		333.9			Accounts payable	700.1		812.6		329.1
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	500.0		697.0		434.6			Accrued expenses and other current liabilities	517.2		494.1		636.1
Deferred revenue	Deferred revenue	258.5		266.2		267.3		3	Deferred revenue	310.0		288.7		271.2		3
Operating lease liabilities	Operating lease liabilities	379.0		338.2		324.9		14	Operating lease liabilities	345.7		377.3		390.3		14
Income taxes	Income taxes	32.0		27.7		17.4			Income taxes	24.5		26.0		27.8
Total current liabilities	Total current liabilities	1,731.5		1,652.6		1,383.1			Total current liabilities	1,897.5		1,998.7		1,676.7
Non-current liabilities:	Non-current liabilities:								Non-current liabilities:
Long-term debt	Long-term debt	1,036.2		515.9		788.8		18	Long-term debt	146.8		146.7		1,336.0		18
Operating lease liabilities	Operating lease liabilities	1,190.3		1,437.7		1,448.9		14	Operating lease liabilities	1,087.3		1,147.3		1,334.8		14
Other liabilities	Other liabilities	97.3		116.6		120.4			Other liabilities	108.9		111.1		113.3
Deferred revenue	Deferred revenue	764.3		731.5		693.2		3	Deferred revenue	797.7		783.3		719.8		3
Deferred tax liabilities	Deferred tax liabilities	163.1		5.2		0			Deferred tax liabilities	171.1		159.2		95.9
Total liabilities	Total liabilities	4,982.7		4,459.5		4,434.4			Total liabilities	4,209.3		4,346.3		5,276.5
Commitments and contingencies	Commitments and contingencies							21	Commitments and contingencies	0		0		0		21
Series A redeemable convertible preferred shares of $.01 par value: authorized 500 shares, 0.625 shares outstanding (February 1, 2020 and November 2, 2019: 0.625 shares outstanding)		633.9		617.0		616.5		6
Series A redeemable convertible preferred shares of $.01 par value: authorized 500 shares, 0.625 shares outstanding (January 30, 2021 and May 2, 2020: 0.625 shares outstanding)									Series A redeemable convertible preferred shares of $.01 par value: authorized 500 shares, 0.625 shares outstanding (January 30, 2021 and May 2, 2020: 0.625 shares outstanding)	650.9		642.3		617.4		6
Shareholders’ equity:	Shareholders’ equity:								Shareholders’ equity:
Common shares of $.18 par value: authorized 500 shares, 52.3 shares outstanding (February 1, 2020 and November 2, 2019: 52.3 outstanding)		12.6		12.6		12.6
Common shares of $.18 par value: authorized 500 shares, 52.7 shares outstanding (January 30, 2021 and May 2, 2020: 52.3 outstanding)									Common shares of $.18 par value: authorized 500 shares, 52.7 shares outstanding (January 30, 2021 and May 2, 2020: 52.3 outstanding)	12.6		12.6		12.6
Additional paid-in capital	Additional paid-in capital	254.1		245.4		242.3			Additional paid-in capital	252.2		258.8		246.4
Other reserves	Other reserves	0.4		0.4		0.4			Other reserves	0.4		0.4		0.4
Treasury shares at cost: 17.7 shares (February 1, 2020 and November 2, 2019: 17.7 shares)		(980.4)		(984.9)		(984.8)
Treasury shares at cost: 17.3 shares (January 30, 2021 and May 2, 2020: 17.7 shares)									Treasury shares at cost: 17.3 shares (January 30, 2021 and May 2, 2020: 17.7 shares)	(965.2)		(980.2)		(985.2)
Retained earnings	Retained earnings	1,943.6		2,242.9		2,079.7			Retained earnings	2,304.2		2,189.2		2,037.4
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(314.4)		(293.8)		(299.5)		9	Accumulated other comprehensive loss	(283.6)		(290.5)		(327.8)		9
Total shareholders’ equity	Total shareholders’ equity	915.9		1,222.6		1,050.7			Total shareholders’ equity	1,320.6		1,190.3		983.8
Total liabilities, redeemable convertible preferred shares and shareholders’ equity	Total liabilities, redeemable convertible preferred shares and shareholders’ equity	$	6,532.5	$	6,299.1	$	6,101.6		Total liabilities, redeemable convertible preferred shares and shareholders’ equity	$	6,180.8	$	6,178.9	$	6,877.7

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SIGNET JEWELERS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		39 weeks ended					13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		(in millions)	May 1, 2021		May 2, 2020
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income (loss)	Net income (loss)	$	(269.5)	$	(81.6)	Net income (loss)	$	138.4	$	(197.1)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:						Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	Depreciation and amortization	130.3		129.5		Depreciation and amortization	42.1		37.3
Amortization of unfavorable leases and contracts		(4.1)		(4.1)
Amortization of unfavorable contracts						Amortization of unfavorable contracts	(1.4)		(1.4)
Share-based compensation	Share-based compensation	9.6		13.0		Share-based compensation	8.0		1.4
Deferred taxation	Deferred taxation	149.1		(0.4)		Deferred taxation	9.5		83.3
Asset impairments	Asset impairments	158.1		47.7		Asset impairments	1.5		136.3
Restructuring charges	Restructuring charges	13.2		17.9		Restructuring charges	0		6.7
Other non-cash movements	Other non-cash movements	1.7		(9.4)		Other non-cash movements	0.5		0.6
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(19.9)		2.7
Changes in operating assets and liabilities, net of acquisition:						Changes in operating assets and liabilities, net of acquisition:
Decrease in accounts receivable						Decrease in accounts receivable	9.8		8.6
Decrease in other assets and other receivables	Decrease in other assets and other receivables	188.2		4.0		Decrease in other assets and other receivables	44.0		72.4
Decrease (increase) in inventories	Decrease (increase) in inventories	151.1		(133.0)		Decrease (increase) in inventories	19.3		(77.2)
Increase in accounts payable		325.2		183.7
Decrease in accrued expenses and other liabilities		(192.5)		(30.5)
Increase (decrease) in accounts payable						Increase (decrease) in accounts payable	(122.2)		99.0
Increase (decrease) in accrued expenses and other liabilities						Increase (decrease) in accrued expenses and other liabilities	18.0		(40.1)
Change in operating lease assets and liabilities	Change in operating lease assets and liabilities	43.9		(8.0)		Change in operating lease assets and liabilities	(31.2)		61.4
Increase (decrease) in deferred revenue	Increase (decrease) in deferred revenue	25.2		(6.3)		Increase (decrease) in deferred revenue	34.4		(5.0)
Changes in income tax receivable and payable	Changes in income tax receivable and payable	(99.7)		(7.6)		Changes in income tax receivable and payable	(8.4)		(192.7)
Pension plan contributions	Pension plan contributions	(3.2)		(4.1)		Pension plan contributions	(1.2)		(1.1)
Net cash provided by operating activities		606.7		113.5
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	161.1		(7.6)
Investing activities	Investing activities					Investing activities
Purchase of property, plant and equipment	Purchase of property, plant and equipment	(41.1)		(95.3)		Purchase of property, plant and equipment	(11.3)		(7.7)
Purchase of available-for-sale securities	Purchase of available-for-sale securities	0		(11.7)		Purchase of available-for-sale securities	(1.0)		0
Proceeds from sale of available-for-sale securities	Proceeds from sale of available-for-sale securities	3.4		7.1		Proceeds from sale of available-for-sale securities	1.9		1.3
Acquisition of Rocksbox Inc., net of cash acquired						Acquisition of Rocksbox Inc., net of cash acquired	(14.4)		0
Net cash used in investing activities	Net cash used in investing activities	(37.7)		(99.9)		Net cash used in investing activities	(24.8)		(6.4)
Financing activities	Financing activities					Financing activities
Dividends paid on common shares	Dividends paid on common shares	(19.3)		(58.0)		Dividends paid on common shares	0		(19.3)
Dividends paid on redeemable convertible preferred shares	Dividends paid on redeemable convertible preferred shares	(7.8)		(23.4)		Dividends paid on redeemable convertible preferred shares	0		(7.8)

Proceeds from term loans		0		100.0
Repayments of term loans		0		(294.9)
Settlement of senior notes, including third party fees		0		(240.9)

Proceeds from revolving credit facilities	Proceeds from revolving credit facilities	900.0		562.0		Proceeds from revolving credit facilities	0		900.0
Repayments of revolving credit facilities	Repayments of revolving credit facilities	(380.0)		(19.0)		Repayments of revolving credit facilities	0		(80.0)
Payment of debt issuance costs		0		(7.3)

Decrease of bank overdrafts	Decrease of bank overdrafts	(84.2)		(35.0)		Decrease of bank overdrafts	0		(74.0)
Other financing activities	Other financing activities	(13.6)		1.0		Other financing activities	(13.7)		(4.9)
Net cash provided by (used in) financing activities		395.1		(15.5)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(13.7)		714.0
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	374.5		195.4		Cash and cash equivalents at beginning of period	1,172.5		374.5
Increase (decrease) in cash and cash equivalents		964.1		(1.9)
Increase in cash and cash equivalents						Increase in cash and cash equivalents	122.6		700.0
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(6.0)		(4.9)		Effect of exchange rate changes on cash and cash equivalents	3.3		(7.9)
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	1,332.6	$	188.6	Cash and cash equivalents at end of period	$	1,298.4	$	1,066.6

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SIGNET JEWELERS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


(in millions)	(in millions)	Common shares at par value		Additional paid-in capital		Other reserves		Treasury shares		Retained earnings		Accumulated other comprehensive loss		Total shareholders’ equity		(in millions)	Common shares at par value		Additional paid-in capital		Other reserves		Treasury shares		Retained earnings		Accumulated other comprehensive loss		Total shareholders’ equity
Balance at February 1, 2020		$	12.6	$	245.4	$	0.4	$	(984.9)	$	2,242.9	$	(293.8)	$	1,222.6
Balance at January 30, 2021																Balance at January 30, 2021	$	12.6	$	258.8	$	0.4	$	(980.2)	$	2,189.2	$	(290.5)	$	1,190.3

Net income (loss)	Net income (loss)	—		—		—		—		(197.1)		—		(197.1)		Net income (loss)	—		—		—		—		138.4		—		138.4
Other comprehensive income (loss)	Other comprehensive income (loss)	—		—		—		—		—		(34.0)		(34.0)		Other comprehensive income (loss)	—		—		—		—		—		6.9		6.9
Dividends declared:	Dividends declared:															Dividends declared:

Preferred shares, $12.50/share		—		—		—		—		(8.2)		—		(8.2)
Preferred shares, $13.14/share																Preferred shares, $13.14/share	—		—		—		—		(8.6)		—		(8.6)

Net settlement of equity-based awards	Net settlement of equity-based awards	—		(0.4)		—		(0.3)		(0.2)		—		(0.9)		Net settlement of equity-based awards	—		(14.6)		—		15.0		(14.8)		—		(14.4)
Share-based compensation expense	Share-based compensation expense	—		1.4		—		—		—		—		1.4		Share-based compensation expense	—		8.0		—		—		—		—		8.0
Balance at May 2, 2020		$	12.6	$	246.4	$	0.4	$	(985.2)	$	2,037.4	$	(327.8)	$	983.8

Net income (loss)		—		—		—		—		(81.7)		—		(81.7)
Other comprehensive income (loss)		—		—		—		—		—		17.8		17.8
Dividends declared:

Preferred shares, $12.66/share		—		—		—		—		(8.3)		—		(8.3)
Balance at May 1, 2021																Balance at May 1, 2021	$	12.6	$	252.2	$	0.4	$	(965.2)	$	2,304.2	$	(283.6)	$	1,320.6

Net settlement of equity based awards		—		(0.5)		—		4.1		(3.7)		—		(0.1)

Share-based compensation expense		—		4.9		—		—		—		—		4.9
Balance at August 1, 2020		$	12.6	$	250.8	$	0.4	$	(981.1)	$	1,943.7	$	(310.0)	$	916.4

Net income (loss)		—		—		—		—		9.3		—		9.3
Other comprehensive income (loss)		—		—		—		—		—		(4.4)		(4.4)
Dividends declared:

Preferred shares, $12.81/share		—		—		—		—		(8.4)		—		(8.4)

Net settlement of equity based awards		—		0		—		0.7		(1.0)		—		(0.3)

Share-based compensation expense		—		3.3		—		—		—		—		3.3
Balance at October 31, 2020		$	12.6	$	254.1	$	0.4	$	(980.4)	$	1,943.6	$	(314.4)	$	915.9


(in millions)	(in millions)	Common shares at par value		Additional paid-in capital		Other reserves		Treasury shares		Retained earnings		Accumulated other comprehensive loss		Total shareholders’ equity		(in millions)	Common shares at par value		Additional paid-in capital		Other reserves		Treasury shares		Retained earnings		Accumulated other comprehensive loss		Total shareholders’ equity
Balance at February 2, 2019		$	12.6	$	236.5	$	0.4	$	(1,027.3)	$	2,282.2	$	(302.8)	$	1,201.6
Balance at February 1, 2020																Balance at February 1, 2020	$	12.6	$	245.4	$	0.4	$	(984.9)	$	2,242.9	$	(293.8)	$	1,222.6

Net income (loss)	Net income (loss)	—		—		—		—		(10.0)		—		(10.0)		Net income (loss)	—		—		—		—		(197.1)		—		(197.1)
Other comprehensive income (loss)	Other comprehensive income (loss)	—		—		—		—		—		(5.1)		(5.1)		Other comprehensive income (loss)	—		—		—		—		—		(34.0)		(34.0)
Dividends declared:	Dividends declared:															Dividends declared:
Common shares, $0.37/share		—		—		—		—		(19.3)		—		(19.3)

Preferred shares, $12.50/share	Preferred shares, $12.50/share	—		—		—		—		(8.2)		—		(8.2)		Preferred shares, $12.50/share	—		—		—		—		(8.2)		—		(8.2)

Net settlement of equity-based awards	Net settlement of equity-based awards	—		(7.8)		—		27.5		(21.3)		—		(1.6)		Net settlement of equity-based awards	—		(0.4)		—		(0.3)		(0.2)		—		(0.9)

Share-based compensation expense	Share-based compensation expense	—		4.0		—		—		—		—		4.0		Share-based compensation expense	—		1.4		—		—		—		—		1.4
Balance at May 4, 2019		$	12.6	$	232.7	$	0.4	$	(999.8)	$	2,223.4	$	(307.9)	$	1,161.4

Net income (loss)		—		—		—		—		(36.1)		—		(36.1)
Other comprehensive income (loss)		—		—		—		—		—		(14.4)		(14.4)
Dividends declared:
Common shares, $0.37/share		—		—		—		—		(19.3)		—		(19.3)
Preferred shares, $12.50/share		—		—		—		—		(8.2)		—		(8.2)

Net settlement of equity based awards		—		(0.7)		—		6.8		(5.6)		—		0.5

Share-based compensation expense		—		4.3		—		—		—		—		4.3
Balance at August 3, 2019		$	12.6	$	236.3	$	0.4	$	(993.0)	$	2,154.2	$	(322.3)	$	1,088.2

Net income (loss)		—		—		—		—		(35.5)		—		(35.5)
Other comprehensive income (loss)		—		—		—		—		—		22.8		22.8
Dividends declared:
Common shares, $0.37/share		—		—		—		—		(19.4)		—		(19.4)
Preferred shares, $12.50/share		—		—		—		—		(8.2)		—		(8.2)
Balance at May 2, 2020																Balance at May 2, 2020	$	12.6	$	246.4	$	0.4	$	(985.2)	$	2,037.4	$	(327.8)	$	983.8

Net settlement of equity based awards		—		1.3		—		8.2		(11.4)		—		(1.9)

Share-based compensation expense		—		4.7		—		—		—		—		4.7
Balance at November 2, 2019		$	12.6	$	242.3	$	0.4	$	(984.8)	$	2,079.7	$	(299.5)	$	1,050.7

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SIGNET JEWELERS LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and principal accounting policies

Signet Jewelers Limited (“Signet” or the “Company”), a holding company incorporated in Bermuda, is the world’s largest retailer of diamond jewelry. The Company operates through its 100% owned subsidiaries with sales primarily in the United States (“US”), United Kingdom (“UK”) and Canada. Signet manages its business as 3 reportable segments: North America, International, and Other. The “Other” reportable segment consists of subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones. See Note 4 for additional discussion of the Company’s segments.

Signet’s business is seasonal, with the fourth quarter historically accounting for approximately 35-40% of annual sales as well as accounts for a substantial portion of the annual operating profit. The “Holiday Season” consists of results for the months of November and December, with December being the highest volume month of the year.

The Company has evaluated ~~and determined that there were no~~ additional events or transactions subsequent to ~~October 31, 2020~~May 1, 2021 for potential recognition or disclosure through the date the condensed consolidated interim financial statements were ~~issued.~~issued, and except as discussed in Note 22, there were no such events or transactions noted.

Risks and Uncertainties - COVID-19

In December 2019, a novel coronavirus (“COVID-19”) was identified in Wuhan, China. ~~In March 2020,~~During Fiscal 2021, the ~~World Health Organization declared COVID-19 a global pandemic as a result~~Company experienced significant disruption to its business, specifically in its retail store operations through temporary closures during the first half of the further spread of the virus into all regions of the world, including those regions where the Company’s primary operations occur in North America and the UK. COVID-19 has significantly impacted consumer traffic and the Company’s retail sales, based on the perceived public health risk and government-imposed quarantines and restrictions of public gatherings and commercial activity to contain spread of the virus.

Effective March 23, 2020, the Company temporarily closed all of its stores in North America, its diamond operations in New York and its support centers in the US. Additionally, effective March 24, 2020, the Company temporarily closed all of its stores in the UK. The COVID-19 pandemic has also disrupted the Company’s global supply chain, including the temporary closure of the Company’s diamond polishing operations in Botswana, and may cause additional disruptions to operations if employees of the Company become sick, are quarantined, or are otherwise limited in their ability to work at Company locations or travel for business. The Company continued to fill e-commerce orders during the temporary closure period of all stores. Beginning in the second quarter, the Company began a measured approach to re-opening its stores, and byyear. By the end of the third quarter of Fiscal 2021, the Company had re-opened substantially all of its stores. AtHowever, during the ~~beginning~~fourth quarter of ~~November 2020,~~Fiscal 2021, both the UK and certain Canadian provinces re-established mandated temporary closure of non-essential ~~businesses, which is currently expected~~businesses. The UK stores began to reopen in April 2021, while certain Canadian stores continue ~~for four weeks until early December 2020.~~

~~In addition, as a result of~~to be impacted by these government restrictions through the uncertainty surrounding the impacts of COVID-19, beginning in March 2020, there was a significant decline in all major domestic and global financial market indicators. The Company’s share price and market capitalization significantly declined during the first half of Fiscal 2021 and while there has been substantial recovery, the sustainabilitydate of this ~~recovery is still unpredictable in light of the current economic conditions and risks to the retail markets from COVID-19.~~report.

The full extent and duration of the impact of COVID-19 on the Company’s operations and financial performance is currently unknown and depends on future developments that are uncertain and unpredictable, including the duration and possible resurgence of the COVID-19 pandemic, the success of the vaccine rollout globally, its impact on ~~capital and financial markets on a macro-scale~~the Company’s global supply chain (specifically in India), and the ~~actions~~uncertainty of customer behavior and potential shifts in discretionary spending as the economy continues to ~~contain~~reopen in the ~~virus or mitigate its impact, among others. While~~second half of the ~~full extent of~~year. The Company will continue to evaluate the impact of the COVID-19 ~~is currently unknown, it had a significant impact~~pandemic on ~~Signet’s~~its business, results of operations and cash flows ~~during the first half of~~throughout Fiscal 2021. However, management currently believes that it has adequate liquidity and business plans to continue to operate the business and mitigate the risks associated with COVID-19 for the 12 months following the date of this report.

~~As a result of~~2022, including the potential ~~risks identified related to COVID-19~~impacts on ~~its~~various estimates and assumptions inherent in the preparation of the condensed consolidated financial statements, the Company considered and performed the following assessments during Fiscal 2021: impairment assessments for goodwill, indefinite-lived intangible assets and store level long-lived assets (including property and equipment and operating lease right-of-use assets); assessment of rent concessions, including deferrals or other lease modifications; assessment of the effectiveness of certain foreign currency and commodity derivative financial instruments; assessment of the realizability of the Company’s deferred tax assets; and assessment of the impacts of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted on March 27, 2020.statements.

Basis of preparation

The condensed consolidated financial statements of Signet are prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US generally accepted accounting principles (“US GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for

~~Table of Contents~~

the interim periods. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in Signet’s Annual Report on Form 10-K for the fiscal year ended ~~February 1, 2020~~January 30, 2021 filed with the SEC on March ~~26, 2020.~~19, 2021.

Use of estimates

The preparation of these condensed consolidated financial statements, in conformity with US GAAP and SEC regulations for interim reporting, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and as a result of the above noted risks associated with COVID-19, it is reasonably possible that those estimates will change in the near term and the effect could be material. Estimates and assumptions are primarily made in relation to the valuation of accounts receivables, inventories, deferred revenue, derivatives, employee benefits, income taxes, contingencies, leases, asset impairments for goodwill, indefinite-lived intangible and long-lived assets and the depreciation and amortization of long-lived assets.

Fiscal year

The Company’s fiscal year ends on the Saturday nearest to January 31st. Fiscal ~~2021~~2022 and Fiscal ~~2020~~2021 refer to the 52 week periods ending January 29, 2022 and January 30, 2021, ~~and February 1, 2020,~~ respectively. Within these condensed consolidated financial statements, the ~~third~~first quarter of the relevant fiscal years ~~2021~~2022 and ~~2020~~2021 refer to the 13 weeks ended ~~October 31,~~May 1, 2021 and May 2, 2020, ~~and November 2, 2019,~~ respectively.

Table of Contents

Foreign currency translation

The financial position and operating results of certain foreign operations, including certain subsidiaries operating in the UK as part of the International segment and Canada as part of the North America segment, are consolidated using the local currency as the functional currency. Assets and liabilities are translated at the rates of exchange on the balance sheet date, and revenues and expenses are translated at the monthly average rates of exchange during the period. Resulting translation gains or losses are included in the accompanying condensed consolidated statements of shareholders’ equity as a component of accumulated other comprehensive income (loss) (“AOCI”). Gains or losses resulting from foreign currency transactions are included in other operating income, net within the condensed consolidated statements of operations.

See Note 9 for additional information regarding the Company’s foreign currency translation.

Acquisition of Rocksbox

~~Table~~On March 29, 2021, the Company acquired all of ~~Contents~~the outstanding shares of Rocksbox Inc. (“Rocksbox”), a jewelry rental subscription business, for cash consideration of $14.4 million, net of cash acquired. The acquisition was driven by Signet's "Inspiring Brilliance" strategy and its initiatives to accelerate growth in its services offerings. Based on a preliminary purchase price allocation, net assets acquired primarily consist of goodwill and intangible assets (see Note 15 for details). In connection with closing the acquisition, the Company incurred approximately $1.1 million of acquisition-related costs for professional services in the 13 weeks ended May 1, 2021, which were recorded as selling, general and administrative expenses in the condensed consolidated statement of operations.

The results of Rocksbox subsequent to the acquisition date are reported as a component of the North America segment. See Note 4 for additional information regarding the Company’s segments. Pro forma results of operations have not been presented, as the impact on the Company’s condensed consolidated financial results was not material.

2. New accounting pronouncements

The following section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company.

New accounting pronouncements recently adopted

~~The following ASU’s~~There were no new accounting pronouncements adopted as of ~~February 2, 2020. The impact on the Company's consolidated financial statements is described within the table below.~~


~~Standard~~						~~Description~~
ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, issued July 2018.						Aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of this ASU did notJanuary 31, 2021 that have a material impact on the Company’s financial position or results of operations.
ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, issued August 2018.						Modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans and clarifies the disclosure requirements regarding projected benefit obligations and accumulated benefit obligations. The ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted. The new guidance does not affect the existing recognition or measurement guidance, and therefore had no impact on the Company’s financial condition or results of operations.
~~ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, issued August 2018.~~						Modifies the disclosure requirements on fair value measurements in Topic 820 and eliminates ‘at a minimum’ from the phrase ‘an entity shall disclose at a minimum’ to promote the appropriate exercise of discretion by entities when considering fair value disclosures and to clarify that materiality is an appropriate consideration. The adoption of this ASU did not have a material impact on the Company’s financial position or results of operations.
~~ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued June 2016.~~						Requires entities to measure and recognize expected credit losses for financial assets measured at amortized cost basis. The estimate of expected credit losses should consider historical information, current information, and reasonable and supportable forecasts of expected losses over the remaining contractual life that affect collectability. The adoption of this ASU did not have a material impact on the Company’s financial position or results of operations upon adoption; however, this ASU impacts the accounting for expected credit losses on the Company’s non-prime customer in-house finance receivables (as discussed in Note 11).

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is intended to reduce complexity in the accounting for income taxes while maintaining or improving the usefulness of information provided to financial statement users. The guidance amends certain existing provisions under ASC 740 to address a number of distinct items. This standard is effective for public companies in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. The Company has elected to early adopt this ASU effective August 2, 2020 on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s financial position or results of operations upon adoption.

New accounting pronouncements issued but not yet adopted

There are no new accounting pronouncements issued that are expected to be applicable to the Company in future periods.

~~Table of Contents~~

3. Revenue recognition

The following tables provide the Company’s revenue, disaggregated by banner, major product and channel, for the 13 ~~and 39~~ weeks ended ~~October 31, 2020~~May 1, 2021 and ~~November~~May 2, ~~2019:~~2020:


		13 weeks ended October 31, 2020								13 weeks ended November 2, 2019									13 weeks ended May 1, 2021								13 weeks ended May 2, 2020
(in millions)	(in millions)	North America		International		Other		Consolidated		North America		International		Other		Consolidated		(in millions)	North America		International		Other		Consolidated		North America		International		Other		Consolidated
Sales by banner:	Sales by banner:																	Sales by banner:
Kay	Kay	$	490.5	$	0	$	0	$	490.5	$	469.5	$	0	$	0	$	469.5	Kay	$	676.8	$	0	$	0	$	676.8	$	333.5	$	0	$	0	$	333.5
Zales	Zales	251.4		0		0		251.4		223.0		0		0		223.0		Zales	370.8		0		0		370.8		182.3		0		0		182.3
Jared	Jared	232.7		0		0		232.7		211.3		0		0		211.3		Jared	284.1		0		0		284.1		145.4		0		0		145.4
Piercing Pagoda	Piercing Pagoda	93.7		0		0		93.7		68.3		0		0		68.3		Piercing Pagoda	148.8		0		0		148.8		51.4		0		0		51.4
James Allen	James Allen	76.6		0		0		76.6		60.8		0		0		60.8		James Allen	101.5		0		0		101.5		43.8		0		0		43.8
Peoples	Peoples	37.8		0		0		37.8		37.8		0		0		37.8		Peoples	34.6		0		0		34.6		24.7		0		0		24.7
International segment		0		106.9		0		106.9		0		106.4		0		106.4
Other(1)		0		0		10.7		10.7		0		0		10.6		10.6
International segment banners																		International segment banners	0		57.4		0		57.4		0		64.9		0		64.9
Other																		Other	1.4		0		13.4		14.8		0		0		6.1		6.1
Total sales	Total sales	$	1,182.7	$	106.9	$	10.7	$	1,300.3	$	1,070.7	$	106.4	$	10.6	$	1,187.7	Total sales	$	1,618.0	$	57.4	$	13.4	$	1,688.8	$	781.1	$	64.9	$	6.1	$	852.1

		39 weeks ended October 31, 2020								39 weeks ended November 2, 2019
(in millions)		North America		International		Other		Consolidated		North America		International		Other		Consolidated
Sales by banner:
Kay		$	1,149.0	$	0	$	0	$	1,149.0	$	1,581.3	$	0	$	0	$	1,581.3
Zales		618.8		0		0		618.8		791.5		0		0		791.5
Jared		546.6		0		0		546.6		720.9		0		0		720.9
Piercing Pagoda		204.4		0		0		204.4		225.1		0		0		225.1
James Allen		184.7		0		0		184.7		166.4		0		0		166.4
Peoples		83.3		0		0		83.3		126.8		0		0		126.8
International segment		0		232.8		0		232.8		0		331.8		0		331.8
Other(1)		0		0		20.8		20.8		0		0		40.0		40.0
Total sales		$	2,786.8	$	232.8	$	20.8	$	3,040.4	$	3,612.0	$	331.8	$	40.0	$	3,983.8

~~(1)~~ ~~Includes sales from Signet’s diamond sourcing initiative.~~

119

Table of Contents


		13 weeks ended October 31, 2020								13 weeks ended November 2, 2019									13 weeks ended May 1, 2021								13 weeks ended May 2, 2020
(in millions)	(in millions)	North America		International		Other		Consolidated		North America		International		Other		Consolidated		(in millions)	North America		International		Other		Consolidated		North America		International		Other		Consolidated
Sales by product:	Sales by product:																	Sales by product:
Bridal	Bridal	$	564.5	$	48.0	$	0	$	612.5	$	499.3	$	43.9	$	0	$	543.2	Bridal	$	726.7	$	28.8	$	0	$	755.5	$	314.1	$	28.1	$	0	$	342.2
Fashion	Fashion	400.7		19.5		0		420.2		342.4		21.3		0		363.7		Fashion	661.4		9.7		0		671.1		297.9		12.6		0		310.5
Watches	Watches	33.6		33.4		0		67.0		41.2		35.5		0		76.7		Watches	46.9		17.2		0		64.1		24.6		17.5		0		42.1
Other(1)	Other(1)	183.9		6.0		10.7		200.6		187.8		5.7		10.6		204.1		Other (1)	183.0		1.7		13.4		198.1		144.5		6.7		6.1		157.3
Total sales	Total sales	$	1,182.7	$	106.9	$	10.7	$	1,300.3	$	1,070.7	$	106.4	$	10.6	$	1,187.7	Total sales	$	1,618.0	$	57.4	$	13.4	$	1,688.8	$	781.1	$	64.9	$	6.1	$	852.1

		39 weeks ended October 31, 2020								39 weeks ended November 2, 2019
(in millions)		North America		International		Other		Consolidated		North America		International		Other		Consolidated
Sales by product:
Bridal		$	1,295.7	$	104.9	$	0	$	1,400.6	$	1,654.3	$	139.8	$	0	$	1,794.1
Fashion		993.1		44.8		0		1,037.9		1,245.2		64.9		0		1,310.1
Watches		81.9		73.3		0		155.2		142.4		108.8		0		251.2
Other(1)		416.1		9.8		20.8		446.7		570.1		18.3		40.0		628.4
Total sales		$	2,786.8	$	232.8	$	20.8	$	3,040.4	$	3,612.0	$	331.8	$	40.0	$	3,983.8

(1) Other revenue primarily includes gift, beads and other miscellaneous jewelry sales, repairs, subscriptions, service plan and other miscellaneous non-jewelry sales.


		13 weeks ended October 31, 2020								13 weeks ended November 2, 2019									13 weeks ended May 1, 2021								13 weeks ended May 2, 2020
(in millions)	(in millions)	North America		International		Other		Consolidated		North America		International		Other		Consolidated		(in millions)	North America		International		Other		Consolidated		North America		International		Other		Consolidated
Sales by channel:	Sales by channel:																	Sales by channel:
Store	Store	$	963.7	$	87.1	$	0	$	1,050.8	$	943.9	$	93.9	$	0	$	1,037.8	Store	$	1,299.6	$	29.5	$	0	$	1,329.1	$	631.9	$	49.4	$	0	$	681.3
E-commerce	E-commerce	219.0		19.8		0		238.8		126.8		12.5		0		139.3		E-commerce	318.4		27.9		0		346.3		149.2		15.5		0		164.7
Other ~~(1)~~	Other ~~(1)~~	0		0		10.7		10.7		0		0		10.6		10.6		Other ~~(1)~~	0		0		13.4		13.4		0		0		6.1		6.1
Total sales	Total sales	$	1,182.7	$	106.9	$	10.7	$	1,300.3	$	1,070.7	$	106.4	$	10.6	$	1,187.7	Total sales	$	1,618.0	$	57.4	$	13.4	$	1,688.8	$	781.1	$	64.9	$	6.1	$	852.1

		39 weeks ended October 31, 2020								39 weeks ended November 2, 2019
(in millions)		North America		International		Other		Consolidated		North America		International		Other		Consolidated
Sales by channel:
Store		$	2,170.2	$	175.8	$	0	$	2,346.0	$	3,198.4	$	294.9	$	0	$	3,493.3
E-commerce		616.6		57.0		0		673.6		413.6		36.9		0		450.5
Other (1)		0		0		20.8		20.8		0		0		40.0		40.0
Total sales		$	2,786.8	$	232.8	$	20.8	$	3,040.4	$	3,612.0	$	331.8	$	40.0	$	3,983.8

~~(1)~~ ~~Includes sales from Signet’s diamond sourcing initiative.~~

The Company recognizes revenues when control of the promised goods and services are transferred to customers, in an amount that reflects the consideration expected to be received in exchange for those goods. Transfer of control generally occurs at the time merchandise is taken from a store, or upon receipt of the merchandise by a customer for an e-commerce shipment. The Company excludes all taxes assessed by government authorities and collected from a customer from its reported sales. The Company’s revenue streams and their respective accounting treatments are further discussed below.

~~Table of Contents~~

Merchandise sales and repairs

Store sales are recognized when the customer receives and pays for the merchandise at the store with cash, in-house customer finance, private label credit card programs, a third-party credit card or a lease purchase option. For online sales shipped to customers, sales are recognized at the estimated time the customer has received the merchandise. Amounts related to shipping and handling that are billed to customers are reflected in sales and the related costs are reflected in cost of sales. Revenues on the sale of merchandise are reported net of anticipated returns and sales tax collected. Returns are estimated based on previous return rates experienced. Any deposits received from a customer for merchandise are deferred and recognized as revenue when the customer receives the merchandise. Revenues derived from providing replacement merchandise on behalf of insurance organizations are recognized upon receipt of the merchandise by the customer. Revenues on repair of merchandise are recognized when the service is complete and the customer collects the merchandise at the store.

Extended service plans and lifetime warranty agreements (“ESP”)

The Company recognizes revenue related to ESP sales in proportion to when the expected costs will be incurred. The deferral period for ESP sales is determined from patterns of claims costs, including estimates of future claims costs expected to be incurred. Management reviews the trends in claims to assess whether changes are required to the revenue and cost recognition rates utilized. A significant change in estimates related to the time period or pattern in which warranty-related costs are expected to be incurred could materially impact revenues. All direct costs associated with the sale of these plans are deferred and amortized in proportion to the revenue recognized and disclosed as either other current assets or other assets in the condensed consolidated balance sheets. These direct costs primarily include sales commissions and credit card fees. Amortization of deferred ESP selling costs ~~related to the Company’s warranty programs~~ is included within selling, general and administrative expenses in the condensed consolidated statements of operations. Amortization of deferred ESP selling costs was ~~$8.5~~$9.9 million and ~~$16.0~~$4.3 million during the 13 ~~and 39~~ weeks ended ~~October 31,~~May 1, 2021 and May 2, 2020, ~~respectively, and $8.4 million and $25.8 million during the 13 and 39 weeks ended November 2, 2019,~~ respectively.

Unamortized deferred selling costs as of ~~October 31,~~May 1, 2021, January 30, 2021 and May 2, 2020 ~~February 1, 2020 and November 2, 2019~~ were as follows:


(in millions)	(in millions)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	May 1, 2021		January 30, 2021		May 2, 2020
Other current assets	Other current assets	$	24.0	$	23.6	$	23.5	Other current assets	$	26.4	$	26.2	$	23.6
Other assets	Other assets	81.7		80.0		76.1		Other assets	86.1		85.1		79.5
Total deferred selling costs	Total deferred selling costs	$	105.7	$	103.6	$	99.6	Total deferred selling costs	$	112.5	$	111.3	$	103.1

Table of Contents

The North America segment sells ESP, subject to certain conditions, to perform repair work over the life of the product. Customers generally pay for ESP at the store at the time of merchandise sale. Revenue from the sale of the lifetime ESP is recognized consistent with the estimated pattern of claim costs expected to be incurred by the Company in connection with performing under the ESP obligations. Lifetime ESP revenue is deferred and recognized over a maximum period of 17 years after the sale of the warranty contract. Although claims experience varies between the Company’s national banners, thereby resulting in different recognition rates, approximately 55% of revenue is recognized within the first two years on a weighted average basis.

The North America segment also sells a Jewelry Replacement Plan (“JRP”). The JRP is designed to protect customers from damage or defects of purchased merchandise for a period of three years. If the purchased merchandise is defective or becomes damaged under normal use in that time period, the item will be replaced. JRP revenue is deferred and recognized on a straight-line basis over the period of expected claims costs.

Signet also sells warranty agreements in the capacity of an agent on behalf of a third-party. The commission that Signet receives from the third-party is recognized at the time of sale less an estimate of cancellations based on historical experience.

~~Sale vouchers~~

Certain promotional offers award sale vouchers to customers who make purchases above a certain value, which grant a fixed discount on a future purchase within a stated time frame. The Company accounts for such vouchers by allocating the fair value of the voucher between the initial purchase and the future purchase using the relative-selling-price method. Sale vouchers are not sold on a stand-alone basis. The fair value of the voucher is determined based on the average sales transactions in which the vouchers were issued, when the vouchers are expected to be redeemed and the estimated voucher redemption rate. The fair value allocated to the future purchase is recorded as deferred revenue.

Consignment inventory sales

Sales of consignment inventory are accounted for on a gross sales ~~basis. The~~basis as the Company maintains control of the merchandise through the point of sale and provides independent advice, guidance and after-sales services to customers. Supplier products are selected at the discretion of the Company, and the Company is responsible for determining the selling price and for physical security of the products. The products sold from consignment inventory are ~~indistinguishable from~~similar in nature to other products that are sold to customers and are sold on the same terms. ~~Supplier products are selected at the discretion of the Company. The Company is responsible for determining the selling price and physical security of the products.~~

~~Table of Contents~~

Deferred revenue

Deferred revenue ~~is comprised~~consists primarily of ESP and voucher promotions as follows:


(in millions)	(in millions)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	May 1, 2021		January 30, 2021		May 2, 2020
ESP deferred revenue	ESP deferred revenue	$	983.2	$	960.0	$	919.5	ESP deferred revenue	$	1,049.4	$	1,028.9	$	961.0
Voucher promotions and other		39.6		37.7		41.0
Other deferred revenue (1)								Other deferred revenue (1)	58.3		43.1		30.0
Total deferred revenue	Total deferred revenue	$	1,022.8	$	997.7	$	960.5	Total deferred revenue	$	1,107.7	$	1,072.0	$	991.0

Disclosed as:	Disclosed as:							Disclosed as:
Current liabilities	Current liabilities	$	258.5	$	266.2	$	267.3	Current liabilities	$	310.0	$	288.7	$	271.2
Non-current liabilities	Non-current liabilities	764.3		731.5		693.2		Non-current liabilities	797.7		783.3		719.8
Total deferred revenue	Total deferred revenue	$	1,022.8	$	997.7	$	960.5	Total deferred revenue	$	1,107.7	$	1,072.0	$	991.0

13 weeks ended 39 weeks ended
(in millions) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
ESP deferred revenue, beginning of period $ 990.5 $ 930.2 $ 960.0 $ 927.6
Plans sold(1)
83.8 78.0 193.2 264.5
Revenue recognized(2)
(91.1) (88.7) (170.0) (272.6)
ESP deferred revenue, end of period $ 983.2 $ 919.5 $ 983.2 $ 919.5
(1) Other deferred revenue includes primarily revenue collected from customers for custom orders and eCommerce orders, for which control has not yet transferred to the customer.


	13 weeks ended
(in millions)	May 1, 2021		May 2, 2020
ESP deferred revenue, beginning of period	$	1,028.9	$	960.0
Plans sold (1)	124.1		55.0
Revenue recognized (2)	(103.6)		(54.0)
ESP deferred revenue, end of period	$	1,049.4	$	961.0

(1) Includes impact of foreign exchange translation.

(2) During the 13 ~~and 39~~ weeks ended ~~October 31,~~May 1, 2021 and May 2, 2020, the Company recognized sales of ~~$61.6~~$72.6 million and ~~$115.8~~$44.5 million, respectively, related to deferred revenue that existed at ~~February 1, 2020~~the beginning of the period in respect to ESP. ~~Additionally,~~In Fiscal 2021, no ESP revenue was recognized beginning on March 23, 2020 due to the temporary closure of the Company’s stores and service centers as a result of COVID-19. As the Company began reopening stores and service centers during the second quarter of Fiscal 2021, the Company resumed recognizing service revenue as it fulfilled its performance obligations under the ESP.

4. Segment information

Financial information for each of Signet’s reportable segments is presented in the tables below. Signet’s chief operating decision maker utilizes segment sales and operating income, after the elimination of any inter-segment transactions, to determine resource allocations and performance assessment measures. Signet manages its business as 3 reportable segments: North America, International, and Other. Signet’s sales are derived from the retailing of jewelry, watches, other products and services as generated through the management of its reportable segments. The Company allocates certain support center costs between operating segments, and the remainder of the unallocated costs are included with the corporate and unallocated expenses presented. ~~In addition, beginning in Fiscal 2021, the Company allocates restructuring costs (further described in Note 5) to the operating segment where these charges were incurred, and the presentation~~

Table of ~~such costs has been reflected consistently in all periods presented.~~Contents

The North America reportable segment operates across the US and Canada. Its US stores operate nationally in malls and off-mall locations principally as Kay (Kay Jewelers and Kay Jewelers Outlet), Zales (Zales Jewelers and Zales Outlet), Jared (Jared The Galleria Of Jewelry and Jared Vault), James Allen, Rocksbox and Piercing Pagoda, which operates through mall-based kiosks. Its Canadian stores operate as the Peoples Jewellers store banner. ~~The segment also operates a variety of mall-based regional banners.~~

The International reportable segment operates stores in the UK, Republic of Ireland and Channel Islands. Its stores operate in shopping malls and off-mall locations (i.e. high street) principally as H.Samuel and Ernest Jones.

The Other reportable segment consists of subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones.

~~Table of Contents~~


		13 weeks ended				39 weeks ended					13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(in millions)	May 1, 2021		May 2, 2020
Sales:	Sales:									Sales:
North America segment	North America segment	$	1,182.7	$	1,070.7	$	2,786.8	$	3,612.0	North America segment	$	1,618.0	$	781.1
International segment	International segment	106.9		106.4		232.8		331.8		International segment	57.4		64.9
Other segment	Other segment	10.7		10.6		20.8		40.0		Other segment	13.4		6.1
Total sales	Total sales	$	1,300.3	$	1,187.7	$	3,040.4	$	3,983.8	Total sales	$	1,688.8	$	852.1

Operating income (loss):	Operating income (loss):									Operating income (loss):
North America segment (1)	North America segment (1)	$	52.9	$	(10.7)	$	(238.3)	$	29.4	North America segment (1)	$	212.0	$	(234.2)
International segment (2)	International segment (2)	1.6		(5.9)		(52.6)		(16.5)		International segment (2)	(19.7)		(38.6)
Other segment ~~(3)~~	Other segment ~~(3)~~	1.3		(1.5)		0.8		(14.4)		Other segment ~~(3)~~	(0.9)		(0.3)
Corporate and unallocated expenses ~~(4)~~(3)	Corporate and unallocated expenses ~~(4)~~(3)	(16.1)		(21.8)		(59.5)		(63.4)		Corporate and unallocated expenses ~~(4)~~(3)	(22.7)		(26.5)
Total operating income (loss)	Total operating income (loss)	39.7		(39.9)		(349.6)		(64.9)		Total operating income (loss)	168.7		(299.6)
Interest expense		(9.1)		(8.6)		(25.6)		(27.9)
Interest expense, net										Interest expense, net	(3.9)		(7.1)
Other non-operating income, net	Other non-operating income, net	0		7.0		0.3		7.5		Other non-operating income, net	0.1		0.1
Income (loss) before income taxes	Income (loss) before income taxes	$	30.6	$	(41.5)	$	(374.9)	$	(85.3)	Income (loss) before income taxes	$	164.9	$	(306.6)

(1) Operating income (loss) during the 13 ~~and 39~~ weeks ended ~~October 31,~~May 1, 2021 includes: $1.1 million of acquisition-related expenses in connection with the Rocksbox acquisition; $0.7 million credit to restructuring expense, primarily related to adjustments to previously recognized restructuring liabilities; and $1.5 million of net asset impairments. See Note 5 and Note 13 for additional information.

Operating income (loss) during the 13 weeks ended May 2, 2020 includes a $~~2.2~~0.4 million ~~and~~ ~~$1.6~~benefit recognized due to a change in inventory reserves previously recognized as part of the Company’s restructuring activities; charges of $8.9 million ~~charge, respectively,~~ primarily related to ~~inventory charges~~severance and professional services recorded in conjunction with the Company’s restructuring ~~activities. Additionally, operating income (loss) during the 13~~activities; and ~~39 weeks ended October 31, 2020 includes charges of~~ ~~$0.7 million~~ ~~and~~ ~~$37.3 million, respectively, primarily related to severance, professional fees and store closure costs recorded in conjunction with the Company’s restructuring activities.~~ ~~Operating income (loss) during the 13 and 39 weeks ended October 31, 2020 also includes~~ asset impairment charges of ~~$1.5 million and $136.9 million, respectively.~~ Operating income (loss) during the 39 weeks ended November 2, 2019 includes a $47.7 million out-of-period goodwill adjustment. In addition, operating income (loss) during the 13 and 39 weeks ended November 2, 2019 includes $1.4 million and $2.6 million, respectively, related to inventory charges recorded in conjunction with the Company’s restructuring activities. Operating income (loss) during the 13 and 39 weeks ended November 2, 2019 includes $5.5 million and $37.7 million, respectively, primarily related to severance, professional fees and store closure costs recorded in conjunction with the Company’s restructuring activities.$117.9 million. See Note 5, Note 13, and Note 15 for additional information.

(2) Operating income (loss) during the 13 ~~and 39~~ weeks ended ~~October 31,~~May 2, 2020 includes charges of ~~$3.0~~$3.6 million ~~and~~ ~~$7.6 million, respectively,~~ primarily related to severance and ~~store closure costs~~professional services recorded in conjunction with the Company’s restructuring ~~activities.~~ ~~Additionally, operating income (loss) during the 39 weeks ended October 31, 2020 includes~~activities; and asset impairment charges of ~~$21.2~~$18.4 million. Operating income (loss) during the 13 and 39 weeks ended November 2, 2019 includes $0.8 million and $2.4 million, respectively, primarily related to severance, professional fees and store closure costs recorded in conjunction with the Company’s restructuring activities. See Note 5, Note 13, and Note 15 for additional information.

(3) Operating income (loss) during the 13 ~~and 39~~ weeks ended ~~October 31,~~May 2, 2020 includes a ~~$0.2 million~~ ~~and~~ ~~$0.2 million~~ ~~benefit, respectively, recognized due to a change in inventory reserves previously recognized as part of the Company’s restructuring activities. Operating income (loss) during the~~ ~~39 weeks ended~~ ~~November 2, 2019 includes charges of~~ ~~$3.2 million~~ ~~related to inventory charges recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information.~~

~~(4)~~ ~~Operating income (loss) during the~~ ~~39 weeks ended~~ ~~October 31, 2020 includes a net~~ charge of $~~7.5~~8.5 million related to the settlement of previously disclosed shareholder litigation ~~matters, inclusive of expected insurance proceeds. Operating income (loss) during the 13~~matters; and ~~39 weeks ended October 31, 2020 includes a credit~~charges of $~~0.1~~0.2 million ~~and net charge of~~ ~~$0.3 million, respectively,~~ primarily related to severance and professional services ~~recorded in conjunction with the Company’s restructuring activities. Operating income (loss) during the 13 and 39 weeks ended November 2, 2019 include charges of~~ ~~$2.9 million~~ ~~and~~ ~~$19.3 million, respectively, related to charges~~ recorded in conjunction with the Company’s restructuring activities. See Note 5 and Note 21 for additional information.

5. Restructuring Plans

Signet Path to Brilliance Plan

During the first quarter of Fiscal 2019, Signet launched a three-year comprehensive transformation plan, the “Signet Path to Brilliance” plan (the “Plan”), to reposition the Company to be a share-gaining, OmniChannel jewelry category leader. ~~The Plan was originally expected~~Restructuring activities related to result in pre-tax charges in the range of $200 million - $220 million over the duration of the plan of which $105 million - $115 million were expected to be cash charges. To date the Company has incurred charges of $252 million under the Plan ~~including $124~~were substantially completed in Fiscal 2021. The Company recorded credits to restructuring expense of $0.7 million ~~in non-cash charges, which have exceeded~~during the ~~original estimates of the~~13 weeks ended May 1, 2021 primarily related to adjustments to previously recognized Plan based primarily on certain accelerated actions during Fiscal 2021, specifically as it relates to the optimization of its real estate footprint and the right-sizing of staffing at its stores and support centers. The remaining costs expected to be incurred under the Plan are $8 million - $12 million, of which $7 million - $10 million are expected to be cash charges.liabilities.

Restructuring charges and other Plan related costs of $5.6 million and $46.6 million were recognized in the 13 and 39 weeks ended October 31, 2020, respectively, primarily related to store closure costs (including non-cash accelerated depreciation on property and equipment), severance costs and professional fees for legal and consulting services.

~~Table of Contents~~

~~Restructuring charges and other Plan related~~Plan-related costs are classified in the condensed consolidated statements of operations as follows:

13 weeks ended 39 weeks ended
(in millions) Statement of operations caption October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Inventory charges Restructuring charges - cost of sales $ 2.0 $ 1.4 $ 1.4 $ 5.8
Other Plan related expenses Restructuring charges 3.6 9.2 45.2 59.4
Total Signet Path to Brilliance Plan expenses $ 5.6 $ 10.6 $ 46.6 $ 65.2


		13 weeks ended
(in millions)	Statement of operations caption	May 1, 2021		May 2, 2020
Inventory charges	Restructuring charges - cost of sales	$	0	$	(0.4)
Other Plan related expenses	Restructuring charges	(0.7)		12.7
Total Signet Path to Brilliance Plan expenses		$	(0.7)	$	12.3

Table of Contents

The composition of the restructuring charges the Company incurred during the 13 ~~and 39~~ weeks ended ~~October 31, 2020,~~May 1, 2021, as well as the cumulative amount incurred under the Plan through ~~October 31, 2020,~~May 1, 2021, were as follows:


		13 weeks ended		39 weeks ended		Cumulative amount			13 weeks ended		Cumulative amount
(in millions)	(in millions)	October 31, 2020		October 31, 2020		October 31, 2020		(in millions)	May 1, 2021		May 1, 2021
Inventory charges	Inventory charges	$	2.0	$	1.4	$	72.8	Inventory charges	$	0	$	72.8
Termination benefits	Termination benefits	2.3		25.4		51.2		Termination benefits	(0.7)		49.2
Store closure and other costs	Store closure and other costs	1.3		19.8		127.6		Store closure and other costs	0		129.9
Total Signet Path to Brilliance Plan expenses	Total Signet Path to Brilliance Plan expenses	$	5.6	$	46.6	$	251.6	Total Signet Path to Brilliance Plan expenses	$	(0.7)	$	251.9

Plan liabilities of $7.1 million were recorded within accrued expenses and other current liabilities and Plan liabilities of $1.7 million were recorded within other liabilities in the condensed consolidated balance sheet as of May 1, 2021. The remaining Plan liabilities consist primarily of severance, store closure liabilities and professional fees. The following table summarizes the activity related to the Plan liabilities for Fiscal ~~2021:~~2022:

(in millions) Termination benefits Store closure and other costs Consolidated
Balance at February 1, 2020 $ 2.0 $ 10.4 $ 12.4
Payments and other adjustments (19.2) (24.6) (43.8)
Charged to expense 25.4 21.2 46.6
Balance at October 31, 2020 $ 8.2 $ 7.0 $ 15.2


(in millions)	Termination benefits		Store closure and other costs		Consolidated
Balance at January 30, 2021	$	2.1	$	8.1	$	10.2
Payments and other adjustments	(0.6)		(0.1)		(0.7)
Charged (credited) to expense	(0.7)		0		(0.7)
Balance at May 1, 2021	$	0.8	$	8.0	$	8.8

6. Redeemable preferred shares

On October 5, 2016, the Company issued 625,000 shares of Series A Redeemable Convertible Preference Shares (“Preferred Shares”) to certain affiliates of Leonard Green & Partners, L.P., for an aggregate purchase price of $625.0 million, or $1,000 per share (the “Stated Value”) pursuant to the investment agreement dated August 24, 2016. Preferred shareholders are entitled to a cumulative dividend at the rate of 5% per annum, payable quarterly in arrears either in cash or by increasing the stated value of the Preferred Shares. The Company declared the Preferred Share dividend during the ~~first, second and third~~fourth quarter of Fiscal 2021 payable “in-kind” by increasing the Stated Value of the Preferred Shares. The Stated Value of the Preferred Shares increased by ~~$12.66~~$12.97 per share during the ~~third~~first quarter of Fiscal ~~2021, and increased by $12.81 per share subsequent to the end of the third quarter of Fiscal 2021,~~2022 when this dividend was paid, all of which will become payable upon liquidation of the Preferred Shares. The Company has declared the first quarter Fiscal 2022 Preferred Share dividend (payable during the second quarter of Fiscal 2022) payable in cash. Refer to Note 7 for additional discussion of the Company’s dividends on Preferred Shares.


(in millions, except conversion rate and conversion price)	(in millions, except conversion rate and conversion price)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions, except conversion rate and conversion price)	May 1, 2021		January 30, 2021		May 2, 2020
Conversion rate	Conversion rate	12.2297		12.2297		12.0578		Conversion rate	12.2297		12.2297		12.2297
Conversion price	Conversion price	$	81.7682	$	81.7682	$	82.9339	Conversion price	$	81.7682	$	81.7682	$	81.7682
Potential impact of preferred shares if-converted to common shares	Potential impact of preferred shares if-converted to common shares	7.8		7.6		7.5		Potential impact of preferred shares if-converted to common shares	8.0		7.9		7.6
Liquidation preference(1)	Liquidation preference(1)	$	648.7	$	632.8	$	632.8	Liquidation preference(1)	$	665.0	$	656.8	$	632.8

(1) Includes the stated value of the Preferred Shares plus any declared but unpaid dividends

In connection with the issuance of the Preferred Shares, the Company incurred direct and incremental expenses of $13.7 million. These direct and incremental expenses originally reduced the Preferred Shares carrying value and will be accreted through retained earnings as a deemed dividend from the date of issuance through the first possible known redemption date in November 2024. Accumulated accretion recorded in the condensed consolidated balance sheets was ~~$6.9~~$7.7 million as of ~~October 31, 2020 (February~~May 1, ~~2020~~2021 (January 30, 2021 and ~~November~~May 2, ~~2019: $5.7~~2020: $7.3 million and ~~$5.2~~$6.1 million, respectively).

Accretion of $0.4 ~~million and $1.2~~ million was recorded to Preferred Shares in the condensed consolidated balance sheets during the 13 ~~and 39~~ weeks ended ~~October 31, 2020, respectively~~May 1, 2021 ($0.4 ~~million and $1.2~~ million for the 13 ~~and 39~~ weeks ended ~~November~~May 2, ~~2019, respectively)~~2020).

~~Table of Contents~~

7. Shareholders’ equity

Dividends on Common Shares

As a result of COVID-19, Signet’s Board of Directors ~~has~~ elected to temporarily suspend the dividend program on common shares, ~~and has elected to pay the quarterly dividend declared on its Preferred Shares “in-kind” for~~effective in the first ~~three quarters~~quarter of Fiscal 2021.

~~Dividends on common shares~~

~~Dividends declared on common shares during the 39 weeks ended October 31, 2020 and November 2, 2019 were as follows:~~

Fiscal 2021 Fiscal 2020
(in millions, except per share amounts) Cash dividend per share Total
dividends Cash dividend
per share Total
dividends
First quarter $ 0.00 $ 0 $ 0.37 $ 19.3
Second quarter 0.00 0 0.37 19.3
Third quarter (1)
0.00 0 0.37 19.4
Total $ 0.00 $ 0 $ 1.11 $ 58.0

~~(1)~~ ~~Signet’s dividend policy for common shares results in the dividend payment date being a quarter in arrears from the declaration date. As a result, as~~Table of November 2, 2019, $19.4 million, was recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets reflecting the cash dividends on common shares declared for the third quarter of Fiscal 2020.Contents

Dividends on Preferred Shares

Dividends declared on the Preferred Shares during the 3913 weeks ended ~~October 31,~~May 1, 2021 and May 2, 2020 ~~and November 2, 2019~~ were as follows:

Fiscal 2021 Fiscal 2020
(in millions, except per share amounts) Dividends
per share Total dividends Dividends
per share Total dividends
First quarter $ 12.50 $ 7.8 $ 12.50 $ 7.8
Second quarter 12.66 7.9 12.50 7.8
Third quarter (1)
12.81 8.0 12.50 7.8
Total $ 37.97 $ 23.7 $ 37.50 $ 23.4


	Fiscal 2022				Fiscal 2021
(in millions, except per share amounts)	Dividends per share		Total dividends		Dividends per share		Total dividends
First quarter (1)	$	13.14	$	8.2	$	12.50	$	7.8

(1) Signet’s Preferred Shares dividends result in the dividend payment date being a quarter in arrears from the declaration date. As a result, as of ~~October 31,~~May 1, 2021 and May 2, 2020, ~~and November 2, 2019, $8.0~~$8.2 million and $7.8 million, respectively, has been recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets reflecting the dividends on the Preferred Shares declared for the ~~third~~first quarter of Fiscal ~~2021~~2022 and Fiscal ~~2020,~~2021, respectively. ~~As disclosed in Note 6, the first, second and third quarter Fiscal 2021 dividends were paid “in-kind”.~~

There were no cumulative undeclared dividends on the Preferred Shares that reduced net income (loss) attributable to common shareholders during the 13 ~~and 39~~ weeks ended ~~October 31, 2020~~May 1, 2021 or ~~November~~May 2, ~~2019.~~2020. See Note 6 for additional discussion of the Company’s Preferred Shares.

Share repurchases

There were no share repurchases executed during the 3913 weeks ended ~~October 31, 2020~~May 1, 2021 and ~~November~~May 2, ~~2019.~~2020. The 2017 Program had $165.6 million remaining as of ~~October 31, 2020.~~May 1, 2021.

8. Earnings (loss) per common share (“EPS”)

Basic EPS is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period. The computation of basic EPS is outlined in the table below:

13 weeks ended 39 weeks ended
(in millions, except per share amounts) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Numerator:
Net income (loss) attributable to common shareholders $ 0.9 $ (43.7) $ (294.4) $ (106.2)
Denominator:
Weighted average common shares outstanding 52.1 51.8 51.9 51.7
EPS – basic $ 0.02 $ (0.84) $ (5.67) $ (2.05)

~~Table of Contents~~


	13 weeks ended
(in millions, except per share amounts)	May 1, 2021		May 2, 2020
Numerator:
Net income (loss) attributable to common shareholders	$	129.8	$	(205.3)
Denominator:
Weighted average common shares outstanding	52.1		51.8
EPS – basic	$	2.49	$	(3.96)

The dilutive effect of share awards represents the potential impact of outstanding awards issued under the Company’s share-based compensation plans, including restricted shares, restricted stock units and stock options issued under the Omnibus Plan and stock options issued under the Share Saving Plans. The dilutive effect of Preferred Shares represents the potential impact for common shares that would be issued upon conversion. Potential common share dilution related to share awards and Preferred Shares is determined using the treasury stock and if-converted methods, respectively. Under the if-converted method, the Preferred Shares are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted EPS calculation for the entire period being presented, only in the periods in which such effect is dilutive. Additionally, in periods in which Preferred Shares are dilutive, cumulative dividends and accretion for issuance costs associated with the Preferred Shares are added back to net income (loss) attributable to common shareholders. See Note 6 for additional discussion of the Company’s Preferred Shares.

The computation of diluted EPS is outlined in the table below:


		13 weeks ended				39 weeks ended					13 weeks ended
(in millions, except per share amounts)	(in millions, except per share amounts)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(in millions, except per share amounts)	May 1, 2021		May 2, 2020
Numerator:	Numerator:									Numerator:
Net income (loss) attributable to common shareholders	Net income (loss) attributable to common shareholders	$	0.9	$	(43.7)	$	(294.4)	$	(106.2)	Net income (loss) attributable to common shareholders	$	129.8	$	(205.3)

Add: Dividends on Preferred Shares										Add: Dividends on Preferred Shares	8.6		0
Numerator for diluted EPS	Numerator for diluted EPS	$	0.9	$	(43.7)	$	(294.4)	$	(106.2)	Numerator for diluted EPS	$	138.4	$	(205.3)
Denominator:	Denominator:									Denominator:
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	52.1		51.8		51.9		51.7		Basic weighted average common shares outstanding	52.1		51.8
Plus: Dilutive effect of share awards	Plus: Dilutive effect of share awards	1.3		0		0		0		Plus: Dilutive effect of share awards	1.9		0

Plus: Dilutive effect of Preferred Shares										Plus: Dilutive effect of Preferred Shares	8.0		0
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	53.4		51.8		51.9		51.7		Diluted weighted average common shares outstanding	62.0		51.8
EPS – diluted	EPS – diluted	$	0.02	$	(0.84)	$	(5.67)	$	(2.05)	EPS – diluted	$	2.23	$	(3.96)

The calculation of diluted EPS excludes the following items for each respective period on the basis that their effect would be anti-dilutive:

13 weeks ended 39 weeks ended
(in millions) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Share awards 0.7 1.3 1.6 1.3
Potential impact of preferred shares 7.8 7.4 7.7 7.2
Total anti-dilutive shares 8.5 8.7 9.3 8.5


	13 weeks ended
(in millions)	May 1, 2021	May 2, 2020
Share awards	0	1.0
Potential impact of Preferred Shares	0	7.6
Total anti-dilutive shares	0	8.6

9. Accumulated other comprehensive income (loss)

The following tables present the changes in AOCI by component and the reclassifications out of AOCI, net of tax:


								Pension plan													Pension plan
(in millions)	(in millions)	Foreign currency translation		Gains (losses) on available-for-sale securities, net		Gains (losses) on cash flow hedges		Actuarial gains (losses)		Prior service credits (costs)		Accumulated other comprehensive income (loss)		(in millions)	Foreign currency translation		Gains (losses) on available-for-sale securities, net		Gains (losses) on cash flow hedges		Actuarial gains (losses)		Prior service credits (costs)		Accumulated other comprehensive income (loss)
Balance at February 1, 2020		$	(250.1)	$	0.3	$	12.5	$	(52.4)	$	(4.1)	$	(293.8)
Balance at January 30, 2021														Balance at January 30, 2021	$	(238.9)	$	0.5	$	(0.9)	$	(47.2)	$	(4.0)	$	(290.5)
Other comprehensive income (loss) (“OCI”) before reclassifications	Other comprehensive income (loss) (“OCI”) before reclassifications	(11.1)		0.3		0.2		0		0		(10.6)		Other comprehensive income (loss) (“OCI”) before reclassifications	6.7		(0.1)		(0.1)		0		0		6.5
Amounts reclassified from AOCI to net income	Amounts reclassified from AOCI to net income	0		0		(10.8)		0.2		0.6		(10.0)		Amounts reclassified from AOCI to net income	0		0		0.2		0.2		0		0.4

Net current period OCI	Net current period OCI	(11.1)		0.3		(10.6)		0.2		0.6		(20.6)		Net current period OCI	6.7		(0.1)		0.1		0.2		0		6.9
Balance at October 31, 2020		$	(261.2)	$	0.6	$	1.9	$	(52.2)	$	(3.5)	$	(314.4)
Balance at May 1, 2021														Balance at May 1, 2021	$	(232.2)	$	0.4	$	(0.8)	$	(47.0)	$	(4.0)	$	(283.6)

~~Table of Contents~~

The amounts reclassified from AOCI were as follows:


		Amounts reclassified from AOCI										Amounts reclassified from AOCI
		13 weeks ended				39 weeks ended						13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		Statement of operations caption	(in millions)	May 1, 2021		May 2, 2020		Statement of operations caption
Losses (gains) on cash flow hedges:	Losses (gains) on cash flow hedges:										Losses (gains) on cash flow hedges:
Foreign currency contracts	Foreign currency contracts	$	0	$	(0.3)	$	0	$	(0.9)	Cost of sales (see Note 16)	Foreign currency contracts	$	0.1	$	0	Cost of sales (see Note 16)
Interest rate swaps		0		0		0		(0.6)		Interest expense, net (see Note 16)

Commodity contracts	Commodity contracts	(1.8)		(0.2)		(3.5)		0.5		Cost of sales (see Note 16)	Commodity contracts	0.1		(0.8)		Cost of sales (see Note 16)
Total before income tax	Total before income tax	(1.8)		(0.5)		(3.5)		(1.0)			Total before income tax	0.2		(0.8)
Losses (gains) on dedesignating cash flow hedges:
Losses (gains) on de-designating cash flow hedges:											Losses (gains) on de-designating cash flow hedges:
Foreign currency contracts	Foreign currency contracts	0		0		(0.6)		0		Other operating income (loss) (see Note 16)	Foreign currency contracts	0		(0.6)		Other operating income, net (see Note 16)
Commodity contracts	Commodity contracts	0		0		(9.3)		0		Other operating income (loss) (see Note 16)	Commodity contracts	0		(9.3)		Other operating income, net (see Note 16)
Total before income tax	Total before income tax	0		0		(9.9)		0			Total before income tax	0		(9.9)
Income taxes	Income taxes	(0.1)		0.1		2.6		0.2			Income taxes	0		2.6
Net of tax	Net of tax	(1.9)		(0.4)		(10.8)		(0.8)			Net of tax	0.2		(8.1)

Defined benefit pension plan items:	Defined benefit pension plan items:										Defined benefit pension plan items:
Amortization of unrecognized actuarial losses	Amortization of unrecognized actuarial losses	0.1		0.2		0.2		0.8		Other non-operating income, net	Amortization of unrecognized actuarial losses	0.2		0.1		Other non-operating income, net
Amortization of unrecognized net prior service credits	Amortization of unrecognized net prior service credits	0.4		0.1		0.7		0.1		Other non-operating income, net	Amortization of unrecognized net prior service credits	0		0.2		Other non-operating income, net

Total before income tax	Total before income tax	0.5		0.3		0.9		0.9			Total before income tax	0.2		0.3
Income taxes	Income taxes	(0.1)		0		(0.1)		(0.1)			Income taxes	0		0
Net of tax	Net of tax	0.4		0.3		0.8		0.8			Net of tax	0.2		0.3

Available-for-sale securities items:
Corporate equity securities, before income tax		0		1.0		0		1.0		Other operating income (loss) (see Note 16)

Income taxes		0		0		0		0
Net of tax		0		1.0		0		1.0

Total reclassifications, net of tax	Total reclassifications, net of tax	$	(1.5)	$	0.9	$	(10.0)	$	1.0		Total reclassifications, net of tax	$	0.4	$	(7.8)

Table of Contents

10. Income taxes


		39 weeks ended					13 weeks ended
		October 31, 2020		November 2, 2019			May 1, 2021		May 2, 2020
Estimated annual effective tax rate before discrete items	Estimated annual effective tax rate before discrete items	19.5	%	13.6	%	Estimated annual effective tax rate before discrete items	18.6	%	24.5	%
Discrete items recognized	Discrete items recognized	8.6	%	(9.3)	%	Discrete items recognized	(2.5)	%	11.2	%
Effective tax rate recognized in statement of operations	Effective tax rate recognized in statement of operations	28.1	%	4.3	%	Effective tax rate recognized in statement of operations	16.1	%	35.7	%

During the 3913 weeks ended ~~October 31, 2020,~~May 1, 2021, the Company’s effective tax rate was lower than the US federal income tax rate primarily due to the favorable impact of foreign rate differences and benefits from global reinsurance arrangements. The Company’s effective tax rate for the same period during the prior year was higher than the US federal income tax rate primarily due to the ~~anticipated benefit~~benefits from the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) ~~enacted on March 27, 2020,~~ recognized as a discrete ~~items~~item during the ~~39 weeks ended October 31, 2020,~~first quarter of Fiscal 2021, partially offset by the unfavorable impact of a valuation allowance recorded against certain US and state deferred tax assets and the impairment of goodwill which was not deductible for tax purposes. The Company’s effective tax rate for the same period during the prior year was lower than the US federal income tax rate primarily due to the unfavorable impact of impairment of goodwill which was not deductible for tax purposes.

~~Table of Contents~~

The CARES Act ~~provides~~provided a technical correction to the Tax Cuts and Jobs Act (“TCJA”) allowing fiscal year tax filers with federal net operating losses arising in the 2017/2018 tax year to be carried back two years to tax years that had higher enacted tax rates resulting in a tax benefit of ~~$73.8 million.~~$67.5 million recognized as a discrete item during the first quarter of Fiscal 2021. The CARES Act also ~~provides~~provided for net operating losses incurred in Fiscal 2021 to be carried back five years to tax years with higher enacted tax rates resulting in an anticipated tax benefit as of ~~$23.5~~the first quarter of Fiscal 2021 of $48.5 million. In addition, during the first quarter of Fiscal 2021, based on weighing all positive and negative evidence, management determined it was more likely than not that it would not be able to realize certain US and state deferred tax assets primarily related to state deferred tax assets including state net operating losses and recorded a valuation allowance of ~~$66.9~~$56.7 million. The estimated annual effective tax rate excludes the effects of any discrete items that may be recognized in future periods.

As of ~~October 31, 2020,~~May 1, 2021, there has been no material change in the amounts of unrecognized tax benefits, or the related accrued interest and penalties (where appropriate), in respect of uncertain tax positions identified and recorded as of ~~February 1, 2020.~~January 30, 2021.

11. Accounts receivable, net

The following table presents the components of Signet’s accounts receivable:


(in millions)	(in millions)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	May 1, 2021		January 30, 2021		May 2, 2020
Customer in-house finance receivables, net	Customer in-house finance receivables, net	$	39.6	$	0	$	0	Customer in-house finance receivables, net	$	61.5	$	72.0	$	0
Accounts receivable, trade	Accounts receivable, trade	13.2		34.4		16.4		Accounts receivable, trade	9.5		11.6		27.8
Accounts receivable, held for sale	Accounts receivable, held for sale	5.5		4.4		4.4		Accounts receivable, held for sale	7.9		5.1		2.0
Accounts receivable, net	Accounts receivable, net	$	58.3	$	38.8	$	20.8	Accounts receivable, net	$	78.9	$	88.7	$	29.8

As previously disclosed, during Fiscal 2018, Signet announced a strategic initiative to outsource its North America private label credit card programs and sell the existing in-house finance receivables. In October 2017, Signet, through its subsidiary Sterling Jewelers Inc. (“Sterling”), completed the sale of the prime-only credit quality portion of Sterling’s in-house finance receivable portfolio to Comenity Bank (“Comenity”). The Company had previously entered into an agreement with Comenity to provide credit services to its Zales banners for all credit card customers (prime and non-prime), and this pre-existing Zales arrangement with Comenity was unaffected by the execution of the Sterling agreement. In May 2021, both the Sterling and Zales agreements with Comenity were amended and restated as further described in Note 22.

In June 2018, the Company completed the sale of the non-prime in-house accounts receivable to CarVal Investors (“CarVal”) and the appointed minority party, Castlelake, L.P. (“Castlelake” and collectively with CarVal, the “Investors”).

In addition, for a five-year term, Signet would remain the issuer of non-prime credit with investment funds managed by the Investors purchasing forward receivables at a discount rate determined in accordance with their respective agreements. Signet would hold the newly issued non-prime credit receivables on its balance sheet for two business days prior to selling the receivables to the respective counterparty in accordance with the agreements. Receivables issued by the Company but pending transfer to the Investors as of period end were classified as “held for sale” and included in the accounts receivable caption in the condensed consolidated balance sheets. As of ~~October 31,~~May 1, 2021, January 30, 2021, and May 2, 2020, ~~February 1, 2020, and November 2, 2019,~~ the accounts receivable held for sale were recorded at fair value.

In conjunction with the sale of the majority of Signet’s non-prime in-house accounts receivable to the Investors, beginning in June 2018, the Investors began purchasing the majority of forward flow receivables of Signet’s non-prime credit from Signet for a five-year term. In Fiscal 2020, those forward flow receivables represented approximately 7% of Signet’s revenue. During Fiscal 2021, the 2018 agreements pertaining to the purchase of forward flow receivables were terminated and new agreements were executed with ~~both~~the Investors which, ~~will remain~~as noted below, are effective until June ~~2021, unless terminated earlier by either party pursuant to the terms of respective agreements. The~~30, 2021. Those new agreements provide that the Investors will continue to purchase add-on non-prime receivables created on existing customer accounts at a discount rate determined in accordance with the new agreements. As a result of the above agreements, Signet ~~will retain~~began retaining all forward flow non-prime

Table of Contents

receivables created for new customers ~~which are expected to represent less than 2.5%~~beginning in the second quarter of ~~Signet’s~~ Fiscal ~~2021 revenue.~~2021. The termination of the previous agreements ~~has~~had no effect on the receivables that were previously sold to the Investors prior to the termination, except that Signet agreed to extend the Investors’ payment obligation for the remaining 5% of the receivables previously purchased in June 2018 until the new agreements terminate. The Company’s agreement with the credit servicer Genesis Financial Solutions (“Genesis”) remains in place.

~~Receivables issued by~~In January 2021, the Company reached additional agreements with the Investors to further amend the purchase agreements described above through June 30, 2021. CarVal continued to purchase add-on receivables for existing accounts and began to purchase 50% of new forward flow non-prime receivables. Genesis (becoming one of the “Investors”) began to purchase the remaining 50% of new forward flow non-prime receivables through June 30, 2021. Castlelake will continue to purchase add-on receivables for existing accounts through June 30, 2021. Signet continued to retain add-on receivables for its existing accounts but ~~pending transfer~~is no longer retaining new forward flow non-prime receivables.

In March 2021, the Company provided notice to the Investors of its ~~credit partners~~intent not to extend the respective agreements with such Investors beyond the expiration date of June 30, 2021. Effective July 1, 2021 (the “New Program Start Date”), all new prime and non-prime account origination will occur in accordance with the amended and restated Comenity and Genesis agreements as ~~of period end are classified as held~~further described in Note 22. The Company is currently in discussions with the Investors to extend the agreements related to the add-on purchases for ~~sale.~~ their respective existing non-prime accounts that were originated prior to the New Program Start Date.

Accounts receivable classified as trade receivables ~~are comprised~~consist primarily of accounts receivable related to the sale of diamonds to third parties from its polishing factory deemed unsuitable for Signet's needs in the Other segment.

Customer in-house finance receivables

As discussed above, the Company ~~has begun to retain~~began retaining certain customer in-house finance receivables beginning in the second quarter of Fiscal 2021. The allowance for credit losses is an estimate of expected credit losses, measured over the estimated life of its credit card receivables that considers forecasts of future economic conditions in addition to information about past events and current conditions. The Company accounts for the expected credit losses under ASC 326, “Measurement of Credit Losses on Financial Instruments,” which is referred to as the Current Expected Credit Loss (“CECL”) model. The estimate under the CECL model is significantly influenced by the composition, characteristics and quality of the Company’s portfolio of credit card receivables, as well as the prevailing economic conditions and forecasts utilized. The estimate of the allowance for credit losses includes an estimate for uncollectible principal as well as unpaid interest and fees.

~~Table of Contents~~

The allowance is maintained through an adjustment to the provision for credit losses and is evaluated for appropriateness and adjusted quarterly. CECL requires entities to use a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. The Company evaluated multiple risk characteristics of its credit card receivables portfolio and determined that credit quality and account vintage to be the most significant characteristics for estimating expected credit losses. To estimate its allowance for credit losses, the Company segregates its credit card receivables into credit quality categories using the customers’ FICO scores.

The following three industry standard FICO score categories are used:

•620 to 659 (“Near Prime”)

•580 to 619 (“Subprime”)

•Less than 580 (“Deep Subprime”)

These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and circumstances warrant. The expected loss rates are adjusted on a quarterly basis based on historical loss trends and are risk-adjusted for current and future economic conditions and events. As summarized in the table below, based on the changes in the agreements with the Investors in Fiscal 2021, there is currently one vintage year since the Company began maintaining new ~~accounts.~~accounts in Fiscal 2021 and ceased maintaining new accounts by the end of Fiscal 2021.

The following table disaggregates the Company’s customer in-house finance receivables by credit quality and vintage year as of ~~October 31, 2020:~~May 1, 2021:

(in millions)

Year of origination

Credit quality

Fiscal 2021

Near Prime

~~26.4~~46.0

Subprime

~~21.8~~26.2

Deep Subprime

~~6.0~~10.7

Total at amortized cost

~~54.2~~82.9

In estimating its allowance for credit losses, for each identified risk category, management utilized estimation methods based primarily on historical loss experience, current conditions, and other relevant factors. These methods utilize historical charge-off data of the

Table of Contents

Company’s non-prime portfolio, as well as incorporate any applicable macroeconomic variables (such as unemployment) that may be expected to impact credit performance. In addition to the quantitative estimate of expected credit losses under CECL using the historical loss information, the Company also incorporates qualitative adjustments for certain factors such as Company specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the allowance for credit losses reflects the Company’s best estimate of current expected credit losses. Management considered qualitative factors such as the unfavorable macroeconomic conditions caused by the COVID-19 uncertainty (including rates of unemployment), the Company’s non-prime portfolio performance during the prior recession, and the potential impacts of the economic stimulus packages in the US, in developing its estimate for current expected credit losses for the current period.

The following table is a rollforward of the Company’s allowance for credit losses on customer in-house finance receivables:


(in millions)
Balance at ~~February 1, 2020~~January 30, 2021	$	025.5
Provision for credit losses	~~14.6~~ (1.2)
Write-offs	0 (2.9)
~~Recoveries~~	0
Balance at ~~October 31, 2020~~May 1, 2021	$	~~14.6~~21.4

Beginning in the second quarter of Fiscal 2021, in connection with the new agreements executed with the Investors, additions to the allowance for credit losses are made by recording charges to bad debt expense (credit losses) within selling, general and administrative expenses within the condensed consolidated statements of operations. The uncollectible portion of customer in-house finance receivables are charged to the allowance for credit losses when an account is written-off after 180 days of non-payment, or in circumstances such as bankrupt or deceased cardholders. Write-offs on customer in-house finance receivables include uncollected amounts related to principal, interest, and late fees. Uncollectible accrued interest is accounted for by recognizing credit loss expense. Recoveries on customer in-house finance receivables previously written-off as uncollectible are credited to the allowance for credit losses.

A credit card account is contractually past due if the Company does not receive the minimum payment by the specified due date on the cardholder’s statement. It is the Company’s policy to continue to accrue interest and fee income on all credit card accounts, except in

~~Table of Contents~~

limited circumstances, until the credit card account balance and all related interest and other fees are paid or ~~charged-off,~~written-off, typically at 180 days delinquent, as noted above.

The following table disaggregates the Company’s customer in-house finance receivables by past due status as of ~~October 31, 2020:~~May 1, 2021:


(in millions)
Current	$	~~47.6~~69.2
1 - 30 days past due	~~4.0~~5.4
31 - 60 days past due	~~1.5~~1.9
61 - 90 days past due	~~0.7~~1.9
Greater than 90 days past due	~~0.4~~4.5
Total at amortized cost	$	~~54.2~~82.9

Interest income related to the Company’s customer in-house finance receivables is included within other operating income, net in the condensed consolidated statements of operations. Accrued interest is included within the same line item as the respective principal amount of the customer in-house finance receivables in the condensed consolidated balance sheets. The accrual of interest is discontinued at the time the receivable is determined to be uncollectible and written-off. ~~Accrued~~The Company recognized $4.0 million of interest income on its customer in-house finance receivables during the 13 ~~and 39~~ weeks ended ~~October 31, 2020 was immaterial.~~May 1, 2021.

12. Inventories

The following table summarizes the Company’s inventory by classification:


(in millions)	(in millions)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	May 1, 2021		January 30, 2021		May 2, 2020
Raw materials	Raw materials	$	84.2	$	56.2	$	65.5	Raw materials	$	72.9	$	45.3	$	69.8
Finished goods	Finished goods	2,089.8		2,275.5		2,453.9		Finished goods	1,946.1		1,987.2		2,322.4
Total inventories	Total inventories	$	2,174.0	$	2,331.7	$	2,519.4	Total inventories	$	2,019.0	$	2,032.5	$	2,392.2

Table of Contents

As of ~~October 31, 2020,~~May 1, 2021, inventory reserves were ~~$42.2~~$45.5 million ($~~67.0~~52.9 million and ~~$81.6~~$55.5 million as of ~~February 1,~~January 30, 2021 and May 2, 2020, ~~and November 2, 2019,~~ respectively).

13. Asset ~~impairment~~impairments, net

The following table summarizes the Company's asset impairment activity for the periods presented:


		13 weeks ended				39 weeks ended					13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(in millions)	May 1, 2021		May 2, 2020
Goodwill impairment (1)	Goodwill impairment (1)	$	0	$	0	$	10.7	$	47.7	Goodwill impairment (1)	$	0	$	10.7
Indefinite-lived intangible asset impairment (1)	Indefinite-lived intangible asset impairment (1)	0		0		83.3		0		Indefinite-lived intangible asset impairment (1)	0		83.3
Property and equipment impairment	Property and equipment impairment	1.5		0		27.2		0		Property and equipment impairment	1.0		13.8
Operating lease ROU asset impairment (2)	Operating lease ROU asset impairment (2)	0		0		36.9		0		Operating lease ROU asset impairment (2)	0.5		28.5
Total impairment		$	1.5	$	0	$	158.1	$	47.7
Total asset impairments, net										Total asset impairments, net	$	1.5	$	136.3

(1)

~~(1)~~ Refer to Note 15 for additional information.

(2) ~~During the 13 and 39 weeks ended October 31, 2020, the~~ The Company recorded ~~$0.9~~$0.2 million and ~~$3.2~~$1.0 million ~~respectively,~~ of gains on terminations or modifications of leases resulting from previously recorded impairments of the right of use ~~assets.~~assets during the 13 weeks ended May 1, 2021 and May 2, 2020, respectively.

Long-lived assets of the Company consist primarily of property and equipment, definite-lived intangible assets and operating lease right-of-use ~~(ROU)~~(“ROU”) assets. Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Potentially impaired assets or asset groups are identified by reviewing the undiscounted cash flows of individual ~~stores.~~stores or other asset groups. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the ~~store~~ asset group, based on the Company’s internal business plans. If the undiscounted cash flow for the ~~store~~ asset group is less than its carrying amount, the long-lived assets are measured for potential impairment by estimating the fair value of the ~~assets in the~~asset group, and recording an impairment loss for the amount that the carrying value exceeds the estimated fair value. The Company utilizes primarily the replacement cost method to estimate the fair value of its property and equipment, and the income capitalization method to estimate the fair value of its ROU assets, which incorporates historical store level sales, internal business plans, real estate market capitalization and rental rates, and discount rates.

Fiscal

~~Table of Contents~~

2021

Due to the various impacts of COVID-19 to the Company’s business during the 13 weeks ended May 2, 2020, including the temporary closure of all the Company’s stores beginning in late March 2020, ~~(see additional information in Note 1),~~ the Company determined triggering events had occurred for certain of the Company’s long-lived asset groups at ~~the~~ individual stores that required an interim impairment assessment during the first quarter of Fiscal 2021. This impacted property and equipment and ROU assets at the store level. The Company identified certain stores in the initial recoverability test which had carrying values in excess of the estimated undiscounted cash flows. For these stores failing the recoverability test, a fair value assessment for these long-lived assets was performed, and as a result of the estimated fair values, the Company recorded an impairment charge for property and equipment of $13.8 million and ROU assets of $28.5 million for the 13 weeks ended May 2, 2020.

Fiscal2022

During the 13 weeks ended ~~August~~May 1, ~~2020,~~2021, the Company ~~completed its quarterly trigger event assessment and~~ determined that a triggering ~~event~~events had occurred for certain ~~additional~~ long-lived asset groups at ~~the~~ individual stores based on real estate assessments (including store closure decisions) and ~~the continued uncertainty related to COVID-19 on forecasted cash flows~~store performance for the remaining lease period for certain ~~stores. These events~~stores that required an ~~interim~~ impairment ~~assessment during the second quarter of Fiscal 2021 for the identified store assets.~~assessment. This impacted property and equipment and ROU assets at the store level. The Company identified certain stores in the initial recoverability test which had carrying values in excess of the estimated undiscounted cash flows. For these stores failing the initial recoverability test, a fair value assessment for these long-lived assets was performed, and as a result of the estimated fair values, the Company recorded an impairment ~~charges~~charge for property and equipment of ~~$11.9~~$1.0 million and ROU assets of ~~$8.4 million for the 13 weeks ended August 1, 2020.~~

During the 13 weeks ended October 31, 2020, the Company completed its quarterly trigger event assessment and determined that a triggering event had occurred for certain additional long-lived asset groups at the individual stores based on real estate assessments (including store closure decisions) and the continued uncertainty related to COVID-19 on forecasted cash flows for the remaining lease period for certain stores. These events required an interim impairment assessment during the third quarter of Fiscal 2021 for the identified store assets. This impacted property and equipment and ROU assets at the store level. The Company identified certain stores in the initial recoverability test which had carrying values in excess of the estimated undiscounted cash flows. For these stores failing the recoverability test, a fair value assessment for these long-lived assets was performed, and as a result of the estimated fair values, the Company recorded impairment charges for property and equipment of $1.5 million and ROU assets of $0.0$0.5 million, which is net of ~~$0.9 million~~gains on terminations or modifications of leases resulting from previously recorded impairments of the ~~right~~ROU assets of ~~use assets for the 13 weeks ended October 31, 2020.~~$0.2 million.

The uncertainty of the COVID-19 impact to the Company’s business could continue to further negatively affect the operating performance and cash flows of the above identified stores or additional stores, including the magnitude and potential resurgence of COVID-19, occupancy restrictions ~~during~~in the ~~holiday shopping season,~~Company’s stores, the inability to achieve or maintain cost savings initiatives included in the business plans, changes in real estate strategy or macroeconomic factors which influence consumer behavior. InIn addition, key assumptions used to estimate fair value, such as sales trends, capitalization and market rental rates, and discount rates could impact the fair value estimates of the store assets in future periods.

Table of Contents

14. Leases

Signet occupies certain properties and holds machinery and vehicles under operating leases. Signet determines if an arrangement is a lease at the agreement’s inception. Certain operating leases include predetermined rent increases, which are charged to store occupancy costs within cost of sales on a straight-line basis over the lease term, including any construction period or other rental holiday. Other variable amounts paid under operating leases, such as taxes and common area maintenance, are charged to ~~selling, general and administrative expenses~~store occupancy costs within cost of sales as incurred. Premiums paid to acquire short-term leasehold properties and inducements to enter into a lease are recognized on a straight-line basis over the lease term. In addition, certain leases provide for contingent rent based on a percentage of sales in excess of a predetermined level. Further, certain leases provide for variable rent increases based on indexes specified within the lease agreement. The variable increases based on an index are initially measured as part of the operating lease liability using the index at the commencement date. Contingent rent and subsequent changes to variable increases based on indexes will be recognized in the variable lease cost and included in the determination of total lease cost when it is probable that the expense has been incurred and the amount is reasonably estimable. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and non-current operating lease liabilities in the Company’s condensed consolidated balance sheets.

~~Table of Contents~~

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate available at the lease commencement date, based primarily on the underlying lease term, in measuring the present value of lease payments. Lease terms, which include the period of the lease that cannot be canceled, may also include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The operating lease ROU asset may also include initial direct costs, prepaid and/or accrued lease payments and the unamortized balance of lease incentives received. ROU assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with the Company’s long-lived asset impairment assessment policy.

Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities on the Company’s condensed consolidated ~~statement~~statements of cash flows. Operating lease payments representing costs to ready an asset for its intended use (i.e. leasehold improvements) are represented within investing activities within the Company’s condensed consolidated statements of cash flows.

The Company deferred substantially all of its rent payments due in the months of April 2020 and May 2020. ~~The Company began paying certain rents in June 2020 and all rents in July 2020. In total,~~As of May 1, 2021, the Company had approximately ~~$81~~$64 million of deferred rent payments ~~originally due in Fiscal 2021 that have been~~remaining. This deferred rent is expected to ~~beyond Fiscal 2021 (expected to paid~~be substantially repaid by the end of ~~the second quarter of~~ Fiscal ~~2022).~~2022. The Company has not recorded any provision for interest or penalties which may arise as a result of these deferrals, as management does not believe payment for any ~~potential amounts~~such interest or penalties to be probable. In April 2020, the FASB granted guidance (hereinafter, the practical expedient) permitting an entity to choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract, specifically in situations where rent concessions have been agreed to with landlords as a result of COVID-19. Instead, the entity may account for COVID-19 related rent concessions, whatever their form (e.g. rent deferral, abatement or other) either: a) as if they were part of the enforceable rights and obligations of the parties under the existing lease contract; or b) as lease modifications. In accordance with this practical expedient, the Company ~~has~~ elected not to account for any concessions granted by landlords as a result of COVID-19 as lease modifications. Rent abatements under the practical expedient would be recorded as a negative variable lease cost. The Company ~~is currently negotiating~~negotiated with ~~nearly~~substantially all of its landlords and ~~to date,~~ has received certain concessions in the form of rent deferrals and other lease or rent modifications. In addition, the Company ~~continued recording~~recorded lease expense during the deferral ~~period~~periods in accordance with its existing policies.

The weighted average lease term and discount rate for the Company’s outstanding operating leases were as follows:

~~October 31, 2020~~May 1, 2021

Weighted average remaining lease term

~~6.4~~6.1 years

Weighted average discount rate

~~5.6~~5.5

~~Total lease costs are as follows:~~

13 weeks ended 39 weeks ended
(in millions) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Operating lease cost $ 108.9 $ 115.3 $ 325.8 $ 342.4
Short-term lease cost 2.1 4.0 12.8 15.2
Variable lease cost 27.8 10.0 79.7 64.0
Sublease income (0.5) (0.3) (1.3) (1.2)
Total lease cost $ 138.3 $ 129.0 $ 417.0 $ 420.4

Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities on the Company’s condensed consolidated statement of cash flows. Payments representing costs to ready a ROU asset for its intended use are represented within investing activities within the Company’s condensed consolidated statements of cash flows.

2420

Table of Contents

Total lease costs are as follows:


	13 weeks ended
(in millions)	May 1, 2021		May 2, 2020
Operating lease cost	$	105.6	$	111.4
Short-term lease cost	0.8		4.9
Variable lease cost	30.6		25.6
Sublease income	(0.7)		(0.5)
Total lease cost	$	136.3	$	141.4

Supplemental cash flow information related to leases was as follows:


		13 weeks ended				39 weeks ended					13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(in millions)	May 1, 2021		May 2, 2020
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:									Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Operating cash flows from operating leases	$	122.1	$	83.4	$	274.5	$	313.3	Operating cash flows from operating leases	$	128.1	$	49.3
Operating lease right-of-use assets obtained in exchange for lease obligations	Operating lease right-of-use assets obtained in exchange for lease obligations	15.0		29.6		42.0		70.4		Operating lease right-of-use assets obtained in exchange for lease obligations	24.6		14.2
Reduction in the carrying amount of right-of-use assets (1)	Reduction in the carrying amount of right-of-use assets (1)	86.8		87.7		258.9		262.9		Reduction in the carrying amount of right-of-use assets (1)	85.9		87.9

(1) Amount excludes impairment of right-of-use assets of ~~$0.0~~$0.5 million and ~~$36.9~~$28.5 million during the 13 ~~and 39~~ weeks ended ~~October 31,~~May 1, 2021 and May 2, 2020, respectively, as further described in Note 13.

The future minimum operating lease payments for operating leases having initial or non-cancelable terms in excess of one year are as follows:


(in millions)	~~October 31, 2020~~May 1, 2021
Remainder of Fiscal ~~2021~~2022	$	~~110.1~~
~~Fiscal 2022~~	~~487.0~~384.6
Fiscal 2023	~~334.5~~356.2
Fiscal 2024	~~263.6~~279.7
Fiscal 2025	~~207.4~~217.4
Fiscal 2026	158.7
Thereafter	~~551.1~~399.9
Total minimum lease payments	~~1,953.7~~1,796.5
Less: Imputed interest	~~(384.4)~~(363.5)
Present value of lease liabilities	$	~~1,569.3~~1,433.0

15. Goodwill and intangibles

Goodwill and other indefinite-lived intangible assets, such as indefinite-lived trade names, are evaluated for impairment annually. Additionally, if events or conditions indicate the carrying value of a reporting unit or an indefinite-lived intangible asset may be greater than its fair value, the Company would evaluate the asset for impairment at that time. Impairment testing compares the carrying amount of the reporting unit or other intangible assets with its fair value. When the carrying amount of the reporting unit or other intangible assets exceeds its fair value, an impairment charge is recorded.

Fiscal2021

Due to various impacts of COVID-19 to the Company’s business during the 13 weeks ended May 2, 2020, the Company determined a triggering event had occurred that required an interim impairment assessment for all of its reporting units and indefinite-lived intangible assets. The income approach was used to estimate the fair value of each reporting unit, whereby the Company calculates the fair value based on the present value of estimated future cash flows, using a discount rate aligned with market-based assumptions. The relief-from-royalty method was used to estimate the fair value of indefinite-lived intangible assets. As part of the assessment, it was determined that an increase in the discount rates were required to reflect the prevailing uncertainty inherent in the forecasts due to current market conditions and potential COVID-19 impacts. This higher discount rate, in conjunction with revised long-term projections associated with certain aspects of the Company’s forecast, resulted in lower than previously projected long-term future cash flows for the reporting units and indefinite-lived intangible assets which negatively affected the valuation compared to previous valuations. As a result of the interim impairment assessment, during the first quarter of Fiscal 2021 the Company recognized pre-tax impairment charges ~~for~~related to goodwill ~~and indefinite-lived intangible assets totaling $94~~of $10.7 million in the ~~13 weeks ended May 2, 2020.~~condensed consolidated statements of operations within its North America segment related to R2Net and Zales Canada goodwill.

~~During~~

Table of Contents

In conjunction with the ~~second~~interim goodwill impairment tests noted above, during the first quarter of Fiscal 2021 the Company ~~completed its annual evaluation~~determined that the fair values of ~~its~~ indefinite-lived intangible assets ~~including goodwill and~~related to certain Zales trade names ~~identified~~were less than their carrying value. Accordingly, in the Zale acquisition, and through this assessment, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceeded their fair values. Additionally, the Company completed its quarterly trigger event assessment and determined that no triggering event had occurred during the secondfirst quarter of Fiscal 2021, ~~requiring interim~~the Company recognized pre-tax impairment ~~assessments for~~charges within asset impairments, net on the condensed consolidated statements of operations of $83.3 million within its ~~remaining reporting units with goodwill and indefinite-lived intangible assets.~~North America segment.

~~Based on management’s trigger event assessment during~~Fiscal2022

During the 13 weeks ended ~~October 31, 2020,~~May 1, 2021, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceed their fair values.

~~Table~~In connection with the acquisition of ~~Contents~~

~~The uncertainty~~Rocksbox on March 29, 2021, the Company recognized $11.5 million of ~~the COVID-19 impact could negatively affect the share price of the Company’s stock, as well as key assumptions used to estimate fair value, such as sales trends, margin trends, long-term growth~~definite-lived intangible assets and ~~discount rates. In addition, as a result of the impairment~~$6.9 million of goodwill, ~~and trade names during the first quarter of Fiscal 2021, the Company’s goodwill and trade names within~~which are reported in the North America ~~segment approximate their respective fair values and could be at risk for additional impairments should there be an adverse business or economic change in future periods.~~segment. The weighted-average amortization period of the definite-lived intangibles assets acquired is eight years.

Goodwill

During the 13 weeks ended August 3, 2019, a non-cash immaterial out-of-period adjustment of $47.7 million, with $35.2 million related to Zales goodwill and $12.5 million related to R2Net goodwill, was recognized within asset impairments on the condensed consolidated statements of operations related to an error in the calculation of goodwill impairments during Fiscal 2019.

During the 13 weeks ended May 2, 2020, the Company recognized pre-tax impairment charges within asset impairments on the condensed consolidated statements of operations of $10.7 million within its North America segment related to R2Net and Zales Canada goodwill.

The following table summarizes the Company’s goodwill by reportable segment:

(in millions)

North America

Balance at ~~February 2, 2019~~January 30, 2021

~~296.6~~238.0

Acquisitions

6.9

~~Impairment(1)~~

~~(47.7)~~

~~Impact of foreign exchange and other adjustments~~

~~(0.1)~~

Balance at ~~February~~May 1, ~~2020~~

~~248.8~~

~~Impairment~~

~~(10.7)~~

~~Impact of foreign exchange~~

~~(0.1)~~

~~Balance at October 31, 2020~~2021

~~238.0~~244.9

~~(1) During Fiscal 2020, an immaterial out-of-period adjustment was recognized related to an error in the calculation of goodwill impairments during Fiscal 2019.~~

Intangibles

Definite-lived intangible assets include trade names, technology and ~~favorable lease agreements. All indefinite-lived~~customer relationship assets. Indefinite-lived intangible assets consist of trade names. Both definite and indefinite-lived assets are recorded within intangible assets, net, on the condensed consolidated balance sheets. Intangible liabilities, net, ~~is comprised~~consists of unfavorable ~~lease agreements and~~ contracts and is recorded within accrued expenses and other current liabilities and other liabilities on the condensed consolidated balance sheets.

The following table provides additional detail regarding the composition of intangible assets and liabilities:


		October 31, 2020						February 1, 2020						November 2, 2019							May 1, 2021						January 30, 2021						May 2, 2020
(in millions)	(in millions)	Gross carrying amount		Accumulated amortization(1)		Net carrying amount		Gross carrying amount		Accumulated amortization(1)		Net carrying amount		Gross carrying amount		Accumulated amortization(1)		Net carrying amount		(in millions)	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Intangible assets, net:	Intangible assets, net:																			Intangible assets, net:
Definite-lived intangible assets	Definite-lived intangible assets	$	53.1	$	(51.5)	$	1.6	$	53.2	$	(50.9)	$	2.3	$	53.2	$	(50.7)	$	2.5	Definite-lived intangible assets	$	17.1	$	(4.6)	$	12.5	$	5.6	$	(4.2)	$	1.4	$	5.6	$	(3.6)	$	2.0
Indefinite-lived intangible assets(1)	Indefinite-lived intangible assets(1)	474.7		(297.5)		177.2		475.4		(213.9)		261.5		475.8		(214.1)		261.7		Indefinite-lived intangible assets(1)	178.1		—		178.1		177.6		—		177.6		176.7		—		176.7
Total intangible assets, net	Total intangible assets, net	$	527.8	$	(349.0)	$	178.8	$	528.6	$	(264.8)	$	263.8	$	529.0	$	(264.8)	$	264.2	Total intangible assets, net	$	195.2	$	(4.6)	$	190.6	$	183.2	$	(4.2)	$	179.0	$	182.3	$	(3.6)	$	178.7

Intangible liabilities, net	Intangible liabilities, net	$	(113.8)	$	102.0	$	(11.8)	$	(113.9)	$	98.0	$	(15.9)	$	(113.9)	$	96.7	$	(17.2)	Intangible liabilities, net	$	(38.0)	$	29.0	$	(9.0)	$	(38.0)	$	27.5	$	(10.5)	$	(38.0)	$	23.5	$	(14.5)

(1) ~~Accumulated amortization amounts related to the indefinite-lived intangible assets represents~~The gross carrying amount is presented net of accumulated impairment losses ~~recorded to date~~of $297.5 million as of May 1, 2021, January 30, 2021 and ~~includes~~May 2, 2020 as well as including the impact of foreign currency.

The interim impairment test resulted in the determination that the fair values of indefinite-lived intangible assets related to certain Zales trade names were less than their carrying value. Accordingly, in the 13 weeks ended May 2, 2020, the Company recognized pre-tax impairment charges within asset impairments on the condensed consolidated statements of operations of $83.3 million within its North America segment.

~~Table of Contents~~

16. Derivatives

Derivative transactions are used by Signet for risk management purposes to address risks inherent in Signet’s business operations and sources of financing. The main risks arising from Signet’s operations are market risk including foreign currency risk, commodity risk, liquidity risk and interest rate risk. Signet uses derivative financial instruments to manage and mitigate certain of these risks under policies reviewed and approved by the Board of Directors. Signet does not enter into derivative transactions for speculative purposes.

Market risk

Signet generates revenues and incurs expenses in US dollars, Canadian dollars and British pounds. As a portion of the International segment purchases and purchases made by the Canadian operations of the North America segment are denominated in US dollars, Signet enters into forward foreign currency exchange contracts and foreign currency swaps to manage this exposure to the US dollar.

Table of Contents

Signet holds a fluctuating amount of British pounds and Canadian dollars reflecting the cash generative characteristics of operations. Signet’s objective is to minimize net foreign exchange exposure to the condensed consolidated ~~statement~~statements of operations on non-US dollar denominated items through managing cash levels, non-US dollar denominated intra-entity balances and foreign currency swaps. In order to manage the foreign exchange exposure and minimize the level of funds denominated in British pounds and Canadian dollars, dividends are paid regularly by subsidiaries to their immediate holding companies and excess British pounds and Canadian dollars are sold in exchange for US dollars.

Signet’s policy is to reduce the impact of precious metal commodity price volatility on operating results through the use of outright forward purchases of, or by entering into options to purchase, precious metals within treasury guidelines approved by the Board of Directors. In particular, Signet undertakes some hedging of its requirements for gold through the use of forward purchase contracts, options and net zero premium collar arrangements (a combination of forwards and option contracts).

Liquidity risk

Signet’s objective is to ensure that it has access to, or the ability to generate, sufficient cash from either internal or external sources in a timely and cost-effective manner to meet its commitments as they become due and payable. Signet manages liquidity risks as part of its overall risk management policy. Management produces forecasting and budgeting information that is reviewed and monitored by the Board of Directors. Cash generated from operations and external financing are the main sources of funding, which supplement Signet’s resources in meeting liquidity requirements.

The primary external sources of funding are an asset-based credit facility and senior unsecured notes as described in Note 18.

Interest rate risk

Signet has exposure to movements in interest rates associated with cash and borrowings. Signet may enter into various interest rate protection agreements in order to limit the impact of movements in interest rates.

~~Interest rate swap (designated)~~ — The Company entered into an interest rate swap in March 2015 with an aggregate notional amount of $300.0 million that matured in April 2019. Under this contract, the Company agreed to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional amounts. This contract was entered into to reduce the consolidated interest rate risk associated with variable rate, long-term debt. The Company designated this derivative as a cash flow hedge of the variability in expected cash outflows for interest payments. During the term of the interest rate swap, the Company effectively converted a portion of its variable-rate senior unsecured term loan into fixed-rate debt.

Credit risk and concentrations of credit risk

Credit risk represents the loss that would be recognized at the reporting date if counterparties failed to perform as contracted. Signet does not anticipate non-performance by counterparties of its financial instruments. Signet does not require collateral or other security to support cash investments or financial instruments with credit risk; however, it is Signet’s policy to only hold cash and cash equivalent investments and to transact financial instruments with financial institutions with a certain minimum credit rating. As of ~~October 31, 2020,~~May 1, 2021, management does not believe Signet is exposed to any significant concentrations of credit risk that arise from cash and cash equivalent investments, derivatives or accounts receivable.

Commodity and foreign currency risks

The following types of derivative financial instruments are utilized by Signet to mitigate certain risk exposures related to changes in commodity prices and foreign exchange rates:

Forward foreign currency exchange contracts (designated) — These contracts, which are principally in US dollars, are entered into to limit the impact of movements in foreign exchange rates on forecasted foreign currency purchases. These contracts were de-designated during the 13 weeks ended May 2, 2020. This de-designation occurred due to uncertainly around the volume of purchases in the Company’s UK business. These contracts were unlikely to retain hedge effectiveness given the change in ~~circumstances.~~

~~Table~~circumstances as a result of ~~Contents~~

COVID-19. Trading for these contracts resumed during ~~the third quarter of Fiscal 2021. Gains, losses, and fair values for these contracts were not material for~~ the third quarter of Fiscal 2021. The total notional amount of these foreign currency contracts outstanding as of ~~October 31, 2020~~May 1, 2021 was ~~$13.5~~$19.0 million ~~(February 1, 2020~~(January 30, 2021 and ~~November~~May 2, ~~2019: $23.0~~2020: $12.5 million and ~~$25.0~~$0.0 million, respectively). These contracts have been designated as cash flow hedges and will be settled over the next 12 months ~~(February 1, 2020~~(January 30, 2021 and ~~November~~May 2, ~~2019:~~2020: 12 months and ~~11 months,~~not applicable, respectively).

Forward foreign currency exchange contracts (undesignated) — Foreign currency contracts not designated as cash flow hedges are used to limit the impact of movements in foreign exchange rates on recognized foreign currency payables and to hedge currency flows through Signet’s bank accounts to mitigate Signet’s exposure to foreign currency exchange risk in its cash and borrowings. The total notional amount of these foreign currency contracts outstanding as of ~~October 31, 2020~~May 1, 2021 was ~~$51.3~~$108.8 million ~~(February 1, 2020~~(January 30, 2021 and ~~November~~May 2, ~~2019: $224.2~~2020: $107.6 million and ~~$134.3~~$177.6 million, respectively). The outstanding amount as of May 2, 2020 included certain contracts which were previously designated, as well as a forward contract entered into to hedge the portion of the insurance proceeds expected to be received in British Pounds associated with the shareholder litigation, which had a notional amount of £95 million.

Table of Contents

Commodity forward purchase contracts and net ~~zero-cost~~zero premium collar arrangements (designated) — These contracts are entered into to reduce Signet’s exposure to significant movements in the price of the underlying precious metal raw materials. During the 13 weeks ended May 2, 2020, the contracts which were still outstanding (and unrealized) were de-designated and liquidated. The contracts which were already settled ~~remain~~remained designated as the hedged inventory purchases from these contracts ~~are~~were still on hand. The unrealized contracts were de-designated as a result of uncertainty around the Company’s future purchasing volume due to COVID-19 and thus the contracts were unlikely to retain hedge effectiveness.

Trading for these contracts resumed during the third quarter of Fiscal 2021. ~~Gains, losses, and fair values~~Trading for these contracts ~~were not~~was suspended during Fiscal 2022 due to the current commodity price environment and there was no material ~~for the third quarter of Fiscal 2021. The total~~ notional amount of these commodity derivative contracts outstanding as of ~~October 31, 2020 was 11,000 ounces of gold (February~~May 1, ~~2020 and November~~2021, January 30, 2021, or May 2, 2019: 63,000 ounces and 75,000 ounces, respectively). These contracts have been designated as cash flow hedges and will be settled over the next 6 months (February 1, 2020 and November 2, 2019: 12 months and 14 months, respectively).2020.

The bank counterparties to the derivative instruments expose Signet to credit-related losses in the event of their non-performance. However, to mitigate that risk, Signet only contracts with counterparties that meet certain minimum requirements under its counterparty risk assessment process. As of ~~October 31, 2020,~~May 1, 2021, Signet believes that this credit risk did not materially change the fair value of the foreign currency or commodity contracts.

The following table summarizes the fair value and presentation of derivative instruments in the condensed consolidated balance sheets:


		Fair value of derivative assets								Fair value of derivative assets
(in millions)	(in millions)	Balance sheet location	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	Balance sheet location	May 1, 2021		January 30, 2021		May 2, 2020
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:								Derivatives designated as hedging instruments:
Foreign currency contracts	Foreign currency contracts	Other current assets	$	0	$	0	$	0.1	Foreign currency contracts	Other current assets	$	0.1	$	0	$	0
Commodity contracts		Other current assets	0		11.8		9.8
Commodity contracts		Other assets	0		0		0.6

Total derivative assets	Total derivative assets		0		11.8		10.5		Total derivative assets		0.1		0		0
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:								Derivatives not designated as hedging instruments:
Foreign currency contracts	Foreign currency contracts	Other current assets	0		0.6		0.3		Foreign currency contracts	Other current assets	0.1		0.1		0.1
Total derivative assets	Total derivative assets		$	0	$	12.4	$	10.8	Total derivative assets		$	0.2	$	0.1	$	0.1

Fair value of derivative liabilities
(in millions) Balance sheet location October 31, 2020 February 1, 2020 November 2, 2019
Derivatives designated as hedging instruments:
Foreign currency contracts Other current liabilities $ 0 $ (0.8) $ (0.9)
Commodity contracts Other current liabilities 0 0 (0.2)
0 (0.8) (1.1)
Derivatives not designated as hedging instruments:
Foreign currency contracts Other current liabilities (0.5) (0.1) 0
Total derivative liabilities $ (0.5) $ (0.9) $ (1.1)

~~Table of Contents~~


	Fair value of derivative liabilities
(in millions)	Balance sheet location	May 1, 2021		January 30, 2021		May 2, 2020
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current liabilities	$	(0.3)	$	(0.3)	$	0
Commodity contracts	Other current liabilities	0		(0.1)		0


		(0.3)		(0.4)		0
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current liabilities	(0.5)		0		(0.3)
Total derivative liabilities		$	(0.8)	$	(0.4)	$	(0.3)

Derivatives designated as cash flow hedges

The following table summarizes the pre-tax gains (losses) recorded in AOCI for derivatives designated in cash flow hedging relationships:


(in millions)	(in millions)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	May 1, 2021		January 30, 2021		May 2, 2020
Foreign currency contracts	Foreign currency contracts	$	0	$	(1.0)	$	(0.3)	Foreign currency contracts	$	(0.6)	$	(0.7)	$	0
Commodity contracts	Commodity contracts	3.5		17.7		16.1		Commodity contracts	(0.4)		(0.4)		6.2

Gains (losses) recorded in AOCI	Gains (losses) recorded in AOCI	$	3.5	$	16.7	$	15.8	Gains (losses) recorded in AOCI	$	(1.0)	$	(1.1)	$	6.2

Table of Contents

The following tables summarize the effect of derivative instruments designated as cash flow hedges inon OCI and the condensed consolidated ~~statement~~statements of operations:

Foreign currency contracts


			13 weeks ended				39 weeks ended						13 weeks ended
(in millions)	(in millions)	Statement of operations caption	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(in millions)	Statement of operations caption	May 1, 2021		May 2, 2020
Gains (losses) recorded in AOCI, beginning of period	Gains (losses) recorded in AOCI, beginning of period		$	0	$	1.7	$	(1.0)	$	0.7	Gains (losses) recorded in AOCI, beginning of period		$	(0.7)	$	(1.0)
Current period gains (losses) recognized in OCI	Current period gains (losses) recognized in OCI		0		(1.7)		1.6		(0.1)		Current period gains (losses) recognized in OCI		0		1.6
Losses (gains) reclassified from AOCI to net income	Losses (gains) reclassified from AOCI to net income	Cost of sales (1)	0		(0.3)		0		(0.9)		Losses (gains) reclassified from AOCI to net income	Cost of sales (1)	0.1		0
Gains from ineffective hedges reclassified from AOCI to net income		Other operating income (loss) (1)	0		0		(0.6)		0
Gains from de-designated hedges reclassified from AOCI to net income											Gains from de-designated hedges reclassified from AOCI to net income	Other operating income, net (1)	0		(0.6)
Gains (losses) recorded in AOCI, end of period	Gains (losses) recorded in AOCI, end of period		$	0	$	(0.3)	$	0	$	(0.3)	Gains (losses) recorded in AOCI, end of period		$	(0.6)	$	0

Commodity contracts

13 weeks ended 39 weeks ended
(in millions) Statement of operations caption October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Gains (losses) recorded in AOCI, beginning of period $ 5.3 $ 11.2 $ 17.7 $ 4.0
Current period gains (losses) recognized in OCI 0 5.1 (1.4) 11.6
Losses (gains) reclassified from AOCI to net income
Cost of sales (1)
(1.8) (0.2) (3.5) 0.5
Gains from ineffective hedges reclassified from AOCI to net income
Other operating income (loss) (1)
0 0 (9.3) 0
Gains (losses) recorded in AOCI, end of period $ 3.5 $ 16.1 $ 3.5 $ 16.1

~~Interest rate swaps~~

13 weeks ended 39 weeks ended
(in millions) Statement of operations caption October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Gains recorded in AOCI, beginning of period $ 0 $ 0 $ 0 $ 0.6
(Gains) losses reclassified from AOCI to net income
Interest expense, net (1)
0 0 0 (0.6)
Gains recorded in AOCI, end of period $ 0 $ 0 $ 0 $ 0


		13 weeks ended
(in millions)	Statement of operations caption	May 1, 2021		May 2, 2020
Gains (losses) recorded in AOCI, beginning of period		$	(0.4)	$	17.7
Current period gains (losses) recognized in OCI		(0.1)		(1.4)
Losses (gains) reclassified from AOCI to net income	Cost of sales (1)	0.1		(0.8)
Gains from de-designated hedges reclassified from AOCI to net income	Other operating income, net (1)	0		(9.3)
Gains (losses) recorded in AOCI, end of period		$	(0.4)	$	6.2

(1) Refer to table below for total amounts of financial statement captions impacted by cash flow hedges.

There was no material ineffectiveness related to the Company’s derivative instruments designated in cash flow hedging relationships for the 13 weeks ended ~~October 31,~~May 1, 2021 and May 2, 2020 ~~and November~~other than the items disclosed above during the 13 weeks ended May 2, ~~2019.~~2020. As of ~~October 31, 2020,~~May 1, 2021, based on current valuations, the Company expects ~~$3.5~~approximately $1.0 million of net pre-tax derivative ~~gains~~losses to be reclassified out of AOCI into earnings ~~during~~within the next ~~twelve~~12 months.

~~Table of Contents~~

~~Total amounts presented in the condensed consolidated statements of operations~~

13 weeks ended 39 weeks ended
(in millions) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Cost of sales $ (863.8) $ (818.6) $ (2,176.0) $ (2,652.2)
Other operating income (loss) (0.4) 0 $ 4.3 1.4
Interest expense, net $ (9.1) $ (8.6) $ (25.6) $ (27.9)

Derivatives not designated as hedging instruments

The following table presents the effects of the Company’s derivatives instruments not designated as cash flow hedges in the condensed consolidated ~~statement~~statements of operations:

13 weeks ended

39 weeks ended

13 weeks ended

(in millions)

Statement of operations caption

October 31, 2020

November 2, 2019

October 31, 2020

November 2, 2019

(in millions)

Statement of operations caption

May 1, 2021

May 2, 2020

Foreign currency contracts

Other operating income (loss)

(1.1)

3.4

(2.1)

(1.8)

Foreign currency contracts

Other operating income, net

0.9

(3.9)

17. Fair value measurement

The estimated fair value of Signet’s financial instruments held or issued to finance Signet’s operations is summarized below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that Signet would realize upon disposition nor do they indicate Signet’s intent or ability to dispose of the financial instrument. Assets and liabilities that are carried at fair value are required to be classified and disclosed in one of the following three categories:

Level 1—quoted market prices in active markets for identical assets and liabilities

Level 2—observable market based inputs or unobservable inputs that are corroborated by market data

Level 3—unobservable inputs that are not corroborated by market data

Table of Contents

Signet determines fair value based upon quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The methods Signet uses to determine fair value on an instrument-specific basis are detailed below:


		October 31, 2020						February 1, 2020						November 2, 2019							May 1, 2021						January 30, 2021						May 2, 2020
(in millions)	(in millions)	Carrying Value		Level 1		Level 2		Carrying Value		Level 1		Level 2		Carrying Value		Level 1		Level 2		(in millions)	Carrying Value		Level 1		Level 2		Carrying Value		Level 1		Level 2		Carrying Value		Level 1		Level 2
Assets:	Assets:																			Assets:
US Treasury securities	US Treasury securities	$	6.3	$	6.3	$	0	$	7.2	$	7.2	$	0	$	7.2	$	7.2	$	0	US Treasury securities	$	5.1	$	5.1	$	0	$	5.7	$	5.7	$	0	$	7.4	$	7.4	$	0

Foreign currency contracts	Foreign currency contracts	0		0		0		0.6		0		0.6		0.4		0		0.4		Foreign currency contracts	0.2		0		0.2		0.1		0		0.1		0.1		0		0.1
Commodity contracts		0		0		0		11.8		0		11.8		10.4		0		10.4

US government agency securities	US government agency securities	3.7		0		3.7		4.7		0		4.7		4.9		0		4.9		US government agency securities	3.1		0		3.1		3.2		0		3.2		4.0		0		4.0
Corporate bonds and notes	Corporate bonds and notes	7.3		0		7.3		8.5		0		8.5		8.5		0		8.5		Corporate bonds and notes	6.2		0		6.2		6.5		0		6.5		8.0		0		8.0
Total assets	Total assets	$	17.3	$	6.3	$	11.0	$	32.8	$	7.2	$	25.6	$	31.4	$	7.2	$	24.2	Total assets	$	14.6	$	5.1	$	9.5	$	15.5	$	5.7	$	9.8	$	19.5	$	7.4	$	12.1

Liabilities:	Liabilities:																			Liabilities:
Foreign currency contracts	Foreign currency contracts	$	(0.5)	$	0	$	(0.5)	$	(0.9)	$	0	$	(0.9)	$	(0.9)	$	0	$	(0.9)	Foreign currency contracts	$	(0.8)	$	0	$	(0.8)	$	(0.3)	$	0	$	(0.3)	$	(0.3)	$	0	$	(0.3)
Commodity contracts	Commodity contracts	0		0		0		0		0		0		(0.2)		0		(0.2)		Commodity contracts	0		0		0		(0.1)		0		(0.1)		0		0		0

Total liabilities	Total liabilities	$	(0.5)	$	0	$	(0.5)	$	(0.9)	$	0	$	(0.9)	$	(1.1)	$	0	$	(1.1)	Total liabilities	$	(0.8)	$	0	$	(0.8)	$	(0.4)	$	0	$	(0.4)	$	(0.3)	$	0	$	(0.3)

Investments in US Treasury ~~securities and corporate equity~~ securities are based on quoted market prices for identical instruments in active markets, and therefore were classified as Level 1 measurements in the fair value hierarchy. Investments in US government agency securities and corporate bonds and notes are based on quoted prices for similar instruments in active markets, and therefore were classified as Level 2 measurements in the fair value hierarchy. The fair value of derivative financial instruments has been

~~Table of Contents~~

determined based on market value equivalents at the balance sheet date, taking into account the current interest rate environment, foreign currency forward rates or commodity forward rates, and therefore were classified as Level 2 measurements in the fair value hierarchy. See Note 16 for additional information related to the Company’s derivatives.

During the second quarter of Fiscal 2019, the Company completed the sale of all eligible non-prime in-house accounts receivable. Upon closing, 5% of the purchase price was deferred until the second anniversary of the closing date. Final payment of the deferred purchase price is contingent upon the non-prime portfolio achieving a pre-defined yield. The Company recorded an asset at the transaction date related to this deferred payment at fair value. This estimated fair value was derived from a discounted cash flow model using unobservable Level 3 inputs, including estimated yields derived from historic performance, loss rates, payment rates and discount rates to estimate the fair value associated with the accounts receivable. The measurement period was completed in June 2020 and the Company expects to receive the full deferred payment of $23.5 million. As a result of the amended agreements described in Note 11, the deferred payment will now be due in June 2021, or earlier upon termination by the parties. This amount has been recorded within other current assets on the condensed consolidated balance sheet as of ~~October 31, 2020.~~May 1, 2021. See Note 11 for additional information.

Goodwill and other indefinite-lived intangible assets, are evaluated for impairment annually or more frequently if events or conditions indicate the carrying value of a reporting unit or an indefinite-lived intangible asset may be greater than its fair value. Long-lived asset impairment testing is performed if events occur which indicate the carrying value of the long-lived asset or asset group may be greater than its fair value, and when the undiscounted cash flows of the asset or asset group are below its carrying value. During the 13 weeks ended May 2, 2020, the Company performed an interim impairment test for goodwill, indefinite-lived intangible assets and long-lived assets. The fair value was calculated using the income approach for the reporting units and the relief from royalty method for the indefinite-lived intangible assets, respectively. The fair value is a Level 3 valuation based on certain unobservable inputs including estimated future cash flows and discount rates aligned with market-based assumptions, that would be utilized by market participants in valuing these assets or prices of similar assets. For long-lived assets, the Company utilizes primarily the replacement cost method (a level 3 valuation method) for the fair value of its property and equipment, and the income method to estimate the fair value of its ROU assets, which incorporates Level 3 inputs such as historical store level sales, internal business plans, real estate market capitalization and rental rates, and discount rates. See Note 13 and Note 15 for additional information.

The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued expenses and other current liabilities, and income taxes approximate fair value because of the short-term maturity of these amounts.

Table of Contents

The fair values of long-term debt instruments, excluding revolving credit facilities, were determined using quoted market prices in inactive markets ~~or discounted cash flows~~ based upon current observable market interest rates and therefore were classified as Level 2 measurements in the fair value hierarchy. The carrying value of the ABL Revolving Facility (as defined in Note 18) approximates fair ~~value.~~value based on the nature of the instrument and variable interest rate. The following table provides a summary of the carrying amount and fair value of outstanding debt:


		October 31, 2020				February 1, 2020				November 2, 2019					May 1, 2021				January 30, 2021				May 2, 2020
(in millions)	(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt:	Long-term debt:													Long-term debt:
Senior notes (Level 2)	Senior notes (Level 2)	$	146.7	$	130.8	$	146.4	$	144.8	$	146.3	$	139.3	Senior notes (Level 2)	$	146.8	$	150.8	$	146.7	$	145.1	$	146.5	$	97.1

Term loans (Level 2)	Term loans (Level 2)	99.5		100.0		99.5		100.0		99.4		100.0		Term loans (Level 2)	0		0		0		0		99.5		100.0

Total	Total	$	246.2	$	230.8	$	245.9	$	244.8	$	245.7	$	239.3	Total	$	146.8	$	150.8	$	146.7	$	145.1	$	246.0	$	197.1

18. Loans, overdrafts and long-term debt


(in millions)	(in millions)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	May 1, 2021		January 30, 2021		May 2, 2020
Debt:	Debt:							Debt:
Senior unsecured notes due 2024, net of unamortized discount	Senior unsecured notes due 2024, net of unamortized discount	$	147.6	$	147.5	$	147.5	Senior unsecured notes due 2024, net of unamortized discount	$	147.6	$	147.6	$	147.5
ABL revolving facility	ABL revolving facility	790.0		270.0		543.0		ABL revolving facility	0		0		1,090.0
FILO term loan facility	FILO term loan facility	100.0		100.0		100.0		FILO term loan facility	0		0		100.0

Other loans and bank overdrafts	Other loans and bank overdrafts	3.6		95.6		5.0		Other loans and bank overdrafts	0		0		22.2
Gross debt	Gross debt	$	1,041.2	$	613.1	$	795.5	Gross debt	$	147.6	$	147.6	$	1,359.7
Less: Current portion of loans and overdrafts	Less: Current portion of loans and overdrafts	(3.6)		(95.6)		(5.0)		Less: Current portion of loans and overdrafts	0		0		(22.2)
Less: Unamortized debt issuance costs	Less: Unamortized debt issuance costs	(1.4)		(1.6)		(1.7)		Less: Unamortized debt issuance costs	(0.8)		(0.9)		(1.5)
Total long-term debt	Total long-term debt	$	1,036.2	$	515.9	$	788.8	Total long-term debt	$	146.8	$	146.7	$	1,336.0

~~Table of Contents~~

~~Revolving credit facility and senior unsecured term loan (the~~ “~~Credit Facility~~”)

On September 27, 2019, in connection with the issuance of a new senior secured asset-based credit facility, the Company repaid and terminated the Credit Facility. Refer to the “Asset-based credit facility” section below. The original maturity of the Credit Facility was July 2021.

Senior unsecured notes due 2024

On May 19, 2014, Signet UK Finance plc (“Signet UK Finance”), a wholly owned subsidiary of the Company, issued $400 million aggregate principal amount of its 4.70% senior unsecured notes due in 2024 (the “Senior Notes”). The Senior Notes were issued under an effective registration statement previously filed with the SEC. The Senior Notes are jointly and severally guaranteed, on a full and unconditional basis, by the Company and by certain of the Company’s wholly owned subsidiaries (such subsidiaries, the “Guarantors”). ~~See Supplemental Guarantor Financial Information within Item 2 of this Form 10-Q for additional information.~~

On September 5, 2019, Signet UK Finance announced the commencement of a tender offer to purchase any and all of its outstanding Senior Notes (the “Tender Offer”). Upon receipt of the requisite consents from Senior Note holders, Signet UK Finance entered into a supplemental indenture which eliminated most of the restrictive covenants and certain default provisions of the indenture. The supplemental indenture became operative on September 27, 2019 upon the Company’s acceptance and payment for the Senior Notes previously validly tendered and not validly withdrawn pursuant to the Tender Offer for an aggregate principal amount of $239.6 million, which represented a purchase price of $950.00 per $1,000.00 in principal amount of the Senior Notes validly tendered.

Unamortized debt issuance costs relating to the Senior Notes as of ~~October 31, 2020~~May 1, 2021 was $0.8 million (January 30, 2021 and May 2, 2020: $0.9 million ~~(February 1, 2020~~ and ~~November 2, 2019: $1.1 million and $1.2~~$1.0 million, respectively). The unamortized debt issuance costs are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to debt issuance costs of $0.1 million ~~and $0.2 million,~~ was recorded as interest expense in the condensed consolidated statements of operations for the 13 ~~and 39~~ weeks ended ~~October 31, 2020, respectively~~May 1, 2021 ($~~0.2 million and $0.5~~0.1 million for the 13 ~~and 39~~ weeks ended ~~November~~May 2, ~~2019, respectively)~~2020).

Asset-based credit facility

On September 27, 2019, the Company entered into a senior secured asset-based credit facility consisting of (i) a revolving credit facility in an aggregate committed amount of $1.5 billion (“ABL Revolving Facility”) and (ii) a first-in last-out term loan facility in an aggregate principal amount of $100.0 million (the “FILO Term Loan Facility” and, together with the ABL Revolving Facility, the “ABL Facility”) pursuant to that certain credit agreement. The ABL Facility will mature on September 27, 2024.

Revolving loans under the ABL Revolving Facility are available in an aggregate amount equal to the lesser of the aggregate ABL revolving commitments and a borrowing base determined based on the value of certain inventory and credit card receivables, subject

Table of Contents

to specified advance rates and reserves. Indebtedness under the ABL Facility is secured by substantially all of the assets of the Company and its subsidiaries, subject to customary exceptions. Borrowings under the ABL Revolving Facility and the FILO Term Loan Facility, as applicable, bear interest at the Company’s option at either eurocurrency rate plus the applicable margin or a base rate plus the applicable margin, in each case depending on the excess availability under the ABL Revolving Facility. The Company had stand-by letters of credit outstanding of ~~$16.6~~$19.0 million on the ABL Revolving Facility as of ~~October 31, 2020.~~May 1, 2021. The Company had available borrowing capacity of ~~$483.1 million~~$1.2 billion on the ABL Revolving Facility as of ~~October 31, 2020.~~May 1, 2021.

As a result of the risks and uncertainties associated with the potential impacts of COVID-19 on the Company’s business, as a prudent measure to increase the Company’s financial flexibility and bolster its cash position, the Company borrowed an additional $900 million on the ABL Revolving Facility during the first quarter of Fiscal 2021. The Company made ABL Revolving Facility repayments during the third and fourth quarter of Fiscal 2021 and the outstanding amount borrowed under ABL Revolving Facility was fully paid down by the end of Fiscal 2021. During the fourth quarter of Fiscal 2021, the Company fully repaid the FILO Term Loan Facility.

If the excess availability under the ABL Revolving Facility falls below the threshold specified in the ABL Facility agreement, the Company will be required to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00. As of ~~October 31, 2020,~~May 1, 2021, the threshold related to the fixed coverage ratio was approximately ~~$132~~$124 million. The ABL Facility places certain restrictions upon the Company’s ability to, among other things, incur additional indebtedness, pay dividends, grant liens and make certain loans, investments and divestitures. The ABL Facility contains customary events of default (including payment defaults, cross-defaults to certain of the Company’s other indebtedness, breach of representations and covenants and change of control). The occurrence of an event of default under the ABL Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Facility.

Debt issuance costs relating to the ABL Revolving Facility totaled ~~$9.3 million, of which~~ $8.7 ~~million of these costs were allocated to the ABL Revolving Facility and $0.6 million was allocated to the FILO Term Loan Facility.~~million. The remaining unamortized debt issuance costs ~~for the ABL Revolving Facility~~ are recorded within other assets in the condensed consolidated balance ~~sheets and the remaining unamortized debt issuance costs for the FILO Term Loan Facility are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance~~ sheets. Amortization relating to the ~~ABL Facility~~ debt issuance costs of $0.5 ~~million and $1.4~~ million was recorded as interest expense in the condensed consolidated statements of operations for the 13 ~~and 39~~ weeks ended ~~October 31, 2020~~May 1, 2021 ($~~0.1~~0.4 million for the 13 ~~and 39~~ weeks ended ~~November~~May 2, ~~2019)~~2020). Unamortized debt issuance costs related to the ABL ~~facility~~Revolving Facility totaled ~~$7.3~~$5.9 million as of ~~October 31, 2020 (February~~May 1, ~~2020~~2021 (January 30, 2021 and ~~November~~May 2, ~~2019: $8.7~~2020: $6.4 million and ~~$9.2~~$7.7 million, respectively).

~~Other~~

~~As of October 31, 2020, February 1, 2020 and November 2, 2019, the Company was in compliance with all debt covenants.~~

~~Table of Contents~~

19. Warranty reserve

Specific merchandise sold by banners within the North America segment includes a product lifetime diamond or colored gemstone guarantee as long as six-month inspections are performed and certified by an authorized store representative. Provided the customer has complied with the six-month inspection policy, the Company will replace, at no cost to the customer, any stone that chips, breaks or is lost from its original setting during normal wear. Management estimates the warranty accrual based on the lag of actual claims experience and the costs of such claims, inclusive of labor and material. The warranty reserve for diamond and gemstone guarantee, included in accrued expenses and other current liabilities and other non-current liabilities, is as follows:


		13 weeks ended				39 weeks ended					13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(in millions)	May 1, 2021		May 2, 2020
Warranty reserve, beginning of period	Warranty reserve, beginning of period	$	37.3	$	34.1	$	36.3	$	33.2	Warranty reserve, beginning of period	$	37.3	$	36.3
Warranty expense	Warranty expense	1.5		5.4		5.5		11.4		Warranty expense	0.7		3.2
Utilized (1)	Utilized (1)	(2.2)		(3.0)		(5.2)		(8.1)		Utilized (1)	(2.5)		(2.2)
Warranty reserve, end of period	Warranty reserve, end of period	$	36.6	$	36.5	$	36.6	$	36.5	Warranty reserve, end of period	$	35.5	$	37.3

(1) Includes impact of foreign exchange translation.


(in millions)	(in millions)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	May 1, 2021		January 30, 2021		May 2, 2020
Disclosed as:	Disclosed as:							Disclosed as:
Current liabilities	Current liabilities	$	10.6	$	10.6	$	10.8	Current liabilities	$	10.2	$	10.7	$	11.0
Non-current liabilities	Non-current liabilities	26.0		25.7		25.7		Non-current liabilities	25.3		26.6		26.3
Total warranty reserve	Total warranty reserve	$	36.6	$	36.3	$	36.5	Total warranty reserve	$	35.5	$	37.3	$	37.3

20. Share-based compensation

Signet recorded share-based compensation expense of ~~$3.3 million and $9.6~~$8.0 million for the 13 ~~and 39~~ weeks ended ~~October 31, 2020, respectively,~~May 1, 2021 related to the Omnibus Plan and Share Saving Plans ($~~4.7 million and $13.0~~1.4 million for the 13 ~~and 39~~ weeks ended ~~November~~May 2, ~~2019, respectively)~~2020).

Table of Contents

21. Commitments and contingencies

Legal proceedings

Employment practices

~~As previously reported, in~~In March 2008, a group of private plaintiffs (the “Claimants”) filed a class action lawsuit for an unspecified amount against SJI, a subsidiary of Signet, in the US District Court for the Southern District of New York alleging that US store-level employment practices are discriminatory as to compensation and promotional activities with respect to gender. In June 2008, the District Court referred the matter to private arbitration where the Claimants sought to proceed on a class-wide basis. The Claimants filed a motion for class certification and SJI opposed the motion. On February 2, 2015, the arbitrator issued a Class Determination Award in which she certified for a class-wide hearing Claimants’ disparate impact declaratory and injunctive relief class claim under Title VII, with a class period of July 22, 2004 through date of trial for the Claimants’ compensation claims and December 7, 2004 through date of trial for Claimants’ promotion claims. The arbitrator otherwise denied Claimants’ motion to certify a disparate treatment class alleged under Title VII, denied a disparate impact monetary damages class alleged under Title VII, and denied an opt-out monetary damages class under the Equal Pay Act. On February 9, 2015, Claimants filed an Emergency Motion To Restrict Communications With The Certified Class And For Corrective Notice. SJI filed its opposition to Claimants’ emergency motion on February 17, 2015, and a hearing was held on February 18, 2015. Claimants’ motion was granted in part and denied in part in an order issued on March 16, 2015. Claimants filed a Motion for Reconsideration Regarding Title VII Claims for Disparate Treatment in Compensation on February 11, 2015, which SJI opposed. April 27, 2015, the arbitrator issued an order denying the Claimants’ Motion. SJI filed with the US District Court for the Southern District of New York a Motion to Vacate the Arbitrator’s Class Certification Award on March 3, 2015, which Claimants opposed. On November 16, 2015, the US District Court for the Southern District of New York granted SJI’s Motion to Vacate the Arbitrator’s Class Certification Award in part and denied it in part. On December 3, 2015, SJI filed with the United States Court of Appeals for the Second Circuit SJI’s Notice of Appeal of the District Court’s November 16, 2015 Opinion and Order. On November 25, 2015, SJI filed a Motion to Stay the AAA Proceedings while SJI ~~appeals~~appealed the decision of the US District Court for the Southern District of New York to the United States Court of Appeals for the Second Circuit, which Claimants opposed. The arbitrator issued an order denying SJI’s Motion to Stay on February 22, 2016. SJI filed its Brief and Special Appendix with the Second Circuit on March 16, 2016. The matter was fully briefed, and oral argument was heard by the U.S. Court of Appeals for the Second Circuit on November 2, 2016. On April 6, 2015, Claimants filed in the AAA Claimants’ Motion for Clarification or in the Alternative Motion for Stay of the Effect of the Class Certification Award as to the Individual

~~Table of Contents~~

Intentional Discrimination Claims, which SJI opposed. On June 15, 2015, the arbitrator granted the Claimants’ motion. On March 6, 2017, Claimants filed Claimants’ Motion for Conditional Certification of Claimants’ Equal Pay Act Claims and Authorization of Notice, which SJI opposed The arbitrator heard oral argument on Claimants’ Motion on December 18, 2015 and, on February 29, 2016, issued an Equal Pay Act Collective Action Conditional Certification Award and Order Re Claimants’ Motion For Tolling Of EPA Limitations Period, conditionally certifying Claimants’ Equal Pay Act claims as a collective action, and tolling the statute of limitations on EPA claims to October 16, 2003 to ninety days after notice ~~issues~~issued to the putative members of the collective action. SJI filed in the AAA a Motion To Stay Arbitration Pending The District Court’s Consideration Of Respondent’s Motion To Vacate Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period on March 10, 2016. SJI filed in the AAA a Renewed Motion To Stay Arbitration Pending The District Court’s Resolution Of Sterling’s Motion To Vacate Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period on March 31, 2016, which Claimants opposed. On April 5, 2016, the arbitrator denied SJI’s Motion. On March 23, 2016 SJI filed with the US District Court for the Southern District of New York a Motion To Vacate The Arbitrator’s Equal Pay Act Collective Action Conditional Certification Award And Order Re Claimants’ Motion For Tolling Of EPA Limitations Period, which Claimants opposed. SJI’s Motion was denied on May 22, 2016. On May 31, 2016, SJI filed a Notice Of Appeal of Judge Rakoff’s opinion and order to the Second Circuit Court of Appeals, which Claimant’s opposed. On June 1, 2017, the Second Circuit Court of Appeals dismissed SJI’s appeal for lack of appellate jurisdiction. Claimants filed a Motion For Amended Class Determination Award on November 18, 2015, and on March 31, 2016 the arbitrator entered an order amending the Title VII class certification award to preclude class members from requesting exclusion from the injunctive and declaratory relief class certified in the arbitration. The arbitrator issued a Bifurcated Case Management Plan on April 5, 2016 and ordered into effect the parties’ Stipulation Regarding Notice Of Equal Pay Act Collective Action And Related Notice Administrative Procedures on April 7, 2016. SJI filed in the AAA a Motion For Protective Order on May 2, 2016, which Claimants opposed. The matter was fully briefed, and oral argument was heard on July 22, 2016. The motion was granted in part on January 27, 2017. Notice to EPA collective action members was issued on May 3, 2016, and the opt-in period for these notice recipients closed on August 1, 2016. Approximately 10,314 current and former employees submitted consent forms to opt in to the collective action; however, some have withdrawn their consents. The number of valid consents is disputed and yet to be determined. SJI believes the number of valid consents to be approximately 9,124. On July 24, 2017, the United States Court of Appeals for the Second Circuit issued its unanimous Summary Order that held that the absent class members “never consented” to the Arbitrator determining the permissibility of class arbitration under the agreements, and remanded the matter to the District Court to determine whether the Arbitrator exceeded her authority by certifying the Title VII class that contained absent class members who had not opted in the litigation. On August 7, 2017, SJI filed its Renewed Motion to Vacate the Class Determination Award relative to absent class members with the District Court. The matter was fully briefed, and an oral

Table of Contents

argument was heard on October 16, 2017. On November 10, 2017, SJI filed in the arbitration motions for summary judgment, and for decertification, of Claimants’ Equal Pay Act and Title VII promotions claims. On January 30, 2018, oral argument on SJI’s motions was heard. On January 26, 2018, SJI filed in the arbitration a Motion to Vacate The Equal Pay Act Collective Action Award And Tolling Order asserting that the Arbitrator exceeded her authority by conditionally certifying the Equal Pay Act claim and allowing the absent claimants to opt-in the litigation. On March 12, 2018, the Arbitrator denied SJI’s Motion to Vacate The Equal Pay Act Collective Action Award and Tolling Order. SJI still has a pending motion seeking decertification of the EPA Collective Action before the Arbitrator. On March 19, 2018, the Arbitrator issued an Order partially granting SJI’s Motion to Amend the Arbitrator’s November 2, 2017, Bifurcated Seventh Amended Case Management Plan resulting in a continuance of the May 14, 2018 trial date. A new trial date has not been set. On January 15, 2018, District Court granted SJI’s August 17, 2017 Renewed Motion to Vacate the Class Determination Award finding that the Arbitrator exceeded her authority by binding non-parties (absent class members) to the Title VII claim. The District Court further held that the RESOLVE Agreement does not permit class action procedures, thereby, reducing the Claimants in the Title VII matter from 70,000 to potentially 254. Claimants ~~dispute~~disputed that the number of claimants in the Title VII is 254. On January 18, 2018, the Claimants filed a Notice of Appeal with the United States Court of Appeals for the Second Circuit. The appeal was fully briefed and oral argument before the Second Circuit occurred on May 7, 2018. On May 17, 2019, SJI submitted a Rule 28(j) letter to the Second Circuit addressing the effects of the Supreme Court’s ruling in Lamps Plus, Inc. v. Varela, No. 17-988 (S. Ct. Apr. 24, 2019), on the pending appeal. The Second Circuit then issued an order directing the parties to submit additional arguments on that issue, which were submitted. On November 18, 2019 the Second Circuit issued an order reversing and remanding the District Court’s January 15, 2018 Order that vacated the Arbitrator’s Class Determination Award certifying for declaratory and injunctive relief a Title VII pay and promotions class of female retail sales employees. The Second Circuit held that the District Court erred when it concluded that the Arbitrator exceeded her authority in purporting to bind absent class members to the Class Determination Award. The Second Circuit remanded the case to the District Court to decide the

narrower question of whether the Arbitrator erred in certifying an opt-out, as opposed to a mandatory, class for declaratory and injunctive relief. On December 2, 2019, SJI filed a petition for a hearing en banc with the United States Court of Appeals for the Second Circuit. On January 15, 2020, SJI filed a Rule 28(j) letter in the Second Circuit. On that same day the Second Circuit denied the petition for rehearing en banc. On January 21, 2020, Sterling filed its motion for stay of mandate with the Second Circuit pending the filing of a petition for writ of certiorari with the U.S. Supreme Court. On January 22, 2020, the Second Circuit granted Sterling’s motion for stay of mandate. SJI’s petition for a writ of certiorari from the U.S. Supreme Court was denied on ~~Octobere~~October 5, 2020. On January 27, 2021 the District Court ordered the case remanded to the AAA for further proceedings in arbitration.

~~Table of Contents~~

SJI denies the allegations of the Claimants and has been defending the case vigorously. At this point, no outcome or possible loss or range of losses, if any, arising from the litigation is able to be estimated.

~~As previously reported, on~~On May 5, 2017, without any findings of liability or wrongdoing, SJI entered into a Consent Decree with the EEOC settling a previously disclosed lawsuit that alleged that SJI engaged in intentional and disparate impact gender discrimination with respect to pay and promotions of female retail store employees since January 1, 2003. On May 5, 2017 the U.S. District Court for the Western District of New York approved and entered the Consent Decree jointly proposed by the EEOC and SJI, resolving all of the EEOC’s claims against SJI in this litigation for various injunctive relief including but not limited to the appointment of an employment practices expert to review specific policies and practices, a compliance officer to be employed by SJI, as well as obligations relative to training, notices, reporting and record-keeping. The Consent Decree does not require an outside third-party monitor or require any monetary payment. The duration of the Consent Decree was three years and three months, expiring on August 4, 2020. On March 6, 2020, SJI and the EEOC filed their Joint Motion to Approve an Amendment to And Extension of the Term of the Consent Decree, which provides for a limited extension of a few aspects of the Consent Decree terms regarding SJI’s compensation practices, and incorporating its implementation of a new retail team member compensation program into the overall Consent Decree framework. This extension will enable SJI to implement changes to its retail team member compensation strategy and validate that the new program is consistent with the overall purposes of the Consent Decree. On March 11, 2020 the U.S. District Court for the Western District of New York granted the joint motion and entered the parties’ Amendment to And Extension of the Term of the Consent Decree. The term of the amended Consent Decree expires on November 4, 2021.

Shareholder Actions

~~As previously reported, in~~In August 2016, 2 alleged Company shareholders each filed a putative class action complaint in the United States District Court for the Southern District of New York against the Company and its then-current Chief Executive Officer and current Chief Financial Officer (Nos. 16-cv-6728 and 16-cv-6861, the “S.D.N.Y. cases”). In 2017, 3 other Company shareholders each filed putative class action complaints (Nos. 17-cv-875, 17-cv-923, and 17-cv-9853) which were ultimately consolidated with the S.D.N.Y. cases under case number 16-cv-6728 (the “Consolidated Action”). The Consolidated Action was settled as further described below. The Consolidated Action alleged that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, misrepresenting the Company’s business and earnings by making misleading statements about the Company’s credit portfolio and failing to disclose reports of sexual harassment allegations that were raised by claimants in an ongoing pay and promotion gender discrimination class arbitration.

Table of Contents

On March 15, 2019, the lead plaintiff moved for appointment of a class representative and class counsel and for certification of a class period of August 29, 2013, through March 13, 2018. On July 10, 2019, the Court granted the motion and certified a class of all persons and entities who purchased or otherwise acquired Signet common stock from August 29, 2013 to May 25, 2017. The Court also appointed a class representative and class counsel.

On July 24, 2019, the defendants filed with the United States Court of Appeals for the Second Circuit a petition for permission to appeal the District Court’s class certification decision.

On March 16, 2020, the Company, all of the other defendant parties to the Consolidated Action, and the lead plaintiff entered into a settlement agreement in the Consolidated Action. The settlement of $240 million provides for the dismissal of the Consolidated Action with prejudice. The settlement agreement also states that the Company and all the other defendants expressly deny any and all allegations of fault, liability, wrongdoing, or damages whatsoever, and that defendants are entering into the settlement solely to eliminate the uncertainty, burden, and expense of further protracted litigation. As a result of the settlement, the Company recorded a charge of $33.2 million during the fourth quarter of Fiscal 2020 in other operating income, ~~(loss),~~net, which includes administration costs of $0.6 million and iswas recorded net of expected recoveries from the Company’s insurance carriers of $207.4 million. As of May 2, ~~2020 and February 1,~~ 2020, the liability related to settlement and administration fees was recorded in other current liabilities, and the expected insurance recoveries ~~are~~were recorded in other current assets in the condensed consolidated balance sheet. The settlement was fully funded in the second quarter of Fiscal 2021, and the Company contributed approximately $35 million of the $240 million settlement payment, net of insurance proceeds and including the impact of foreign currency. The Court granted final approval of the settlement on July 21, 2020.

In 2019, 4 actions were filed in the U.S. District Court for the Southern District of New York by investment funds that allegedly purchased the Company’s stock (Nos. 19-cv-2757, 19-cv-2758, 19-cv-9916 and 19-cv-9917), and name the Company and its current and former Chief Executive Officers and Chief Financial Officers as defendants. All 4 complaints allege violations of Sections 10(b), 18, and 20(a) of the Securities Exchange Act of 1934, and common law fraud largely based on the same allegations as the Consolidated Action. Soon thereafter the Court entered orders staying these actions until entry of final judgment in the Consolidated Action.

~~Table of Contents~~

On June 27, 2020, the Company and plaintiffs in the four stayed actions above reached a settlement in principle, which was finalized on July 10, 2020 requiring the Opt-Out Plaintiffs to rejoin the Consolidated Action. The Company recorded a pre-tax charge of $7.5 million, net of expected insurance recovery, during Fiscal 2021 in anticipation of those 4 settlements. The final amount of the settlement and net charge are dependent upon the amount the Opt-Out Plaintiffs receive as part of the Consolidated Action and is not expected to be materially different than the amounts recorded. The initial portion of the settlement due to the Opt-Out Plaintiffs under the settlement agreement was paid in August 2020.

~~Derivative Action~~

As previously reported, on September 1, 2017, Josanne Aungst filed a putative shareholder derivative action entitled Aungst v. Light, et al., No. CV-2017-3665, in the Court of Common Pleas for Summit County Ohio. The complaint in this action, which purported to have been brought by Ms. Aungst on behalf of22. Subsequent events

On May 17, 2021, the Company, named certain current and former directors and officers of the Company as defendants and alleged claims for breach of fiduciary duty, abuse of control, and gross mismanagement. The complaint challenged certain public disclosures and conduct relating to the allegations that were raised by the claimants in the Arbitration. The complaint also alleges that the Company’s share price was artificially inflated as a result of alleged misrepresentations and omissions. The defendants’ motion to dismiss the complaint was granted on February 28, 2019. Plaintiff appealed that dismissal in the Court of Appeals, Ninth Judicial District, Summit County, Ohio. On June 17, 2020, the Court of Appeals issued a decision affirming the dismissal. Plaintiff has not sought a discretionary appeal with the Supreme Court of Ohio, and the deadline for seeking any such appeal lapsed on August 3, 2020.

~~Regulatory Matters~~

~~As previously reported, on January 16, 2019,~~through its subsidiary Sterling Jewelers Inc., (“Sterling”)~~, a wholly owned subsidiary of Company, without admitting or denying any of the allegations, findings of fact, or conclusions of law (except to establish jurisdiction)~~, entered into ~~a Consent Order~~an Amended and Restated Credit Card Program Agreement (“Sterling Program Agreement”) with Comenity Bank (“Comenity Bank”), which amends and restates the Credit Card Program Agreement entered into by and between Sterling and Comenity on May 25, 2017. In addition, on May 17, 2021, the Company, through its subsidiary Zale Delaware, Inc., entered into an Amended and Restated Private Label Credit Card Program Agreement (“Zale Program Agreement” and together with the ~~Consumer Financial Protection Bureau (the "CFPB"~~Sterling Program Agreement, each a “Program Agreement” and collectively the “Program Agreements”) with Comenity Capital Bank (“Comenity Capital” and ~~New York Attorney General (the “NY AG”~~together with Comenity Bank, “Comenity”) ~~settling a previously disclosed investigation of certain in-store credit practices, promotions,~~, which amends and ~~payment protection products (the "Consent Order"). Among~~restates the Private Label Credit Card Program Agreement entered into by and among Zale, Zale Puerto Rico, Inc. and Comenity Capital on July 9, 2013. Each Program Agreement has an initial term from July 1, 2021 through December 31, 2025 and, unless terminated earlier by either party, automatically renews for successive two-year terms.

The Program Agreements provide for, among other things, that Comenity operate a primary source program to issue credit cards to all Sterling and Zale customers (including customers that would have been previously covered by the ~~Consent Order requires~~non-prime Investor agreements discussed in Note 11) to be serviced, maintained, administered, collected upon, and promoted in accordance with the terms therein (the "Primary Source Program"). Each Program Agreement includes a signing bonus, which may be repayable under certain conditions if such Program Agreement is terminated. The Program Agreements contain customary representations, warranties, and covenants. Upon expiration or termination by either party of a Program Agreement, Sterling or Zale, as applicable, retains the option to ~~(i) submit an accurate written compliance report~~purchase, or arrange the purchase by a third party of, the program assets from Comenity on customary terms and conditions.

In addition to the ~~CFPB; (ii) pay~~Program Agreements, on May 17, 2021, the Company, through Sterling, entered into an ~~$10,000,000 civil money penalty~~Amended and Restated Program Agreement (the “Genesis Agreement”) with Genesis FS Card Services, Inc. (“Genesis”), which amends and restates the Program Agreement entered into by and between Sterling and Genesis on July 26, 2018. The Genesis Agreement has an initial term from July 1, 2021 through December 31, 2025 and, unless terminated earlier by either party, automatically renews for successive one-year periods.

Table of Contents

Under the terms of the Genesis Agreement, Genesis will expand its role in originating, funding, administering and servicing a second look credit program to the CFPB; (iii) pay a $1,000,000 civil money penalty to the NY AG: and (iv) maintain policies and procedures related to the issuance of credit cards, including with respect to credit applications, credit financing terms and conditions, and any related add-on productsSterling customers that are ~~reasonably designed to ensure consumer knowledge or consent. All payments required by~~declined under Sterling's new Primary Source Program. Comenity and Genesis are longtime partners in the ~~Consent Order were made in February 2019. We continue to work to ensure compliance with~~Company’s credit provider structure, and are currently integrated into the ~~Consent Order, which may result in us incurring additional costs. See Item 1A~~Company’s point of ~~Signet’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020 filed with the SEC on March 26, 2020 for risks relating to the CFPB~~sale operations in-store and ~~our continued compliance with the Consent Order.~~online.

3632

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis in this Item 2 is intended to provide the reader with information that will assist in understanding the significant factors affecting the Company’s consolidated operating results, financial condition, liquidity and capital resources. This discussion should be read in conjunction with our condensed consolidated financial statements and notes to the condensed consolidated financial statements included in Item 1. This discussion contains forward-looking statements and information. The Company's actual results could materially differ from those discussed in these forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those discussed in the “Forward-Looking Statements” below and elsewhere in this report, as well as in the “Risk Factors” section within Signet’s Fiscal 2021 Annual Report on Form 10-K filed with the SEC on March 19, 2021.

This management's discussion and analysis provides comparisons of material changes in the condensed consolidated financial statements for 13 weeks ended May 1, 2021 and the 13 weeks ended May 2, 2020.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, based upon management’s beliefs and expectations as well as on assumptions made by and data currently available to management, appear in a number of places throughout this document and include statements regarding, among other things, Signet’s results of operation, financial condition, liquidity, prospects, growth, strategies and the industry in which Signet operates. The use of the words “expects,” “intends,” “anticipates,” “estimates,” “predicts,” “believes,” “should,” “potential,” “may,” "preliminary," “forecast,” “objective,” “plan,” or “target,” and other similar expressions are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties which could cause the actual results to not be realized, including, but not limited to:the negative impacts that the COVID-19 pandemic has had, and ~~will continue~~continues to have, on Signet’s business, financial condition, profitability and cash flows; the effect of steps we take in response to the pandemic; the severity, duration and ~~duration~~potential resurgence of the pandemic, including ~~whether there is a “second wave” and~~ whether it is necessary to temporarily reclose our stores, distribution centers and corporate facilities or for our suppliers and vendors to temporarily reclose their facilities; the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein, including without limitation risks relating to disruptions in our supply chain (specifically in India), consumer behaviors such as ~~spending and~~ willingness to congregate in shopping centers and shifts in spending away from the jewelry category and the impact on demand of our products, our level of indebtedness and covenant compliance, availability of adequate capital, our ability to execute our business plans, our lease obligations and relationships with our landlords, and asset impairments; general economic or market conditions; financial market risks; our ability to optimize Signet's transformation ~~initiative;~~strategies; a decline in consumer spending or deterioration in consumer financial position; changes to regulations relating to customer credit; disruption in the availability of credit for customers and customer inability to meet credit payment obligations; our ability to achieve the benefits related to the outsourcing of the credit portfolio, ~~sale~~including due to technology disruptions, future financial results and operating results and/or disruptions arising from changes to or termination of the relevant non-prime outsourcing agreement requiring transition to alternative arrangements through other providers or alternative payment ~~options;~~options and our ability to successfully establish future arrangements for the forward-flow receivables; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of long-lived assets or intangible assets or other adverse financial consequences; the volatility of our stock price; the impact of financial covenants, credit ratings or interest volatility on our ability to borrow; our ability to maintain adequate levels of liquidity for our cash needs, including debt obligations, payment of dividends, and capital expenditures as well as the ability of our customers, suppliers and lenders to access sources of liquidity to provide for their own cash needs; changes in our credit rating; potential regulatory changes, global economic conditions or other developments related to the United Kingdom’s exit from the European Union; exchange rate fluctuations; the cost, availability of and demand for diamonds, gold and other precious metals; stakeholder reactions to disclosure regarding the source and use of certain minerals; seasonality of Signet’s business; the merchandising, pricing and inventory policies followed by Signet and failure to manage inventory levels; Signet’s relationships with suppliers including the ability to continue to utilize extended payment terms and the ability to obtain merchandise that customers wish to purchase; the failure to adequately address the impact of existing tariffs and/or the imposition of additional duties, tariffs, taxes and other charges or other barriers to trade or impacts from trade relations; the level of competition and promotional activity in the jewelry sector; our ability to optimize Signet's multi-year strategy to gain market share, expand and improve existing services, innovate and achieve sustainable, long-term growth; the ~~development~~maintenance and ~~maintenance~~continued innovation of Signet’s OmniChannel retailing and ability to increase digital sales; changes in consumer attitudes regarding jewelry and failure to anticipate and keep pace with changing fashion trends; changes in the supply and consumer acceptance of and demand for gem quality lab created diamonds and adequate identification of the use of substitute products in our jewelry; ability to execute successful marketing programs and manage social media; the ability to optimize Signet’s real estate footprint; the ability to satisfy the accounting requirements for “hedge accounting,” or the default or insolvency of a counterparty to a hedging contract; the performance of and ability to recruit, train, motivate and retain qualified sales associates; management of social, ethical and environmental risks; the reputation of Signet and its banners; inadequacy in and disruptions to internal controls and systems, including related to the migration to a new ~~financial reporting~~ information technology ~~system;~~systems which impact financial reporting; security breaches and other disruptions to Signet’s information technology infrastructure and databases; an

Table of Contents

adverse development in legal or regulatory proceedings or tax matters, including any new claims or litigation brought by employees, suppliers, consumers or shareholders, regulatory initiatives or investigations, and ongoing compliance with regulations and any consent orders or other legal or regulatory decisions; failure to comply with labor regulations; collective bargaining activity; changes in corporate taxation rates, laws, rules or practices in the US and jurisdictions in which Signet’s subsidiaries are incorporated, including developments related to the tax treatment of companies engaged in Internet ~~commerce;~~commerce or deductions associated with payments to foreign related parties that are subject to a low effective tax rate; risks related to international laws and Signet being a Bermuda corporation; difficulty or delay in executing or integrating an acquisition, business combination, major business or strategic initiative; risks relating to the outcome of pending litigation; our ability to protect our intellectual property or physical assets; changes in assumptions used in making accounting estimates relating to items such as extended service plans and pensions; ~~the success of recent changes in Signet’s executive management team;~~ or the impact of weather-related incidents, natural disasters, strikes, protests, riots or terrorism, acts of war or another public health crisis or disease outbreak, epidemic or pandemic on Signet’s business.

For a discussion of these and other risks and uncertainties which could cause actual results to differ materially from those expressed in any forward looking statement, see the “Risk Factors” and “Forward-Looking Statements” sections of Signet’s Fiscal ~~2020~~2021 Annual

~~Table of Contents~~

Report on Form 10-K filed with the SEC on March ~~26, 2020~~19, 2021 and quarterly reports on Form 10-Q and the “Safe Harbor Statements” in current reports on Form 8-K filed with the SEC. Signet undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required by law.

OVERVIEW

Signet Jewelers Limited (“Signet” or the “Company”) is the world’s largest retailer of diamond jewelry. Signet is incorporated in Bermuda and its address and telephone number are shown on the cover of this document. Its corporate website is www.signetjewelers.com, from where documents that the Company is required to file or furnish with the US Securities and Exchange Commission (“SEC”) may be viewed or downloaded free of charge.

Bermuda. The Company, with ~~2,893~~2,833 stores and kiosks as of ~~October 31, 2020,~~May 1, 2021, manages its business by geography, a description of which follows:

•The North America segment has ~~2,436~~2,385 locations in the US and ~~103~~97 locations in Canada as of ~~October 31, 2020.~~May 1, 2021.

◦In the US, the segment primarily operates in malls and off-mall locations under the following banners: Kay (Kay Jewelers and Kay Outlet); Zales (Zales Jewelers and Zales Outlet); Jared (Jared The Galleria Of Jewelry and Jared Vault); ~~James Allen;~~JamesAllen.com; and ~~a variety of mall-based regional banners.~~Rocksbox. Additionally, in the US, the segment operates mall-based kiosks under the Piercing Pagoda banner.

◦In Canada, the segment primarily operates under the Peoples banner (Peoples Jewellers).

•The International segment has ~~354~~351 stores in the UK, Republic of Ireland and Channel Islands as of ~~October 31, 2020. The segment primarily operates in shopping malls and off-mall locations under the H.Samuel and Ernest Jones banners.~~May 1, 2021.

Certain Company activities ~~(e.g. diamond sourcing)~~ are managed in the “Other” segment for financial reporting ~~purposes. The~~purposes, including the Company’s diamond sourcing function ~~includes~~and its diamond polishing factory in Botswana. See Note 4 of Item 1 for additional information regarding the Company’s reportable segments.

Impacts of COVID-19 ~~to Signet’s business~~

In December 2019, a novel coronavirus (“COVID-19”) was identified in Wuhan, China. In March 2020, the World Health Organization declared COVID-19 a global pandemic as a result of the further spread of the virus into all regions of the world, including those regions where the Company’s primary operations occur in North America and the UK. COVID-19 has significantly impacted consumer traffic and the Company’s retail sales, based on the perceived public health risk and government-imposed quarantines and restrictions of public gatherings and commercial activity to contain spread of the virus.

Effective March 23, 2020, the Company temporarily closed all of its stores in North America, its diamond operations in New York and its support centers in the United States. Additionally, effective March 24, 2020, the Company temporarily closed all of its stores in the UK. The COVID-19 pandemic has also disrupted the Company’s global supply chain, including the temporary closure of the Company’s diamond polishing operations in Botswana, and may cause additional disruptions to operations if employees of the Company become sick, are quarantined, or are otherwise limited in their ability to work at Company locations or travel for business. WhileDuring Fiscal 2021, the Company experienced ~~a temporary~~significant disruption to its business, specifically in its ~~James Allen New York distribution center,~~retail store operations through temporary closures during the first half of last year. By the end of the third quarter of Fiscal 2021, the Company ~~has continued to fill~~had re-opened substantially all of its ~~eCommerce orders~~stores. However, during ~~Fiscal 2021.~~

~~The COVID-19 pandemic has significantly altered~~ the retail climate and the Company is navigating that change by accelerating its application of the key Path to Brilliance initiatives developed over the past two years including the Company’s focus on becoming an OmniChannel leader, meeting the needs of its customers, removing non-customer facing costs, and accelerating the optimization of its real estate footprint. The Company continues to maintain its cost diligence efforts and net structural cost savings are on track to exceed $100 million in Fiscal 2021. Total three-year net cost savings through the endfourth quarter of Fiscal 2021, ~~related~~both the UK and certain Canadian provinces re-established mandated temporary closure of non-essential businesses. The UK stores began to ~~the Company’s Path to Brilliance are expected~~reopen in April 2021, while certain Canadian stores continue to be ~~at least $285 million compared to its original target~~impacted by these government restrictions through the date of ~~$225 million. To date in Fiscal 2021, the Company has closed 316 store locations under the acceleration of these real estate initiatives.~~this report. The Company continues to actively monitor and manage the situation related to its store and support center operations at the local level focusing on the best interests of its employees, customers, suppliers and shareholders. ~~Beginning in May, Signet initiated a measured approach~~

The COVID-19 pandemic significantly altered the retail climate and the Company has been navigating that change by accelerating its application of the key strategic initiatives developed over the past three years including the Company’s focus on becoming an OmniChannel leader, focusing on the needs of its customers, removing non-customer facing costs, and optimizing its real estate footprint. The Company continues to ~~store re-openings based on health~~maintain its cost diligence efforts and ~~safety standards, as well as regional customer demand. As of~~the three-year net structural cost savings through the end of the third quarter, the Company had re-opened substantially all of its stores in North America and the UK. At the beginning of November 2020, the UK re-established mandated temporary closure of non-essential businesses, which is currently expected to continue for four weeks until early December 2020. Management does not currently expect this disruption in the UK to have a material impact to its fourth quarter or full year Fiscal 2021 ~~results of operations; however, the re-opening of these locations will continue to be monitored closely, with a priority and focus on safety.~~

~~Table of Contents~~

~~Signet’s sales grew 9.5% during the third quarter of Fiscal 2021 compared~~related to the ~~prior comparable quarter, reflecting a combination of factors including the continued traction of Signet's~~Company’s Path to Brilliance strategies, the Company's ability to capture pent up demand from the second quarter, as well as intentional marketing and promotional efforts to drive early holiday demand, helping to mitigate traditionally high traffic days. Higher conversion rates and transaction values, both online and in-store, also helped to drive overall sales performance during the third quarter. It is not clear what the full extent of the COVID-19 impacts will have on the Company’s business during the fourth quarter or longer term; however, the Company expects that sales during the Holiday Season could be negatively impacted as a result of weaker retail store traffic trends, COVID-19 social distancing capacity constraints, and further temporary store closures due to virus trends.transformation plan were approximately $300 million.

During Fiscal 2021, the Company ~~has~~ also ~~taken~~took numerous actions to maximize its financial flexibility, bolster its cash position and reduce operating expenditures, both strategically and as temporary measures as a result of COVID-19. Refer to the Liquidity and Capital Resources section ~~below.~~below for further information.

Table of Contents

Outlook

Signet’s same store sales grew 106.5% during the first quarter of Fiscal 2022 compared to the comparable quarter of Fiscal 2021, reflecting a combination of traction from strategic initiatives as well as tailwinds from stimulus, tax refunds and consumer enthusiasm on the heels of vaccine rollouts. Higher conversion rates and transaction values, both online and in-store, also helped to drive overall sales performance during the first quarter of Fiscal 2022. During the remainder of Fiscal 2022, the Company will continue implementing its Inspiring Brilliance strategies, which are focused on sustainable, industry-leading growth. As described in the Purpose and Strategy section within Item 1 of Annual Report on Form 10-K for the year ended January 30, 2021 filed with the SEC on March 19, 2021, through its Inspiring Brilliance strategies, the Company will focus on leveraging its core strengths that it developed over the past three years with the goal of creating a broader mid-market and increasing Signet’s share of that larger market as the industry leader.

The full extent of the COVID-19 pandemic impacts on the Company’s business during the remainder of Fiscal 2022 or longer term, and whether the strong results in the first quarter of Fiscal 2022 will continue, especially toward the latter part of Fiscal 2022, remains unclear. As the vaccine rollout matures, the Company believes there will be a shift of consumer discretionary spending away from the jewelry category toward experience-oriented categories, the magnitude and timing of which is difficult to predict. As such, the Company is planning for increased marketing expenses to continue to fuel momentum from the first half of Fiscal 2022 as well as to proactively manage against shifts in consumer spending as the year progresses.

In addition, continued uncertainties exist that could impact the Company’s result of operations or cash flows in Fiscal 2022, such as potential resurgence of COVID-19 in key trade areas, extended duration of heightened unemployment, supply chain disruptions and macro or governmental influences on consumers’ ability to spend.

~~Non-GAAP Measures~~NON-GAAP MEASURES

Signet provides certain non-GAAP information in reporting its financial results to give investors additional data to evaluate its operations. The Company believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating historical trends and current period performance. For these reasons, internal management reporting also includes non-GAAP measures. Items may be excluded from GAAP financial measures when the Company believes this provides greater clarity to management and investors.

These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for the GAAP financial measures presented in the Company’s financial statements and other publicly filed reports. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies.

1. Net cash (debt)

Net cash (debt) is a non-GAAP measure defined as the total of cash and cash equivalents less loans, overdrafts and long-term debt. Management considers this metric to be helpful in understanding the total indebtedness of the Company after consideration of liquidity available from cash balances on-hand.


(in millions)	(in millions)	October 31, 2020		February 1, 2020		November 2, 2019		(in millions)	May 1, 2021		January 30, 2021		May 2, 2020
Cash and cash equivalents	Cash and cash equivalents	$	1,332.6	$	374.5	$	188.6	Cash and cash equivalents	$	1,298.4	$	1,172.5	$	1,066.6
Less: Loans and overdrafts	Less: Loans and overdrafts	(3.6)		(95.6)		(5.0)		Less: Loans and overdrafts	—		—		(22.2)
Less: Long-term debt	Less: Long-term debt	(1,036.2)		(515.9)		(788.8)		Less: Long-term debt	(146.8)		(146.7)		(1,336.0)
Net cash (debt)	Net cash (debt)	$	292.8	$	(237.0)	$	(605.2)	Net cash (debt)	$	1,151.6	$	1,025.8	$	(291.6)

Table of Contents

2. Free cash flow

Free cash flow is a non-GAAP measure defined as the net cash provided by operating activities less purchases of property, plant and equipment. Management considers this helpful in understanding how the business is generating cash from its operating and investing activities that can be used to meet the financing needs of the business. Free cash flow is an indicator frequently used by management in evaluating its overall liquidity and determining appropriate capital allocation strategies. Free cash flow does not represent the residual cash flow available for discretionary ~~expenditures.~~purposes.

13 weeks ended 39 weeks ended
(in millions) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Net cash provided by operating activities $ 450.6 $ (133.1) $ 606.7 $ 113.5
Purchase of property, plant and equipment (17.5) (43.1) (41.1) (95.3)
Free cash flow $ 433.1 $ (176.2) $ 565.6 $ 18.2

~~Table of Contents~~


	13 weeks ended
(in millions)	May 1, 2021		May 2, 2020
Net cash provided by (used in) operating activities	$	161.1	$	(7.6)
Purchase of property, plant and equipment	(11.3)		(7.7)
Free cash flow	$	149.8	$	(15.3)

3. Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA

EBITDA is a non-GAAP measure defined as earnings before interest and income taxes (operating income), depreciation and amortization. EBITDA is an important indicator of operating performance as it excludes the effects of financing and investing activities by eliminating the effects of interest, depreciation and amortization costs. Adjusted EBITDA, as revised by the Company in Fiscal 2021, is a non-GAAP measure, ~~which further excludes the impact of significant~~defined as earnings before interest and ~~unusual items which~~income taxes, depreciation and amortization, share-based compensation expense, and certain non-GAAP accounting adjustments. Reviewed in conjunction with net income (loss) and operating income (loss), management believes ~~are not necessarily reflective of operational performance during a period. Management believes these financial measures enhance~~that EBITDA and Adjusted EBITDA help in enhancing investors’ ability to evaluate and analyze trends ~~in the~~regarding Signet’s business and ~~evaluate~~ performance ~~relative to other companies. Management also utilizes these metrics to evaluate~~based on its current ~~credit profile, which is a view consistent~~operations. The revisions made in Fiscal 2021 and the Company’s overall methodology are further described in Item 7 of the Signet’s Fiscal 2021 Annual Report on Form 10-K. All periods below have been presented consistently with ~~rating agency methodologies.~~the revised calculation of Adjusted EBITDA, as defined above.


		13 weeks ended				39 weeks ended					13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(in millions)	May 1, 2021		May 2, 2020
Net income (loss)	Net income (loss)	$	9.3	$	(35.5)	$	(269.5)	$	(81.6)	Net income (loss)	$	138.4	$	(197.1)
Income tax expense (benefit)	Income tax expense (benefit)	21.3		(6.0)		(105.4)		(3.7)		Income tax expense (benefit)	26.5		(109.5)
Other non-operating income, net	Other non-operating income, net	—		(7.0)		(0.3)		(7.5)		Other non-operating income, net	(0.1)		(0.1)
Interest expense, net	Interest expense, net	9.1		8.6		25.6		27.9		Interest expense, net	3.9		7.1
Depreciation and amortization	Depreciation and amortization	45.5		43.7		130.3		129.5		Depreciation and amortization	42.1		37.3
Amortization of unfavorable leases and contracts		(1.4)		(1.4)		(4.1)		(4.1)
Amortization of unfavorable contracts										Amortization of unfavorable contracts	(1.4)		(1.4)
EBITDA	EBITDA	$	83.8	$	2.4	$	(223.4)	$	60.5	EBITDA	$	209.4	$	(263.7)
Share-based compensation										Share-based compensation	8.0		1.4
Other accounting adjustments										Other accounting adjustments
Restructuring charges - cost of sales	Restructuring charges - cost of sales	2.0		1.4		1.4		5.8		Restructuring charges - cost of sales	—		(0.4)
Restructuring charges	Restructuring charges	3.6		9.2		45.2		59.4		Restructuring charges	(0.7)		12.7
Asset impairments		1.5		—		158.1		47.7
Asset impairments, net (1)										Asset impairments, net (1)	(0.2)		136.3
Rocksbox acquisition-related costs										Rocksbox acquisition-related costs	1.1		—
Shareholder settlement	Shareholder settlement	—		—		7.5		—		Shareholder settlement	—		8.5
Adjusted EBITDA	Adjusted EBITDA	$	90.9	$	13.0	$	(11.2)	$	173.4	Adjusted EBITDA	$	217.6	$	(105.2)

(1) Includes asset impairments, net recorded due to the various impacts of COVID-19 to the Company’s business and related gains on terminations or modifications of leases, resulting from previously recorded impairments of the right of use assets in Fiscal 2021.

Table of Contents

4. Non-GAAP operating income (loss)

Non-GAAP operating income (loss) is a non-GAAP measure defined as operating income (loss) excluding the impact of significant and unusual items which management believes are not necessarily reflective of operational performance during a period. Management finds the information useful when analyzing financial results in order to appropriately evaluate the performance of the business without the impact of significant and unusual items. In particular, management believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.


		13 weeks ended				39 weeks ended					13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019		(in millions)	May 1, 2021		May 2, 2020
Operating income (loss)	Operating income (loss)	$	39.7	$	(39.9)	$	(349.6)	$	(64.9)	Operating income (loss)	$	168.7	$	(299.6)

Restructuring charges - cost of sales	Restructuring charges - cost of sales	2.0		1.4		1.4		5.8		Restructuring charges - cost of sales	—		(0.4)
Restructuring charges	Restructuring charges	3.6		9.2		45.2		59.4		Restructuring charges	(0.7)		12.7
Asset impairments		1.5		—		158.1		47.7
Asset impairments, net (1)										Asset impairments, net (1)	(0.2)		136.3
Rocksbox acquisition-related costs										Rocksbox acquisition-related costs	1.1		—
Shareholder settlement	Shareholder settlement	—		—		7.5		—		Shareholder settlement	—		8.5
Non-GAAP operating income (loss)	Non-GAAP operating income (loss)	$	46.8	$	(29.3)	$	(137.4)	$	48.0	Non-GAAP operating income (loss)	$	168.9	$	(142.5)

4037

Table of Contents

RESULTS OF OPERATIONS

The following should be read in conjunction with the financial statements and related notes in Item 1 of this Quarterly Report on Form 10-Q, as well as the financial and other information included in Signet’s Fiscal ~~2020~~2021 Annual Report on Form 10-K. Same store sales are based on sales from stores which have been open for at least 12 months. Same store sales as presented below have not been adjusted for the closure period resulting from COVID-19 as described above. Same store sales also include eCommerce sales for the period and comparative figures from the anniversary of the launch of the relevant website. Non-same store sales represent primarily sales from permanently closed stores during the current period, new stores not yet opened for 12 months, and the impacts of service plan revenue recognition.

Comparison of ~~Third~~First Quarter Fiscal ~~2021~~2022 to ~~Prior Year~~First Quarter Fiscal 2021

•Same store sales: Up ~~15.1%~~106.5%.

•Total sales: ~~$1.30~~$1.69 billion, increased ~~9.5%~~98.2%.

•Operating income (loss): ~~$39.7~~$168.7 million compared to ~~$(39.9) million.~~$(299.6) million in the prior year.

•Diluted earnings (loss) per share: ~~$0.02~~$2.23 compared to ~~$(0.84)~~$(3.96) in the prior year.

~~Comparison of Third Quarter Fiscal 2021 Year to Date to Prior Year~~

•~~Same store sales: Down 20.4%.~~

•~~Total sales: $3.04 billion, decreased 23.7%.~~

•~~Operating income (loss): $(349.6) compared to $(64.9) million.~~

•~~Diluted earnings (loss) per share: $(5.67) compared to $(2.05) in prior year.~~


		Third Quarter								Year to Date									First Quarter
		Fiscal 2021				Fiscal 2020				Fiscal 2021				Fiscal 2020					Fiscal 2022				Fiscal 2021
(in millions)	(in millions)	$		% of sales		$		% of sales		$		% of sales		$		% of sales		(in millions)	$		% of sales		$		% of sales
Sales	Sales	$	1,300.3	100.0	%	$	1,187.7	100.0	%	$	3,040.4	100.0	%	$	3,983.8	100.0	%	Sales	$	1,688.8	100.0	%	$	852.1	100.0	%
Cost of sales	Cost of sales	(863.8)		(66.4)		(818.6)		(68.9)		(2,176.0)		(71.6)		(2,652.2)		(66.6)		Cost of sales	(1,010.4)		(59.8)		(648.3)		(76.1)
Restructuring charges - cost of sales	Restructuring charges - cost of sales	(2.0)		(0.2)		(1.4)		(0.1)		(1.4)		—		(5.8)		(0.1)		Restructuring charges - cost of sales	—		—		0.4		—
Gross margin	Gross margin	434.5		33.4		367.7		31.0		863.0		28.4		1,325.8		33.3		Gross margin	678.4		40.2		204.2		24.0
Selling, general and administrative expenses	Selling, general and administrative expenses	(389.3)		(29.9)		(398.4)		(33.5)		(1,013.6)		(33.3)		(1,285.0)		(32.3)		Selling, general and administrative expenses	(512.0)		(30.3)		(358.4)		(42.1)

Restructuring charges	Restructuring charges	(3.6)		(0.3)		(9.2)		(0.8)		(45.2)		(1.5)		(59.4)		(1.5)		Restructuring charges	0.7		—		(12.7)		(1.5)
Asset impairments		(1.5)		(0.1)		—		—		(158.1)		(5.2)		(47.7)		(1.2)
Other operating income (loss)		(0.4)		—		—		—		4.3		0.1		1.4		—
Asset impairments, net																		Asset impairments, net	(1.5)		(0.1)		(136.3)		(16.0)
Other operating income, net																		Other operating income, net	3.1		0.2		3.6		0.4
Operating income (loss)	Operating income (loss)	39.7		3.1		(39.9)		(3.4)		(349.6)		(11.5)		(64.9)		(1.6)		Operating income (loss)	168.7		10.0		(299.6)		(35.2)
Interest expense, net	Interest expense, net	(9.1)		(0.7)		(8.6)		(0.7)		(25.6)		(0.8)		(27.9)		(0.7)		Interest expense, net	(3.9)		(0.2)		(7.1)		(0.8)
Other non-operating income, net	Other non-operating income, net	—		—		7.0		0.6		0.3		—		7.5		0.2		Other non-operating income, net	0.1		—		0.1		—
Income (loss) before income taxes	Income (loss) before income taxes	30.6		2.4		(41.5)		(3.5)		(374.9)		(12.3)		(85.3)		(2.1)		Income (loss) before income taxes	164.9		9.8		(306.6)		(36.0)
Income tax benefit (expense)	Income tax benefit (expense)	(21.3)		(1.6)		6.0		0.5		105.4		3.5		3.7		0.1		Income tax benefit (expense)	(26.5)		(1.6)		109.5		12.9
Net income (loss)	Net income (loss)	$	9.3	0.7	%	$	(35.5)	(3.0)	%	$	(269.5)	(8.9)	%	$	(81.6)	(2.0)	%	Net income (loss)	$	138.4	8.2	%	$	(197.1)	(23.1)	%
Dividends on redeemable convertible preferred shares	Dividends on redeemable convertible preferred shares	(8.4)		nm		(8.2)		nm		(24.9)		nm		(24.6)		nm		Dividends on redeemable convertible preferred shares	(8.6)		nm		(8.2)		nm
Net income (loss) attributable to common shareholders	Net income (loss) attributable to common shareholders	$	0.9	0.1	%	$	(43.7)	(3.7)	%	$	(294.4)	(9.7)	%	$	(106.2)	(2.7)	%	Net income (loss) attributable to common shareholders	$	129.8	7.7	%	$	(205.3)	(24.1)	%

nm Not meaningful.

~~Third~~First quarter sales

Signet's total sales increased ~~9.5%~~98.2% year over year to ~~$1.30~~$1.69 billion in the 13 weeks ended ~~October 31, 2020 compared to the prior year quarter.~~May 1, 2021. Total sales at constant exchange rates increased ~~9.0%~~96.4%. Signet’s same store sales increased ~~15.1%~~106.5%, compared to ~~an increase~~a decrease of ~~2.1%~~38.9% in the prior year quarter.

~~Table of Contents~~

This growth reflects a combination of ~~factors including the continued~~ traction ~~of Signet's Path to Brilliance strategies, the Company's ability to capture pent up demand~~ from ~~the second quarter,~~strategic initiatives as well as ~~intentional marketing~~jewelry market trends being currently strong, benefiting from stimulus and ~~promotional efforts~~rollout of vaccines returning shoppers to ~~drive early holiday demand, helping to mitigate traditionally high traffic days. Sales were unfavorably impacted by permanent store closures of $59 million during~~ the ~~third quarter.~~mall.

eCommerce sales in the ~~third~~first quarter of Fiscal 2022 were ~~$238.8~~$346.3 million, up ~~$99.5~~$181.6 million or ~~71.4%~~110.3%, compared to ~~$139.3~~$164.7 million in the prior year quarter. eCommerce sales accounted for ~~18.4%~~20.5% of ~~third~~first quarter sales, up from ~~11.7%~~19.3% of total sales in the prior year ~~third~~first quarter. Brick and mortar same store sales ~~increase 6.8%~~increased 105.7% from prior year ~~third~~first quarter.

The increase in eCommerce sales reflects the accelerated enhancement of eCommerce capabilities and a digital first focus, ~~during~~related to the ~~third quarter.~~Connected Commerce strategies, that began in Fiscal 2021 and is resonating with customers. The brick and mortar sales increase was ~~primarily the result~~driven by a combination of factors including new product launches and expanded customization options during the ~~third~~first quarter of Fiscal ~~2021. The Company began reopening stores~~2022. In addition, sales in ~~May 2020 and as of~~all channels were negatively impacted in the ~~end of the third~~first quarter of Fiscal 2021 ~~substantially~~by the temporary closures of all stores in March 2020.

Table of ~~the Company’s brick and mortar stores had resumed in-person operations.~~Contents

The breakdown of the sales performance by segment is set out in the table below:


		Change from previous year													Change from previous year
Third Quarter of Fiscal 2021		Same store sales		Non-same store sales, net		Total sales at constant exchange rate		Exchange translation impact		Total sales as reported		Total sales (in millions)
First Quarter of Fiscal 2022														First Quarter of Fiscal 2022	Same store sales		Non-same store sales, net		Total sales at constant exchange rate		Exchange translation impact		Total sales as reported		Total sales (in millions)

North America segment	North America segment	15.8	%	(5.3)	%	10.5	%	—	%	10.5	%	$	1,182.7	North America segment	117.2	%	(10.5)	%	106.7	%	0.4	%	107.1	%	$	1,618.0

International segment	International segment	7.8	%	(11.8)	%	(4.0)	%	4.6	%	0.6	%	$	106.9	International segment	(12.2)	%	(7.1)	%	(19.3)	%	7.7	%	(11.6)	%	$	57.4
Other segment (1)	Other segment (1)	nm		nm		nm		nm		nm		$	10.7	Other segment (1)	nm		nm		nm		nm		nm		$	13.4
Signet	Signet	15.1	%	(6.1)	%	9.0	%	0.5	%	9.5	%	$	1,300.3	Signet	106.5	%	(10.1)	%	96.4	%	1.8	%	98.2	%	$	1,688.8

(1) Includes sales from Signet’s diamond sourcing initiative.

nm Not meaningful.

Average merchandise transaction value (“ATV”) is defined as net merchandise sales on a same store basis divided by the total number of customer transactions. As such, changes from the prior year do not recompute within the table below.

Average Merchandise Transaction Value(1)(2)
Merchandise Transactions
Average Value Change from previous year Change from previous year
Third Quarter of Fiscal 2021 Fiscal 2021 Fiscal 2020 Fiscal 2021 Fiscal 2020 Fiscal 2021 Fiscal 2020
North America segment $ 427 $ 414 0.5 % 0.5 % 14.3 % 2.8 %
International segment(3)
£ 173 £ 144 17.7 % (1.4) % (7.6) % (4.3) %


	Average Merchandise Transaction Value(1)(2)								Merchandise Transactions
	Average Value				Change from previous year				Change from previous year
First Quarter	Fiscal 2022		Fiscal 2021		Fiscal 2022		Fiscal 2021		Fiscal 2022		Fiscal 2021







North America segment	$	418	$	359	15.2	%	(6.5)	%	90.0	%	(34.5)	%


International segment (3)	£	165	£	150	5.8	%	2.7	%	(16.6)	%	(41.2)	%

(1) Net merchandise sales within the North America segment include all merchandise product sales, net of discounts and returns. In addition, excluded from net merchandise sales are sales tax in the US, repair, extended service plan, insurance, employee and other miscellaneous sales.

(2) Net merchandise sales within the International segment include all merchandise product sales, including value added tax (“VAT”), net of discounts and returns. In addition, excluded from net merchandise sales are repairs, warranty, insurance, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in same store sales.

(3) Amounts for the International segment are denominated in British pounds.

North America sales

The North America segment’s total sales were ~~$1.18~~$1.62 billion compared to ~~$1.07~~$0.78 billion in the prior year, or an increase of ~~10.5%~~107.1%. Same store sales increased ~~15.8%~~117.2% compared to ~~an increase~~a decrease of ~~2.9%~~39.0% in the prior year. North America’s ATV ~~increased 0.5%, while the~~and number of transactions increased ~~14.3%. In addition to~~15.2% and 90.0%, respectively. Reflecting progress of the ~~traction from the~~Company’s Path to Brilliance ~~strategies,~~and the ~~ability to capture pent up demand from the second quarter, as well as intentional marketing and promotional efforts to drive early holiday demand, helping to mitigate traditionally high traffic days,~~Inspiring Brilliance strategies, the Company is ~~seeing momentum~~effectively differentiating its banners, with Kay and Zales delivering double digit revenue growth versus two years ago on a smaller store base. The Company is expanding both the top and bottom tiers of the market. Piercing Pagoda continued its substantial sales growth in the first quarter of Fiscal 2022, and Jared continued to grow as it appeals to customers through accessible luxury. The increase year over year also reflects the impact from the temporary closures of all North America ~~segment’s continued enhancement to its payment options to provide customers with a broad array~~stores beginning March 23, 2020 for the remainder of ~~financing, as well as offering it across its digital platform. Sales were unfavorably impacted by permanent store closures~~the first quarter of ~~approximately $48 million during the third quarter.~~Fiscal 2021.

eCommerce sales increased ~~72.7%~~113.4%, while brick and mortar same store sales increased ~~7.5%~~118.4%.

International sales

The International segment’s total sales ~~increased 0.6%~~decreased 11.6% to ~~$106.9~~$57.4 million compared to ~~$106.4~~$64.9 million in the prior year and decreased ~~4.0%~~19.3% at constant exchange rates. Same store sales ~~increased 7.8%~~decreased 12.2% compared to a decrease of ~~5.2%~~37.5% in the prior year. In the International segment, the ATV increased ~~17.7%~~5.8% year over year, while the number of transactions decreased 7.6%. This increase mainly reflects recapture of pent up demand from the second quarter, as well as intentional marketing and promotional efforts to drive early holiday demand, helping to mitigate traditionally high traffic days.

~~Table of Contents~~

~~Year to date sales~~

Signet’s total sales decreased 23.7% to $3.04 billion compared to $3.98 billion in the prior year. Total sales at constant exchange rates decreased 23.6%. Signet’s same store sales decreased 20.4%, compared to a decrease of 0.4% in the prior year. The decline in sales also reflects the impact of permanent store closures of approximately $189.0 million, as well as a reduction in service revenue recognition stemming from the COVID-19 business disruption experienced during the year (refer to Note 3 for further information).

~~eCommerce sales year to date were $616.6 million, up $166.1 million or 36.9%, compared to $450.5 million in the prior year. eCommerce sales accounted for 20.3% of year to date sales, up from11.3% of total sales in the prior year. Brick and mortar same store sales declined 30.1% from the prior period.~~

~~The breakdown of the sales performance is set out in the table below:~~

Change from previous year
Year to date Fiscal 2021 Same
store
sales Non-same
store sales,
net Total sales
at constant exchange rate Exchange
translation
impact Total
sales
as reported Total
sales
(in millions)
North America segment (20.2) % (2.6) % (22.8) % — % (22.8) % $ 2,786.8
International segment (23.1) % (6.8) % (29.9) % 0.1 % (29.8) % $ 232.8
Other segment (1)
nm nm nm nm nm $ 20.8
Signet (20.4) % (3.2) % (23.6) % (0.1) % (23.7) % $ 3,040.4

~~(1)~~ ~~Includes sales from Signet’s diamond sourcing initiative.~~

~~nm Not meaningful.~~

Average Merchandise Transaction Value(1)(2)
Merchandise Transactions
Average Value Change from previous year Change from previous year
Year to date Fiscal 2021 Fiscal 2021 Fiscal 2020 Fiscal 2021 Fiscal 2020 Fiscal 2021 Fiscal 2020
North America segment $ 390 $ 396 (1.3) % 0.8 % (18.9) % (0.3) %
International segment (3)
£ 167 £ 146 11.3 % (0.7) % (30.8) % (5.5) %

~~(1)~~ Net merchandise sales within the North America segment include all merchandise product sales, net of discounts and returns. In addition, excluded from net merchandise sales are sales tax in the US, repair, extended service plan, insurance, employee and other miscellaneous sales.

~~(2)~~ Net merchandise sales within the International segment include all merchandise product sales, including VAT, net of discounts and returns. In addition, excluded from net merchandise sales are repairs, warranty, insurance, employee and other miscellaneous sales. As a result, the sum of the changes will not agree to change in same store sales.

~~(3)~~ ~~Amounts for the International segment are denominated in British pounds.~~

~~North America sales~~

The North America segment’s total sales were $2.79 billion compared to $3.61 billion in the prior year, down 22.8%. Same store sales decreased 20.2% compared to an increase of 0.2% in the prior year. North America’s ATV decreased (1.3)%, while the number of transactions decreased 18.9%16.6%. The declines noted reflect the impact of the temporary closures of all North America stores beginning on March 23, 2020, as a result of COVID-19, which began reopening in May 2020 as noted above. The decline in sales also reflects the impact of permanent store closures of approximately $119 million.

~~eCommerce sales increased 49.1%, while brick and mortar same store sales decreased 29.8%.~~

~~International sales~~

The International segment’s total sales decreased 29.8% to $232.8 million compared to $331.8 million in the prior year and decreased 29.9% at constant exchange rates. Same store sales decreased 23.1% compared to a decrease of 5.8% in the prior year. The ATV increased 11.3% over prior year, while the number of transactions decreased 30.8%. The declines noted reflect the impact of thegovernment-imposed temporary closures of all UK stores, ~~beginning on March 24, 2020,~~ as a result of COVID-19, ~~which began reopening in June 2020.~~

~~Cost of sales and gross margin~~

beginning on January 5, 2021 through April 2021. In the ~~third~~prior year first quarter, all UK stores temporarily closed on March 24, 2020 for the remainder of the first quarter of Fiscal ~~2021,~~2022.

Gross margin

In the first quarter of Fiscal 2022, gross margin was ~~$434.5~~$678.4 million or ~~33.4%~~40.2% of sales compared to ~~$367.7~~$204.2 million or ~~31.0% of sales in the prior year comparable period. In the 39 weeks ended October 31, 2020, gross margin was $863.0 million or 28.4% of sales compared to $1,325.8 million or 33.3%~~24.0% of sales in the prior year comparable period. The increase in gross margin rate for the ~~third~~first quarter of Fiscal ~~2021,~~2022, compared to prior year quarter, was primarily driven by ~~higher sales volume driving better leverage on~~reduced clearance, sourcing savings and product mix, partially offset by lower margin mix between banners. Current year gross margin rate also benefited from the leveraging of fixed costs, such as ~~well as the favorable impact of costs savings initiatives, primarily related to lower store~~ occupancy costs.

4339

Table of Contents

The decline in gross margin rate for the 39 weeks ended October 31, 2020, compared to prior year, was primarily driven by a reduction in service revenue recognition relating to warranties while stores were temporarily closed, as well as lower sales resulting from the temporary store closures stemming from COVID-19, which led to a deleveraging on fixed store occupancy costs. The rate decline was partially offset through transformation cost savings, driven primarily by lower occupancy costs lower inventory related costs.

Selling, general and administrative expenses (“SG&A”)

In the ~~third~~first quarter of Fiscal ~~2021,~~2022, SG&A was ~~$389.3~~$512.0 million or ~~29.9%~~30.3% of sales compared to ~~$398.4~~$358.4 million or ~~33.5%~~42.1% of sales in prior year quarter. SG&A ~~decreased~~increased primarily due to ~~lower staff~~sales returning to pre-pandemic levels which drove higher advertising costs ~~inclusive~~and higher incentive compensation. In addition, staffing costs were overall higher in the current year quarter, as a substantial portion of ~~closed stores, and~~the Company’s workforce was furloughed beginning in April 2020. This was partially offset by the benefits of ~~transformation~~permanent cost savings ~~offset by higher advertising expense, incentive compensation,~~from the Company’s transformation activities, such as more efficient operating hours and corresponding labor, contributing to the ~~provision for credit losses (see Note 11 for further information).~~

~~In the 39 weeks ended October 31, 2020, SG&A was $1,013.6 million or 33.3% compared to $1,285.0 million or 32.3% of sales~~improvement in the ~~prior~~current year ~~comparable period.~~ SG&A ~~decreased primarily due to lower staff costs, inclusive of closed stores, and the impact of furloughed store and support center employees~~ as a ~~result~~percentage of the COVID-19 disruption to the business. SG&A in Fiscal 2021 also reflects lower advertising expenses and the benefits of transformation cost savings, offset by the provision for credit losses (see Note 11 for further information).sales.

Restructuring charges

During the first quarter of Fiscal 2019, Signet launched a three-year comprehensive transformation plan, called “Signet Path to Brilliance” (the “Plan”), to, among other objectives, reposition the Company to be a share gaining, OmniChannel jewelry category leader. ~~Restructuring charges~~The Plan was substantially completed as of ~~$3.6~~the end of Fiscal 2021. Credits to restructuring expense of $0.7 million and ~~$9.2~~restructuring expenses of $12.7 million were recognized in the 13 weeks ended ~~October 31,~~May 1, 2021 and May 2, 2020, ~~and November 2, 2019, respectively, primarily related to store closures, severance costs, and professional fees for legal and consulting services related to the Plan.~~

~~Restructuring charges of $45.2 million and $59.4 million were recognized in the 39 weeks ended October 31, 2020 and November 2, 2019,~~ respectively, primarily related to store closures, severance costs, and professional fees for legal and consulting services related to the Plan. See Note 5 for additional information.

Asset impairments, net

During the ~~third~~first quarter of Fiscal ~~2021~~2022, the Company recorded net non-cash, pre-tax asset impairment charges of $1.5 million, primarily related to long-lived assets. For the 13 weeks ended May 2, 2020, the Company recorded non-cash, pre-tax asset impairment charges of ~~$1.5 million, all of which related to long-lived assets. For the~~ ~~39 weeks ended October 31, 2020, the Company recorded charges~~$136.3 million. The charge related to the impairment of goodwill, intangible assets and long-lived assets of $10.7 million, $83.3 million and ~~$64.1~~$42.3 million, ~~respectively.~~respectively, for the quarter ended May 2, 2020. See Notes 13 and 15 for additional information on the asset impairments.

In addition, during the 39 weeks ended August 3, 2019, a non-cash immaterial out-of-period adjustment of $47.7 million, with $35.2 million related to Zales goodwill and $12.5 million related to R2Net goodwill, was recognized within asset impairments on the condensed consolidated statements of operations related to an error in the calculation of goodwill impairments during Fiscal 2019.

Other operating income, ~~(loss)~~net

During the 3913 weeks ended ~~October 31,~~May 1, 2021, other operating income, net, was $3.1 million primarily driven by interest income on the Company’s non-prime credit card portfolio, and offset primarily by foreign exchange losses. For the 13 weeks ended May 2, 2020, other operating income, ~~(loss)~~net was ~~$4.3~~$3.6 million primarily driven by ~~the~~ gains recognized as a result of the Company liquidating derivative financial instruments primarily related to forecasted commodity purchases that were deemed no longer effective in light of the economic ~~circumstances altered by COVID-19.~~impacts of the COVID-19 pandemic. These gains were offset by a charge ~~of $7.5 million, net of insurance recoveries,~~ related to the proposed settlement of previously disclosed shareholder litigation matters. See Note 16 and Note 21 for additional information on these matters.

Operating income (loss)

In the ~~third~~first quarter of Fiscal ~~2021,~~2022, operating income (loss) was ~~$39.7~~$168.7 million or ~~3.1%~~10.0% of sales, compared to ~~$(39.9)~~$(299.6) million or ~~(3.4)~~(35.2)% of sales in the prior year ~~third~~first quarter. ~~These results reflected the Company's ability~~This increase reflects sales returning to ~~capture pent up demand from the second quarter,~~pre-pandemic levels as well as intentional marketing and promotional efforts to drive early holiday demand, helping to mitigate traditionally high traffic days. Additionally, operating income (loss) was favorably impacted by transformationpermanent cost savings, ~~inclusive of closed stores year over year,~~driven by lower fixed occupancy costs, staff related costs and supply chain savings partially offset by higher incentive compensation and higher advertising costs. For the 13 weeks ended May 2, 2020 operating income reflects the impact of the temporary closure of all stores as a result of the COVID-19 pandemic as of March 24, 2020 through the end of such quarter, inclusive of impacts of lower sales and ~~incentive compensation.~~

asset impairment charges, offset by lower staff costs and other variable costs.

4440

Table of Contents

Signet’s operating income (loss) by segment for the ~~third~~first quarter is as follows:


		Fiscal 2021				Fiscal 2020					Fiscal 2022				Fiscal 2021
(in millions)	(in millions)	$		% of segment sales		$		% of segment sales		(in millions)	$		% of segment sales		$		% of segment sales
North America segment(1)	North America segment(1)	$	52.9	4.5	%	$	(10.7)	(1.0)	%	North America segment (1)	$	212.0	13.1	%	$	(234.2)	(30.0)	%
International segment(2)	International segment(2)	1.6		1.5	%	(5.9)		(5.5)	%	International segment (2)	(19.7)		(34.3)	%	(38.6)		(59.5)	%
Other segment ~~(3)~~	Other segment ~~(3)~~	1.3		nm		(1.5)		nm		Other segment ~~(3)~~	(0.9)		nm		(0.3)		nm
Corporate and unallocated expenses ~~(4)~~(3)	Corporate and unallocated expenses ~~(4)~~(3)	(16.1)		nm		(21.8)		nm		Corporate and unallocated expenses ~~(4)~~(3)	(22.7)		nm		(26.5)		nm
Operating income (loss)	Operating income (loss)	$	39.7	3.1	%	$	(39.9)	(3.4)	%	Operating income (loss)	$	168.7	10.0	%	$	(299.6)	(35.2)	%

(1) Operating income (loss) during the 13 weeks ended ~~October 31, 2020 includes a~~ ~~$2.2~~May 1, 2021 includes: $1.1 million ~~charge related to inventory charges recorded~~ of acquisition-related expenses in ~~conjunction~~connection with the ~~Company’s~~Rocksbox acquisition; $0.7 million of credits to restructuring ~~activities. Additionally, operating income (loss) during the 13 weeks ended October 31, 2020 includes charges of~~ ~~$0.7 million~~expense, primarily related to ~~severance~~adjustments to previously recognized restructuring liabilities; and ~~store closure costs recorded in conjunction with the Company’s restructuring activities.~~ $1.5 million of net asset impairments. See Note 5 and Note 13 for additional information.

Operating income (loss) during the 13 weeks ended ~~October 31,~~May 2, 2020 ~~also~~ includes ~~asset impairment~~a $0.4 million benefit recognized due to a change in inventory reserves previously recognized as part of the Company’s restructuring activities, charges of ~~$1.5 million.~~ ~~Operating income (loss) during the 13 weeks ended November 2, 2019 includes $1.4~~$8.9 million primarily related to ~~inventory charges~~severance and professional services recorded in conjunction with the Company’s restructuring ~~activities. Operating income (loss) during the 13 weeks ended November 2, 2019 includes $5.5 million primarily related to severance, professional fees~~activities, and ~~store closure costs recorded in conjunction with the Company’s restructuring activities.See~~asset impairment charges of $117.9 million. See Note 5, Note 13, and Note 15 for additional information.

(2) Operating income (loss) during the 13 weeks ended ~~October 31,~~May 2, 2020 includes charges of ~~$3.0~~$3.6 million primarily related to severance and ~~store closure costs~~professional services recorded in conjunction with the Company’s restructuring ~~activities. Operating income (loss) during the 13 weeks ended November 2, 2019 includes $0.8 million primarily related to severance, professional fees~~activities and ~~store closure costs recorded in conjunction with the Company’s restructuring activities.~~Seeasset impairment charges of $18.4 million. See Note 5, Note 13, and Note 15 for additional information.

(3) Operating income (loss) during the 13 weeks ended ~~October 31,~~May 2, 2020 includes a ~~$0.2 million~~ ~~benefit recognized due to a change in inventory reserves previously recognized as part of the Company’s restructuring activities. See Note 5 for additional information.~~

~~(4)~~ ~~Operating income (loss) during the 13 weeks ended October 31, 2020 includes a credit of~~ ~~$0.1 million~~ primarily related to severance and professional services recorded in conjunction with the Company’s restructuring activities. Operating income (loss) during the 13 weeks ended November 2, 2019 include charges of ~~$2.9 million~~ ~~related to charges recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information.~~

~~nm Not meaningful.~~

~~Table of Contents~~

In the year to date period of Fiscal 2021, operating income (loss) was $(349.6) million or (11.5)% of sales, compared to $(64.9) million or (1.6)% of sales in the prior year period. The decrease reflects the unfavorable impact of the temporary closures of all stores as a result of COVID-19, including the impacts of lower sales and higher asset impairment charges, offset by lower staff costs and other variable costs. Additionally, operating income (loss) was favorably impacted by the transformation cost savings, driven by lower staff costs and lower fixed occupancy costs.

~~Signet’s operating income (loss) by segment for the year to date period is as follows:~~

Fiscal 2021 Fiscal 2020
(in millions) $ % of segment sales $ % of segment sales
North America segment(1)
$ (238.3) (8.6) % $ 29.4 0.8 %
International segment(2)
(52.6) (22.6) % (16.5) (5.0) %
Other segment (3)
0.8 nm (14.4) nm
Corporate and unallocated expenses (4)
(59.5) nm (63.4) nm
Operating income (loss) $ (349.6) (11.5) % $ (64.9) (1.6) %

~~(1)~~ ~~Operating income (loss) during the 39 weeks ended October 31, 2020 includes a~~ ~~$1.6 million~~ charge related to inventory charges recorded in conjunction with the Company’s restructuring activities. Additionally, operating income (loss) during the 39 weeks ended October 31, 2020 includes charges of ~~$37.3 million~~ ~~primarily related to severance, professional fees and store closure costs recorded in conjunction with the Company’s restructuring activities.~~ ~~Operating income (loss) during the 39 weeks ended October 31, 2020 also includes asset impairment charges of $136.9 million.~~ Operating income (loss) during the 39 weeks ended November 2, 2019 includes a $47.7 million out-of-period goodwill adjustment. In addition, operating income (loss) during the 39 weeks ended November 2, 2019 includes $2.6 million related to inventory charges recorded in conjunction with the Company’s restructuring activities. Operating income (loss) during the 39 weeks ended November 2, 2019 includes $37.7 million primarily related to severance, professional fees and store closure costs recorded in conjunction with the Company’s restructuring activities.See Note 5, Note 13, and Note 15 for additional information.

~~(2)~~ ~~Operating income (loss) during the 39 weeks ended October 31, 2020 includes charges of~~ ~~$7.6 million~~ ~~related to severance and store closure costs recorded in conjunction with the Company’s restructuring activities.~~ ~~Additionally, operating income (loss) during the 39 weeks ended October 31, 2020 includes asset impairment charges of $21.2 million.~~ Operating income (loss) during the 39 weeks ended November 2, 2019 includes $2.4 million primarily related to severance, professional fees and store closure costs recorded in conjunction with the Company’s restructuring activities.S~~ee Note 5, Note 13, and Note 15 for additional information.~~

~~(3)~~ ~~Operating income (loss) during the 39 weeks ended October 31, 2020 includes a~~ ~~$0.2 million~~ ~~benefit recognized due to a change in inventory reserves previously recognized as part of the Company’s restructuring activities. Operating income (loss) during the~~ ~~39 weeks ended~~ ~~November 2, 2019 includes charges of~~ ~~$3.2 million~~ ~~related to inventory charges recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information.~~

~~(4)~~ ~~Operating income (loss) during the~~ ~~39 weeks ended~~ ~~October 31, 2020 includes a net~~ charge of ~~$7.5~~$8.5 million related to the settlement of previously disclosed shareholder litigation matters ~~inclusive~~and charges of ~~expected insurance proceeds. Operating income (loss) during the 39 weeks ended October 31, 2020 includes charge of~~ ~~$0.3~~$0.2 million primarily related to severance and professional ~~fees recorded in conjunction with the Company’s restructuring activities. Operating income (loss) during the 39 weeks ended November 2, 2019 include charges of~~ ~~$19.3 million~~ ~~related to charges for severance and professional fees~~services recorded in conjunction with the Company’s restructuring activities. See Note 5 and Note 21 for additional information.

nm Not meaningful.

Interest expense, net

In the 13 ~~and 39~~ weeks ended ~~October 31, 2020,~~May 1, 2021, net interest expense was ~~$9.1~~$3.9 million, ~~and $25.6 million, respectively,~~ compared to ~~$8.6 million and $27.9~~$7.1 million in the 13 ~~and 39~~ weeks ended ~~November~~May 2, ~~2019, respectively. During the third quarter of Fiscal 2021, the increase~~2020. The decrease is primarily due to ~~higher~~lower average borrowings compared to prior year quarter.

During the 39 weeks ended October 31, 2020, the reduction is primarily due to the favorable impact of lower average interest rates due to the debt refinancing during the third quarter of Fiscal 2020 partially offset by higher average borrowings compared to prior year comparable periods.

~~Other non-operating income, net~~

In the third quarter of Fiscal 2021, other non-operating income, net, was $0 million compared to $7.0 million in the prior third quarter. The third quarter of Fiscal 2020 reflects a $6.7 million net gain related to the completion of the Company’s debt refinancing, which consists of an $8.7 million net gain on the early extinguishment of senior notes, partially offset by a $2.0 million write-off of unamortized debt issuance costs related to the termination of the Company’s prior Credit Facility. See Note 18 for additional information.

Income taxes

In the ~~third~~first quarter of Fiscal ~~2021, the~~2022, income tax expense was ~~$21.3~~$26.5 million, an effective tax rate (“ETR”) of ~~69.6%~~16.1%, compared to the income tax benefit of ~~$6.0~~$109.5 million, an ETR of ~~14.5%~~35.7% in the prior year comparable period. The ETR for the 13 weeks ended ~~October 31,~~May 1, 2021 was lower than the US federal income tax rate primarily due to the favorable impact of foreign rate differences and benefits from its global reinsurance arrangements. The ETR for the 13 weeks ended May 2, 2020 was ~~unfavorably~~primarily impacted by ~~the reduction in~~ the anticipated benefit of the CARES Act for the rate benefit of the net operating losses incurred in Fiscal 2021 to be carried back to tax years with higher enacted tax rates and increase in valuation allowance recorded against certain US and state deferred tax assets. The Company’s effective tax rate for the same period during the prior year was unfavorably impacted by the non-tax deductible goodwill impairment charge recognized in the ~~prior year.~~

~~Table of Contents~~

~~In the year to date period~~first quarter of Fiscal 2021 the income tax benefit was $105.4 million, an ETR of 28.1%, compared to income tax benefit of $3.7 million, an ETR of 4.3% in the prior year comparable period. The increase in the ETR is primarily due to the anticipated benefit of $97.4 million relating to the CARES Act offset by the unfavorable impact of the valuation allowance recorded against certain US and state deferred tax assets ~~of $66.9 million~~ and the impairment of goodwill which was not deductible for tax purposes. The year to date ETR in the prior year comparable period was also impacted by the anticipated annual mix of pre-tax income by jurisdiction and the unfavorable impact of non-tax deductible goodwill impairment recognized in the prior year. Refer to Note 10 for additional information.

LIQUIDITY AND CAPITAL RESOURCES

Overview

The Company’s primary sources of liquidity are cash on hand, cash provided by operations and availability under its ~~ABL~~senior unsecured asset-based revolving credit facility (the “ABL Revolving ~~Facility (defined below)~~Facility”). As of ~~October 31, 2020,~~May 1, 2021, the Company had ~~$1,332.6 million~~approximately $1.3 billion of cash and cash equivalents and ~~$1,041.2~~$147.6 million of outstanding ~~debt.~~debt, with $1.2 billion of availability under its ABL Revolving Facility.

The tenets of Signet’s capital strategy are: 1) investing in its business to drive growth in line with the Company’s overall business strategy; 2) ensuring adequate liquidity through a strong cash position and financial flexibility under its debt arrangements; and 3) returning excess cash to shareholders. Over time, Signet’s strategy is to reduce its adjusted leverage ratio (a non-GAAP measure as defined in Item 7 of the Signet’s Fiscal 2021 Annual Report on Form 10-K) to below 3.0x.

During the past three years under its Path-to-Brilliance transformation plan, the Company delivered substantially against its strategic priorities to establish the Company as the OmniChannel jewelry category leader and position its business for sustainable long-term growth. The investments and new capabilities built during the past three years laid the foundation for stronger than expected results and momentum beginning in the second half of Fiscal 2021, ~~the Company has accelerated its transformation efforts and focused on~~including prioritizing digital investments in both technology and talent, ~~to enhance~~enhancing its new and modernized eCommerce platform and ~~to optimize~~optimizing the OmniChannel shopping journey for its customers. This includes flexible fulfillment capabilities which unlock store level inventory and enable buy online pick up in-store, as well as a continued strategic focus on inventory management to align with customer preferences. The Company’s cash discipline has also led to more efficient working capital, through both the extension of payment ~~terms~~days with the Company’s vendor base, as well through continued inventory reduction efforts. In addition, structural cost reductions during ~~Fiscal 2021 under~~the past three years of the Company’s transformation strategy generated annual costs savings of $300 million which are now embedded in the business.

Table of Contents

As the Company transitions to the next phase of its strategy, Inspiring Brilliance, it will continue to focus on working capital efficiency, optimizing its real estate footprint, and prioritizing transformational productivity to drive future costs savings opportunities, all of which are expected to ~~result in at least $100 million of annual cost savings that will~~ be used to fuel strategic investments, grow the business, and enhance liquidity.

In addition to its strategic initiatives, as a result of COVID-19 in Fiscal 2021, the Company took temporary actions to preserve liquidity, which included reduced overall capital expenditures, significant reductions to discretionary spend, the implementation of temporary reduced work hours and furloughs across store and support center teams, as well as reduced cash compensation for executives and the Company’s Board of Directors. The Company ~~also temporarily suspended its common~~has declared the first quarter Fiscal 2022 preferred share dividend ~~program and has paid its preferred dividends~~(payable during ~~each~~the second quarter of Fiscal ~~2021 “in-kind”.~~

~~As a prudent measure~~2022) payable in cash. Signet has also elected to ~~increase~~reinstate the ~~Company’s financial flexibility and bolster its cash position, during~~dividend program on the ~~first~~common shares beginning in the second quarter of Fiscal 2021, the Company elected to access an additional $900 million on the ABL Revolving Facility. The Company paid down $300 million of the ABL Revolving Facility during the 13 weeks ended October 31, 2020, as well paid down an additional $190 million in November 2020.2022.

If the excess availability under the ABL Revolving Facility falls below the threshold specified in the ABL Facility agreement, the Company will be required to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00. As of October 31, 2020, the threshold related to the fixed coverage ratio was approximately $132 million. The ABL Facility places certain restrictions upon the Company’s ability to, among other things, incur additional indebtedness, pay dividends, grant liens and make certain loans, investments and divestitures. The ABL Facility contains customary events of default (including payment defaults, cross-defaults to certain of our other indebtedness, breach of representations and covenants and change of control). The occurrence of an event of default under the ABL Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Facility.

The Company believes that cash on hand, cash flows from operations and available borrowings under the ABL Revolving Facility will be sufficient to meet its ongoing business requirements for at least the 12 months following the date of this report, including funding working capital needs, projected investments in the business (including capital expenditures), debt service, and ~~debt service.~~returns to shareholders through either dividends or the Company’s share repurchase program.

Primary sources and uses of operating cash flows

Operating activities provide the primary source of cash for the Company and are influenced by a number of factors, the most significant of which are operating income and changes in working capital items, such as:

•changes in the level of inventory as a result of sales and other strategic ~~initiatives (i.e. store count);~~initiatives;

•changes and timing of accounts payable and accrued expenses, including variable compensation; and

•changes in deferred revenue, reflective of the revenue from performance of extended service plans.

Signet derives most of its operating cash flows through the sale of merchandise and extended service plans. As a retail business, Signet receives cash when it makes a sale to a customer or when the payment has been processed by Signet or the relevant bank if the payment is made by third-party credit or debit card. As further discussed in Note 11, the Company has outsourced its prime credit portfolio and a substantial portion of its non-prime credit portfolio, and it receives cash from its outsourced financing partners (net of

~~Table of Contents~~

applicable fees) within two days of the customer sale. Offsetting these receipts, the Company’s largest operating expenses are the purchase of inventory, store occupancy costs (including rent), and payroll and payroll-related benefits.

Summary cash flow

The following table provides a summary of Signet’s cash flow activity for Fiscal ~~2021~~2022 and Fiscal ~~2020:~~2021:


		39 weeks ended					13 weeks ended
(in millions)	(in millions)	October 31, 2020		November 2, 2019		(in millions)	May 1, 2021		May 2, 2020
Net cash provided by operating activities		$	606.7	$	113.5
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	$	161.1	$	(7.6)
Net cash used in investing activities	Net cash used in investing activities	(37.7)		(99.9)		Net cash used in investing activities	(24.8)		(6.4)
Net cash provided by (used in) financing activities		395.1		(15.5)
Increase (decrease) in cash and cash equivalents		$	964.1	$	(1.9)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(13.7)		714.0
Increase in cash and cash equivalents						Increase in cash and cash equivalents	$	122.6	$	700.0

Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	$	374.5	$	195.4	Cash and cash equivalents at beginning of period	$	1,172.5	$	374.5
Increase (decrease) in cash and cash equivalents		964.1		(1.9)
Increase in cash and cash equivalents						Increase in cash and cash equivalents	122.6		700.0
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(6.0)		(4.9)		Effect of exchange rate changes on cash and cash equivalents	3.3		(7.9)
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	1,332.6	$	188.6	Cash and cash equivalents at end of period	$	1,298.4	$	1,066.6

Operating activities

Net cash provided by operating activities was ~~$606.7~~$161.1 million during the first quarter of Fiscal 2022 compared to net cash ~~provided by~~used in operating activities of ~~$113.5~~$7.6 million in the prior year comparable period, primarily due to higher operating income in the ~~Company’s ongoing cost control~~current year versus the prior comparable period, in which the Company experienced closures to all of its stores beginning at the end of March 2020 and ~~working capital management initiatives, as well as temporary measures in place to manage liquidity~~other business disruptions as a result of the impacts of the COVID-19 ~~offset by the impacts of the pandemic on the Company’s operating results.~~pandemic.

•Net ~~loss~~income was ~~$269.5~~$138.4 million compared to net loss of ~~$81.6~~$197.1 million in the prior year period, an increase of ~~$187.9~~$335.5 million.

•~~Net loss for~~Deferred taxes was a source of $9.5 million in the current period, ~~was significantly impacted by changes in deferred tax liabilities, which increased $149.1 million~~ compared to a ~~decrease~~source of ~~$0.4~~$83.3 million in the prior year ~~period offset by changes~~period. Changes in current income taxes was a use of ~~$99.7~~$8.4 million in the current period compared to ~~$7.6~~a use of $192.7 million in the prior year. ~~This~~The change was primarily the result of the net operating loss ~~carried back and~~carryback filed in the first quarter of Fiscal 2021 in accordance with the provisions of the CARES Act, offset by an increase in the valuation allowance related to certain

Table of Contents

deferred tax assets in the US. ~~During~~Refer to Note 10 for more details. The carryback was collected in the third quarter of Fiscal ~~2021, the Company collected approximately $164 million related to loss carryback filed earlier in the year under the CARES Act. Refer to Note 10.~~2021.

•Non-cash impairment charges were ~~$158.1~~$1.5 million compared to ~~$47.7~~$136.3 million in the prior year period. See Note 13 for additional information regarding asset impairments.

•Cash provided by ~~other assets and other receivables~~inventory was ~~$188.2~~$19.3 million compared to ~~$4.0~~cash used of $77.2 million in the prior year period. Inventory increased in the prior year due to the shut down of the stores in late March 2020 as a result of the COVID-19 pandemic.

•Cash used by accounts payable was $122.2 million compared to cash provided of $99.0 million in the prior year period, ~~and was driven primarily by~~as the ~~collection~~Company paid down a significant portion of ~~insurance proceeds related to~~its fourth quarter merchandise purchases from the ~~shareholder litigation settlement described in Note 21. Offsetting these~~Holiday Season. In the prior year first quarter, as a result of cash ~~proceeds was the payment~~management initiatives implemented as a result of the ~~settlement amount during~~COVID-19 pandemic, the ~~second quarter, which resulted in cash used by accrued expenses and other liabilities of $192.5 million in Fiscal 2021 compared to $30.5 million in the prior year.~~Company began utilizing extended terms with its vendors.

•Cash provided by ~~inventory~~accrued expenses and other current liabilities was ~~$151.1~~$18.0 million compared to cash used of ~~$133.0~~$40.1 million in the prior year ~~period. This increase was driven by the Company’s continued inventory reduction initiatives and the lower store count of 315 stores compared~~period, primarily related to ~~prior year-end.~~higher accruals for incentive compensation.

•Cash provided by accounts payable was $325.2 million compared to cash provided of $183.7 million in the prior year period. This increase was driven by the Company’s aggressive working capital management initiatives throughout Fiscal 2021, including the extension of payment terms with numerous vendors during the year.

•~~Cash provided~~used by changes in operating leases was ~~$43.9~~$31.2 million in Fiscal ~~2021,~~2022, compared to cash ~~used~~provided of ~~$8.0~~$61.4 million in the prior year period, driven by the Company’s deferral of rent payments due beginning in ~~the months of~~ April ~~through July~~ 2020, which ~~are now expected to be paid primarily in early~~were partially repaid during the first quarter of Fiscal 2022. See Note 14 for further information.

•Cash provided by deferred revenue was $34.4 million compared to cash used of $5.0 million in the prior year period, primarily due to increased warranty plan sales associated with the higher overall first quarter sales volume.

Forward-Flow Receivables Outsourcing Agreement with Investors

In conjunction with the sale of the majority of Signet’s non-prime in-house accounts receivable to CarVal and Castlelake (collectively, the “Investors”), beginning in June 2018, the Investors began purchasing the majority of forward flow receivables of Signet’s non-prime credit from Signet for a five-year term. ~~In Fiscal 2020, those forward flow receivables represented approximately 7% of~~

~~Table of Contents~~

~~Signet’s revenue.~~ During Fiscal 2021, the 2018 agreements pertaining to the purchase of forward flow receivables were terminated and new agreements were executed with both Investors which will remain effective until June 30, 2021, unless terminated earlier by either party pursuant to the terms of respective agreements. The new agreements provide that the Investors will continue to purchase add-on receivables created on existing customer accounts at a discount rate determined in accordance with the new agreements. Signet ~~will retain~~began retaining all forward flow non-prime receivables created for new customers ~~which are expected to represent less than 2.5%~~in the second quarter of ~~Signet’s~~ Fiscal ~~2021 revenue.~~2021. The termination of the previous agreements ~~has~~had no effect on the receivables that were previously sold to the Investors prior to the termination, except that Signet agreed to extend the Investors’ payment obligation for the remaining 5% of the receivables previously purchased in June 2018 until the new agreements terminate. The Company’s agreement with the credit servicer Genesis Financial Solutions remains in place.

In January 2021, the Company reached additional agreements with the Investors to further amend the purchase agreements described above through June 30, 2021. CarVal continued to purchase add-on receivables for existing accounts and began to purchase 50% of new forward flow non-prime receivables. Genesis (becoming one of the “Investors”) began to purchase the remaining 50% of new forward flow non-prime receivables through June 30, 2021. Castlelake will continue to purchase add-on receivables for existing accounts through June 30, 2021. Signet continued to retain add-on receivables for its existing accounts but is no longer retaining new forward flow non-prime receivables.

In March 2021, the Company provided notice to the Investors of its intent not to extend the respective agreements with such Investors beyond the expiration date of June 30, 2021. Effective July 1, 2021 (the “New Program Start Date”), all new prime and non-prime account origination will occur in accordance with the amended and restated Comenity and Genesis agreements as further described in Note 11 and Note 22. The Company is currently in discussions with the Investors to extend the agreements related to the add-on purchases for their respective existing non-prime accounts that were originated prior to the New Program Start Date.

Investing activities

Net cash used in investing activities infor the 3913 weeks ended ~~October 31, 2020~~May 1, 2021 was ~~$37.7~~$24.8 million compared to net cash used in investing activities of ~~$99.9~~$6.4 million in the prior period. Cash used in Fiscal ~~2021~~2022 was primarily related to ~~strategic~~the acquisition of Rocksbox Inc. for $14.4 million (net of cash acquired) and capital ~~investments in digital and IT, compared to Fiscal 2020 which related primarily to capital~~ expenditures of $11.3 million. Capital expenditures are associated with new stores, remodels of existing stores, and strategic capital investments in digital and IT. The Company reduced planned capital expenditures in Fiscal 2021 due to uncertainty around COVID-19; however, it expects to spend between $175 million and $200 million in Fiscal 2022, focusing on technology, banner differentiation and innovation.

Table of Contents

Stores opened and closed in the 3913 weeks ended ~~October 31, 2020:~~May 1, 2021:


Store count by segment	Store count by segment	February 1, 2020	Openings	Closures	October 31, 2020	Store count by segment	January 30, 2021	Openings	Closures	May 1, 2021
North America segment(1)	North America segment(1)	2,757	1	(219)	2,539	North America segment (1)	2,481	9	(8)	2,482
International segment(1)	International segment(1)	451	—	(97)	354	International segment (1)	352	—	(1)	351
Signet	Signet	3,208	1	(316)	2,893	Signet	2,833	9	(9)	2,833

(1) The net change in selling square footage for Fiscal ~~2021~~2022 year to date for the North America and International segments was ~~(6.4%~~(0.2%) and ~~(14.0%~~(0.3%), respectively.

Financing activities

Net cash used in financing activities for the 13 weeks ended May 1, 2021 was $13.7 million, primarily due to activity related to the settlement of the Company’s share-based compensation awards.

Net cash provided by financing activities infor the 3913 weeks ended ~~October 31,~~May 2, 2020 was ~~$395.1~~$714.0 million, ~~comprised~~consisted primarily of net borrowings of ~~$435.8~~$746.0 million partially offset by $27.1 million for dividend payments on common and preferred shares. ~~The reduction in cash payments for dividends in the current year was the result of the Company’s cash management efforts described above. See further information on debt movements below.~~

Net cash used in financing activities in the 39 weeks ended November 2, 2019 was $15.5 million, comprised primarily of $81.4 million for dividend payments on common and preferred shares, partially offset by net borrowings of $72.2 million. See further information on debt movements below.

Movement in cash and indebtedness

Cash and cash equivalents at ~~October 31, 2020~~May 1, 2021 were ~~$1,332.6 million~~$1.3 billion compared to ~~$188.6 million~~$1.1 billion as of ~~November~~May 2, ~~2019.~~2020. Signet has cash and cash equivalents invested in various ‘AAA’ rated government money market funds and at a number of large, highly rated financial institutions. The amount invested in each liquidity fund or at each financial institution takes into account the credit rating and size of the liquidity fund or financial institution and is invested for short-term durations.

At ~~October 31, 2020,~~May 1, 2021, Signet had ~~$1,041.2~~$147.6 million of outstanding debt, ~~comprised~~consisted entirely of $147.6 million of Senior Notes.

At May 2, 2020, Signet had $1.4 billion of outstanding debt, consisted of $147.5 million of Senior Notes, ~~$790.0 million~~$1.1 billion on the ABL Revolving Facility, $100.0 million on the FILO Term Loan Facility and ~~$3.6~~$22.2 million of ~~other loans and~~ bank overdrafts. On March 19, 2020, as a prudent measure in response to the COVID-19 pandemic to increase the Company’s financial flexibility and bolster its cash position, the Company elected to access $900 million on the ~~$1.5 billion~~ ABL Revolving Facility. ~~The~~Subsequently in Fiscal 2021, the Company fully repaid ~~$300~~the $100 million ~~on the ABL Revolving Facility during the 13 weeks ended October 31, 2020, and paid down an additional $190 million during November 2020.~~

~~At November 2, 2019, Signet had $795.5 million of outstanding debt, comprised of $147.5 million of Senior Notes, $543.0 million on the ABL Revolving Facility, $100.0 million on the~~ FILO Term Loan Facility ~~on a term loan facility~~ and ~~$5.0 million of bank overdrafts. On September 27, 2019, in connection with~~ the ~~issuance~~outstanding balance of the ABL ~~Facility, the Company repaid and terminated the Credit~~Revolving Facility. On September 5, 2019, Signet UK Finance announced the commencement of the Tender Offer. An aggregate principal amount of $239.6 million, which represented a purchase price of $950.00 per $1,000.00 in principal amount of the Senior Notes, were validly tendered. SeeRefer to Note 18 for ~~more details.~~further information regarding the Company’s indebtedness.

The Company had stand-by letters of credit outstanding of ~~$16.6~~$19.0 million as of ~~October 31, 2020~~May 1, 2021 that reduces borrowing capacity under the ABL Revolving Facility.

~~Table of Contents~~

Net cash was ~~$292.8 million~~$1.2 billion as of ~~October 31, 2020~~May 1, 2021 compared to net debt of ~~$605.2~~$291.6 million as of ~~November~~May 2, ~~2019.~~2020. Refer to the non-GAAP measures discussed above for the definition of net cash (debt) and reconciliation to its most comparable financial measure presented in accordance with GAAP.

~~CONTRACTUAL OBLIGATIONS~~

~~Signet’s contractual obligations~~As of May 1, 2021, January 30, 2021 and ~~commitments as of October 31,~~May 2, 2020, ~~and~~ the ~~effects such obligations and commitments are expected to have on Signet’s liquidity and cash flows~~Company was in ~~future periods have not changed materially outside the ordinary course from those disclosed in Signet’s Annual Report on Form 10-K for the year ended February 1, 2020 filed~~compliance with ~~the SEC on March 26, 2020.~~all debt covenants.

SEASONALITY

Signet’s business is seasonal, with the fourth quarter historically accounting for approximately ~~35-40%~~35%-40% of annual sales as well as accounts for a substantial portion of the annual operating profit. The “Holiday Season” consists of results for the months of November and December, with December being the highest volume month of the year.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its accounting policies, estimates and judgments, including those related to the valuation of accounts receivables, inventories, deferred revenue, derivatives, employee benefits, income taxes, contingencies, asset impairments, leases, indefinite-lived intangible assets, depreciation and amortization of long-lived assets and accounting for business combinations. Management bases the estimates and judgments on historical experience and various other factors believed to be reasonable under the circumstances. Actual results may differ from these estimates. There have been no material changes to the critical accounting policies and estimates disclosed in Signet’s Annual Report on Form 10-K for the fiscal year ended ~~February 1, 2020~~January 30, 2021 filed with the SEC on March ~~26, 2020, except as noted below:~~

~~Long-lived assets~~

Long-lived assets of the Company consist primarily of property, plant and equipment and operating lease right-of-use (ROU) assets. Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Potentially impaired assets or asset groups are identified by reviewing the undiscounted cash flows of individual stores. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the store asset group, based on the Company’s internal business plans. If the undiscounted cash flow for the store asset group is less than its carrying amount, the long-lived assets are measured for potential impairment by estimating the fair value of the assets in the group, and recording an impairment loss for the amount that the carrying value exceeds the estimated fair value. The Company utilizes primarily the replacement cost method to estimate the fair value of its property and equipment, and the income capitalization method to estimate the fair value of its ROU assets, which incorporates historical store level sales, internal business plans, real estate market capitalization and rental rates, and discount rates.

The valuation of the Company’s long-lived assets could be negatively impacted by unfavorable operating performance and cash flows of the Company’s stores, including a slower than anticipated re-opening of the stores, lower than anticipated consumer traffic, changes in the Company’s real estate strategy or other key business initiatives. Key assumptions used to estimate fair value, such as sales trends, market capitalization and rental rates, and discount rates could impact the fair value estimates of the store assets in future periods.

19, 2021.

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

The Company and certain of its subsidiaries, which are listed on Exhibit 22.1 to this Quarterly Report on Form 10-Q, have guaranteed obligations under the 4.70% senior unsecured notes due in 2024 (the “Senior Notes”).

Table of Contents

The Senior Notes were issued by Signet UK Finance plc (the “Issuer”). The Senior Notes rank senior to the Preferred Shares (as defined in Note 6) and Common Shares. The Senior Notes are effectively subordinated to our existing and future secured indebtedness to the extent of the assets securing that indebtedness. The Senior Notes are fully and unconditionally guaranteed on a joint and several basis by the Company, as the parent entity ( the “Parent”) of the Issuer, and certain of its subsidiary guarantors (each, a “Guarantor” and collectively, the “Guarantors”).

The Senior Notes are structurally subordinated to all existing and future debt and other liabilities, including trade payables, of our subsidiaries that do not guarantee the Senior Notes (the “Non-Guarantors”). The Non-Guarantors will have no obligation, contingent or otherwise, to pay amounts due under the Senior Notes or to make funds available to pay those amounts. Certain Non-Guarantors

~~Table of Contents~~

may be limited in their ability to remit funds to us by means of dividends, advances or loans due to required foreign government and/or currency exchange board approvals or limitations in credit agreements or other debt instruments of those subsidiaries.

The Guarantors jointly and severally irrevocably and unconditionally guarantee on a senior unsecured basis the performance and full and punctual payment when due of all obligations of Issuer, as defined in the Indenture, in accordance with the Senior Notes and the related Indentures, as supplemented, whether for payment of principal of or interest on the Senior Notes when due and any and all costs and expenses incurred by the trustee or any holder of the Senior Notes in enforcing any rights under the guarantees (collectively, the “Guarantees”). The Guarantees and Guarantors are subject to release in limited circumstances only upon the occurrence of certain customary conditions.

Although the Guarantees provide the holders of Senior Notes with a direct unsecured claim against the assets of the Guarantors, under U.S. federal bankruptcy law and comparable provisions of U.S. state fraudulent transfer laws, in certain circumstances a court could cancel a Guarantee and order the return of any payments made thereunder to the Guarantor or to a fund for the benefit of its creditors.

A court might take these actions if it found, among other things, that when the Guarantors incurred the debt evidenced by their Guarantee (i) they received less than reasonably equivalent value or fair consideration for the incurrence of the debt and (ii) any one of the following conditions was satisfied:

•the Guarantor entity was insolvent or rendered insolvent by reason of the incurrence;

•the Guarantor entity was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or

•the Guarantor entity intended to incur or believed (or reasonably should have believed) that it would incur, debts beyond its ability to pay as those debts matured.

In applying the above factors, a court would likely find that a Guarantor did not receive fair consideration or reasonably equivalent value for its Guarantee, except to the extent that it benefited directly or indirectly from the issuance of the Senior Notes. The determination of whether a Guarantor was or was not rendered insolvent when it entered into its Guarantee will vary depending on the law of the jurisdiction being applied. Generally, an entity would be considered insolvent if the sum of its debts (including contingent or unliquidated debts) is greater than all of its assets at a fair valuation or if the present fair salable value of its assets is less than the amount that will be required to pay its probable liability on its existing debts, including contingent or unliquidated debts, as they mature.

If a court canceled a Guarantee, the holders of the Senior Notes would no longer have a claim against that Guarantor or its assets.

Each Guarantee is limited, by its terms, to an amount not to exceed the maximum amount that can be guaranteed by the applicable Guarantor without rendering the Guarantee, as it relates to that Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

Each Guarantor is a consolidated subsidiary of Parent at the date of each balance sheet presented. The following tables present summarized financial information for Parent, Issuer, and the Guarantors on a combined basis after elimination of (i) intercompany transactions and balances among Parent, Issuer, and the Guarantors and (ii) equity in earnings from and investments in any Non-Guarantor.

Summarized Balance Sheets
(in millions) October 31, 2020 February 1, 2020
Total current assets $ 3,999.7 $ 3,421.6
Total non-current assets 2,505.1 3,009.7
Total current liabilities 2,022.8 2,119.2
Total non-current liabilities 4,496.6 4,054.9
Redeemable preferred stock 633.9 617.0
Total due from Non-Guarantors (1)
323.6 573.2
Total due to Non-Guarantors (1)
1,677.3 1,825.8

Table of Contents


	Summarized Balance Sheets
(in millions)	May 1, 2021		January 30, 2021
Total current assets	$	3,687.0	$	3,799.6
Total non-current assets	2,399.1		2,475.9
Total current liabilities	2,193.8		2,357.1
Total non-current liabilities	3,547.8		3,578.7
Redeemable preferred stock	650.9		642.3
Total due from Non-Guarantors (1)	307.1		395.9
Total due to Non-Guarantors (1)	1,673.7		1,695.0

(1) Amounts included in asset and liability subtotals above.

~~Table of Contents~~


		Summarized Statements of Operations					Summarized Statements of Operations
		39 weeks ended		Year Ended			13 weeks ended		Year Ended
(in millions)	(in millions)	October 31, 2020		February 1, 2020		(in millions)	May 1, 2021		January 30, 2021
Sales	Sales	$	2,834.4	$	5,656.3	Sales	$	1,572.5	$	4,894.8
Gross margin	Gross margin	829.9		2,061.2		Gross margin	662.0		1,681.7
Income (loss) before income taxes (2)	Income (loss) before income taxes (2)	(230.6)		1,437.8		Income (loss) before income taxes (2)	201.6		161.1
Net income (loss) (2)	Net income (loss) (2)	(126.2)		1,416.2		Net income (loss) (2)	176.6		240.1

(2) Includes income ~~net of expenses,~~ from intercompany transactions with Non-Guarantors of ~~$128.0~~$34.8 million for the 3913 weeks ended ~~October 31, 2020,~~May 1, 2021, and income of ~~$1.4 billion~~$231.2 million for the year ended ~~February 1, 2020.~~January 30, 2021. Intercompany transactions primarily include intercompany dividends and interest.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Signet is exposed to market risk from fluctuations in foreign currency exchange rates, interest rates and precious metal prices, which could affect its consolidated financial position, earnings and cash flows. Signet manages its exposure to market risk through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Signet uses derivative financial instruments as risk management tools and not for trading purposes.

As certain of the International segment’s purchases are denominated in US dollars and its net cash flows are in British pounds, Signet’s policy is to enter into forward foreign currency exchange contracts and foreign currency swaps to manage the exposure to the US dollar. Signet also hedges a significant portion of forecasted merchandise purchases using commodity forward contracts. Additionally, the North America segment occasionally enters into forward foreign currency exchange contracts to manage the currency fluctuations associated with purchases for our Canadian operations. These contracts are entered into with large, reputable financial institutions, thereby minimizing the credit exposure from our counterparties.

Signet has significant amounts of cash and cash equivalents invested in various ‘AAA’ rated government money market funds and at a number of large, ~~highly rated~~highly-rated financial institutions. The amount invested in each liquidity fund or at each financial institution takes into account the credit rating and size of the liquidity fund or financial institution and is invested for short-term durations.

Signet’s market risk profile as of ~~October 31, 2020~~May 1, 2021 has not materially changed since ~~February 1, 2020.~~January 30, 2021. The market risk profile as of ~~February 1, 2020~~January 30, 2021 is disclosed in Signet’s Annual Report on Form 10-K, filed with the SEC on March ~~26, 2020.~~19, 2021.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e)) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as amended. Based on this review, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of ~~October 31, 2020.~~May 1, 2021.

Table of Contents

Changes in Internal Control over Financial Reporting

During the first quarter ~~ended October 31, 2020, the Company implemented a new enterprise resource planning (“ERP”) system. The new ERP system replaced certain legacy systems in which a significant portion~~ of the Company’s business transactions originated, were processed, or were recorded. The new ERP system is intended to provide management with enhanced transactional processing, security and management tools and is an important component of the Company’s system of disclosure controls and procedures. Except for the implementation of the ERP system, during the quarter ended October 31, 2020,Fiscal 2022, there were no ~~other~~ changes in the Company’s internal control over financial reporting ~~(as defined in Rule 13a-15(f) under the Exchange Act)~~ that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

5247

Table of Contents

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information regarding legal proceedings is incorporated by reference from Note 21 of the Condensed Consolidated Financial Statements set forth in Part I of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

~~The Company is supplementing~~There have been no material changes to the risk factors ~~previously~~from those disclosed in ~~“Item 1A. Risk Factors”~~Part I, Item 1A, of ~~the Company’s Annual Report on Form 10-K for the year ended February 1, 2020 with the following risk factor, which should be read in conjunction with the other risk factors presented in~~ the Company’s Annual Report on Form 10-K for the fiscal year ended ~~February 1, 2020~~January 30, 2021 that was filed with the SEC on March ~~26, 2020.~~

The outbreak of COVID-19 has had a significant adverse impact on the Company’s business to date in Fiscal 2021, and this outbreak, as well as other public health crises or disease outbreaks, epidemics or pandemics, has and could continue to adversely impact Signet’s business, financial condition, results of operations and cash flows and has or could exacerbate other risk factors.

A public health crisis or disease outbreak, epidemic or pandemic, such as COVID-19, or the threat or fear of such event, has been and could continue to adversely impact the Company’s business. COVID-19 has significantly impacted consumer traffic and the Company’s retail sales, based on the perceived public health risk and government imposed quarantines and restrictions of public gatherings and commercial activity to contain spread of the virus. Effective March 23, 2020, the Company temporarily closed all of its stores in North America, its diamond operations in New York and its support centers in the United States, and effective March 24, 2020, temporarily closed all of its stores in the UK. The growth in our eCommerce business was disrupted to some extent by the shutdown of the New York diamond operations. There is no guarantee that our eCommerce business will not be further impacted if the recent economic downturn continues or deteriorates further due to the COVID-19 pandemic, and additional federal or state mandates ordering the shutdown of additional non-essential businesses. Further, we have and may continue to record non-cash asset impairment charges, which may affect our operating results under US GAAP.

While we have re-opened our stores consistent with government guidelines, in connection with the widespread protests across the country and out of concern for the well-being of its customers and employees, the Company made the decision to temporarily close a small percentage of its stores throughout the year, and a resumption of widespread protesting could result in similar impacts to the Company’s operations. Additionally, there is significant uncertainty around our customers’ willingness to visit retail stores even after they are reopened. Social distancing protocols, government mandated occupancy limitations, modification to store hours and general consumer behaviors due to COVID-19 may continue to negatively impact store traffic and Company sales. Such negative impacts may be exacerbated during peak traffic times such as the Holiday shopping season. Further, while we have implemented strict safety protocols in stores that we have re-opened, there is no guarantee that such protocols will be effective or be perceived as effective, and any virus-related illnesses linked or alleged to be linked to our stores, whether accurate or not, may negatively affect our reputation, operating results and/or financial condition. The COVID-19 pandemic also has disrupted the Company’s global supply chain, and may cause additional disruptions to operations, including increased costs of production and distribution. In addition, there could be further adverse impacts if employees of the Company become sick, continue to be quarantined, or are otherwise limited in their ability to work at Company locations or travel. The Company may experience increased operational challenges due to the implementation of work from home policies for both office employees and store employees whose stores are temporarily closed. Remote working arrangements may increase risks associated with the Company’s information systems such as the risk of cybersecurity incidents or system failures, which could have an adverse effect on the Company’s business.

The uncertainty around the duration of business disruptions, the possibility of additional periods of increases or spikes in the number of COVID-19 cases; pace of the recovery when the pandemic subsides; whether a vaccine or a cure that mitigates the effect of the virus will be synthesized and, if so, when such vaccine or cure will be ready for public use; and the extent of the spread of the virus in the United States and to other areas of the world, could continue to adversely impact the national or global economy and negatively impact consumer spending, particularly discretionary spending, and our stock price. Any of these outcomes could have a material adverse impact on our business, financial condition, operating results, our level of indebtedness and covenant compliance, our ability to raise additional capital, our ability to execute our business plans, our access to and cost of financing, our lease obligations and relationships with our landlords, asset impairments, and our ability to execute and capitalize on our strategies. The full extent of COVID-19 on the Company’s operations, financial performance, and liquidity, depends on future developments that are uncertain and unpredictable, including the duration and spread of the pandemic, its impact on capital and financial markets on a macro-scale and any new information that may emerge concerning the severity of the virus, its spread to other regions and the actions to contain the virus or treat its impact, among others.

~~Table of Contents~~

To the extent that COVID-19 has affected and continues to adversely affect the U.S. and global economy, our business, results of operations, cash flows, or financial condition, it has heightened, and may continue to heighten, other risks described in the “Risk Factors” section in our annual report on Form 10-K for the year ended February 1, 2020.19, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Repurchases of equity securities

The following table contains the Company’s repurchases of equity securities in the ~~third~~first quarter of Fiscal ~~2021:~~2022:

Period
Total number of shares
purchased (1)
Average price paid per share
Total number of shares purchased as part of publicly announced plans or programs(2)
Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
August 2, 2020 to August 29, 2020 806 $ 12.35 — $ 165,586,651
August 30, 2020 to September 26, 2020 9,102 $ 17.79 — $ 165,586,651
September 27, 2020 to October 31, 2020 552 $ 21.95 — $ 165,586,651
Total 10,460 $ 17.59 — $ 165,586,651


Period	Total number of shares purchased (1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (2)	Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
January 31, 2021 to February 27, 2021	—	$	—	—	$	165,586,651
February 28, 2021 to March 27, 2021	—	$	—	—	$	165,586,651
March 28, 2021 to May 1, 2021	43,645	$	63.31	—	$	165,586,651
Total	43,645	$	63.31	—	$	165,586,651

(1) Includes ~~10,460~~43,645 shares delivered to Signet by employees to satisfy minimum tax withholding obligations due upon the vesting or ~~payment~~ of ~~stock~~restricted share awards under share-based compensation programs. These shares are not repurchased in connection with any publicly announced share repurchase programs.

(2) In June 2017, the Board of Directors authorized the repurchase of up to $600.0 million of Signet’s common shares (the “2017 Program”). The 2017 Program may be suspended or discontinued at any time without notice.

5448

Table of Contents

ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.



Number						Description of Exhibits

10.1*#						~~(1)~~Amended and Restated Credit Card Program Agreement, by and among Sterling Jewelers Inc. and Comenity Bank, dated May 17, 2021.

10.2*#						Amended and Restated Private Label Credit Card Program Agreement, by and among Zale Delaware, Inc. and Comenity Capital Bank, dated May 17, 2021.

22.1*						List of Subsidiary Guarantors

31.1*						Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*						Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*						Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*						Inline XBRL Instance ~~Document.~~Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*						Inline XBRL Taxonomy Extension Schema Document.

101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


~~(1)~~			Signet hereby agrees to furnish to the U.S. Securities and Exchange Commission, upon request, a copy of each instrument that defines the rights of holders of long-term debt under which the total amount of securities authorized does not exceed 10% of the total assets of Signet and its subsidiaries on a consolidated basis that is not filed or incorporated by reference as an exhibit to our annual and quarterly reports.
*			Filed herewith.

#			Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

5549

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Signet Jewelers Limited

Date:

~~December 3, 2020~~June 10, 2021

By:

/s/ Joan Hilson

Name:

Joan Hilson

Title:

Chief Financial and Strategy Officer (Principal Financial Officer)

5650


	Change from previous year
Year to date Fiscal 2021	Same store sales		Non-same store sales, net		Total sales at constant exchange rate		Exchange translation impact		Total sales as reported		Total sales (in millions)







North America segment	(20.2)	%	(2.6)	%	(22.8)	%	—	%	(22.8)	%	$	2,786.8


International segment	(23.1)	%	(6.8)	%	(29.9)	%	0.1	%	(29.8)	%	$	232.8
Other segment (1)	nm		nm		nm		nm		nm		$	20.8
Signet	(20.4)	%	(3.2)	%	(23.6)	%	(0.1)	%	(23.7)	%	$	3,040.4