Company Quick10K Filing
Quick10K
Signet Jewelers
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$23.01 52 $1,190
10-Q 2019-05-04 Quarter: 2019-05-04
10-K 2019-02-02 Annual: 2019-02-02
10-Q 2018-11-03 Quarter: 2018-11-03
10-Q 2018-08-04 Quarter: 2018-08-04
10-Q 2018-05-05 Quarter: 2018-05-05
10-K 2018-02-03 Annual: 2018-02-03
10-Q 2017-10-28 Quarter: 2017-10-28
10-Q 2017-07-29 Quarter: 2017-07-29
10-Q 2017-04-29 Quarter: 2017-04-29
10-K 2017-01-28 Annual: 2017-01-28
10-Q 2016-10-29 Quarter: 2016-10-29
10-Q 2016-07-30 Quarter: 2016-07-30
10-Q 2016-04-30 Quarter: 2016-04-30
10-K 2016-01-30 Annual: 2016-01-30
10-Q 2015-10-31 Quarter: 2015-10-31
10-Q 2015-08-01 Quarter: 2015-08-01
10-Q 2015-05-02 Quarter: 2015-05-02
10-K 2015-01-31 Annual: 2015-01-31
10-Q 2014-11-01 Quarter: 2014-11-01
10-Q 2014-08-02 Quarter: 2014-08-02
10-Q 2014-05-03 Quarter: 2014-05-03
10-K 2014-02-01 Annual: 2014-02-01
8-K 2019-06-14 Shareholder Vote
8-K 2019-06-06 Earnings, Exhibits
8-K 2019-04-03 Earnings, Exhibits
8-K 2019-04-03 Officers, Exhibits
8-K 2019-03-13 Officers, Exhibits
8-K 2019-03-12 Officers, Exhibits
8-K 2019-02-07 Regulation FD, Exhibits
8-K 2019-01-17 Earnings, Exhibits
8-K 2019-01-16 Enter Agreement, Exhibits
8-K 2018-12-06 Earnings, Exhibits
8-K 2018-10-24 Officers, Exhibits
8-K 2018-08-30 Earnings, Exhibits
8-K 2018-08-28 Officers, Exhibits
8-K 2018-07-02 Other Events, Exhibits
8-K 2018-06-15 Shareholder Vote
8-K 2018-06-06 Earnings, Exhibits
8-K 2018-06-06 Regulation FD, Exhibits
8-K 2018-04-30 Enter Agreement, Exhibits
8-K 2018-03-13 Officers, Exhibits
8-K 2018-02-05 Officers
8-K 2018-01-10 Earnings, Exhibits
GSK GlaxoSmithKline 98,910
CFR Cullen/Frost Bankers 6,370
JHX James Hardie Industries 5,750
SLAB Silicon Laboratories 4,420
ALEX Alexander & Baldwin 1,720
PRTY Party City Holdco 755
NIHD NII Holdings 200
NOVN Novan 32
PMTS CPI Card Group 29
FCRE FC Global Realty 0
SIG 2019-05-04
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 fy20q1exhibit311.htm
EX-31.2 fy20q1exhibit312.htm
EX-32.1 fy20q1exhibit321.htm
EX-32.2 fy20q1exhibit322.htm

Signet Jewelers Earnings 2019-05-04

SIG 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 fy20q110-q.htm 10-Q Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

 
(Mark One)
x
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
for the quarterly period ended May 4, 2019 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 or to be 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 o Emerging growth company o
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   o     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, 52,191,117 shares as of May 31, 2019


1


SIGNET JEWELERS LIMITED
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
PAGE
 
 
 
 
 
 
 
 
PART I
 
FINANCIAL INFORMATION
 
 
 
 
ITEM 1.
 
Financial Statements (Unaudited)
 
 
 
 
 
 
Condensed Consolidated Statements of Operations
 
 
 
 
 
Condensed Consolidated Statements of Comprehensive Income (Loss)
 
 
 
 
 
Condensed Consolidated Balance Sheets
 
 
 
 
 
Condensed Consolidated Statements of Cash Flows
 
 
 
 
 
Condensed Consolidated Statement of Shareholders’ Equity
 
 
 
 
 
Notes to the Condensed Consolidated Financial Statements
 
 
 
 
 
 
 
 
 
 
ITEM 2.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
ITEM 3.
 
Quantitative and Qualitative Disclosures about Market Risk
 
 
 
ITEM 4.
 
Controls and Procedures
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II
 
OTHER INFORMATION
 
 
 
 
ITEM 1.
 
Legal Proceedings
 
 
 
ITEM 1A.
 
Risk Factors
 
 
 
ITEM 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds
 
 
 
ITEM 6.
 
Exhibits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SIGNET JEWELERS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
13 weeks ended
 
 
(in millions, except per share amounts)
 
May 4, 2019
 
May 5, 2018
 
Notes
Sales
 
$
1,431.7

 
$
1,480.6

 
4
Cost of sales
 
(932.3
)
 
(995.8
)
 
 
Restructuring charges - cost of sales
 

 

 
5
Gross margin
 
499.4

 
484.8

 
 
Selling, general and administrative expenses
 
(475.2
)
 
(482.8
)
 
 
Credit transaction, net
 

 
(143.1
)
 
4
Restructuring charges
 
(26.8
)
 
(6.5
)
 
5
Goodwill and intangible impairments
 

 
(448.7
)
 
14
Other operating income, net
 

 
22.1

 
 
Operating income (loss)
 
(2.6
)
 
(574.2
)
 
4
Interest expense, net
 
(9.2
)
 
(8.9
)
 
 
Other non-operating income
 
0.3

 
0.6

 
 
Income (loss) before income taxes
 
(11.5
)
 
(582.5
)
 
 
Income taxes
 
1.5

 
85.9

 
10
Net income (loss)
 
$
(10.0
)
 
$
(496.6
)
 
 
Dividends on redeemable convertible preferred shares
 
(8.2
)
 
(8.2
)
 
7
Net income (loss) attributable to common shareholders
 
$
(18.2
)
 
$
(504.8
)
 
 
 
 
 
 
 
 
 
Earnings (loss) per common share:
 
 
 
 
 
 
Basic
 
$
(0.35
)
 
$
(8.48
)
 
8
Diluted
 
$
(0.35
)
 
$
(8.48
)
 
8
Weighted average common shares outstanding:
 
 
 
 
 
 
Basic
 
51.6

 
59.5

 
8
Diluted
 
51.6

 
59.5

 
8
The accompanying notes are an integral part of these condensed consolidated financial statements.

3


SIGNET JEWELERS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
13 weeks ended
 
May 4, 2019
 
May 5, 2018
(in millions)
Pre-tax
amount
 
Tax
(expense)
benefit
 
After-tax
amount
 
Pre-tax
amount
 
Tax
(expense)
benefit
 
After-tax
amount
Net income (loss)
 
 
 
 
$
(10.0
)
 
 
 
 
 
$
(496.6
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
$
(2.0
)
 
$
 
 
(2.0
)
 
$
(21.7
)
 
$

 
(21.7
)
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss)
0.3

 
 
 
0.3

 
(0.2
)
 

 
(0.2
)
Impact from adoption of new accounting
   pronouncements (1)

 
 
 

 
(1.1
)
 
0.3

 
(0.8
)
Cash flow hedges:
 
 
 
 


 
 
 
 
 

 
Unrealized gain (loss)
(4.3
)
 
1.1
 
 
(3.2
)
 
1.9
 
 
(0.4
)
 
1.5
 
Reclassification adjustment for gains to net income
(0.5
)
 
0.1
 
 
(0.4
)
 
(0.5
)
 
0.2

 
(0.3
)
Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Reclassification adjustment to net income for amortization of actuarial losses
0.3

 
(0.1
)
 
0.2

 
0.3
 
 

 
0.3
 
Reclassification adjustment to net income for amortization of net prior service credits

 
 
 

 
(0.1
)
 

 
(0.1
)
Total other comprehensive income (loss)
$
(6.2
)
 
$
1.1
 
 
$
(5.1
)
 
$
(21.4
)
 
$
0.1

 
$
(21.3
)
Total comprehensive income (loss)
 
 
 
 
$
(15.1
)
 
 
 
 
 
$
(517.9
)
(1) 
Adjustment reflects the reclassification of unrealized gains related to the Company’s available-for-sale equity securities as of February 3, 2018 from AOCI into retained earnings associated with the adoption of ASU 2016-1.
The accompanying notes are an integral part of these condensed consolidated financial statements.

4


SIGNET JEWELERS LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except par value per share amount)
May 4, 2019
 
February 2, 2019
 
May 5, 2018
 
Notes
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
195.1

 
$
195.4

 
$
153.9

 
 
Accounts receivable
23.1

 
23.7

 
491.4

 
11
Other current assets
205.5

 
244.0

 
236.8

 
 
Income taxes
4.8

 
5.8

 
55.2

 
 
Inventories
2,394.2

 
2,386.9

 
2,429.0

 
12
Total current assets
2,822.7

 
2,855.8

 
3,366.3

 
 
Non-current assets:
 
 
 
 
 
 
 
Property, plant and equipment, net of accumulated depreciation of $1,319.6, $1,282.8 and $1,227.3, respectively
776.1

 
800.5

 
847.2

 
 
Operating lease right-of-use assets
1,822.8

 

 

 
13
Goodwill
296.4

 
296.6

 
509.1

 
14
Intangible assets, net
264.1

 
265.0

 
343.2

 
14
Other assets
189.2

 
181.2

 
206.3

 
 
Deferred tax assets
22.0

 
21.0

 
0.8

 
 
Total assets
$
6,193.3

 
$
4,420.1

 
$
5,272.9

 
 
Liabilities and Shareholders’ equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Loans and overdrafts
$
43.7

 
$
78.8

 
$
72.3

 
17
Accounts payable
238.3

 
153.7

 
287.5

 
 
Accrued expenses and other current liabilities
420.2

 
502.8

 
463.7

 
 
Deferred revenue
277.0

 
270.0

 
284.9

 
3
Operating lease liabilities
358.9

 

 

 
13
Income taxes
24.1

 
27.7

 

 
 
Total current liabilities
1,362.2

 
1,033.0

 
1,108.4

 
 
Non-current liabilities:
 
 
 
 
 
 
 
Long-term debt
639.0

 
649.6

 
679.7

 
17
Operating lease liabilities
1,589.4

 

 

 
13
Other liabilities
126.0

 
224.1

 
236.5

 
 
Deferred revenue
699.6

 
696.5

 
667.5

 
3
Deferred tax liabilities

 

 
74.2

 
 
Total liabilities
4,416.2

 
2,603.2

 
2,766.3

 
 
Commitments and contingencies


 


 


 
20
Series A redeemable convertible preferred shares of $.01 par value: authorized 500 shares, 0.625 shares outstanding (February 2, 2019 and May 5,2018: 0.625 shares outstanding)
615.7

 
615.3

 
614.0

 
6
Shareholders’ equity:
 
 
 
 
 
 
 
Common shares of $0.18 par value: authorized 500 shares, 52.2 shares outstanding (February 2, 2019: 51.9 outstanding; May 5, 2018: 59.2 outstanding)
12.6

 
12.6

 
15.7

 
 
Additional paid-in capital
232.7

 
236.5

 
281.4

 
 
Other reserves
0.4

 
0.4

 
0.4

 
 
Treasury shares at cost: 17.8 shares (February 2, 2019: 18.1 shares; May 5, 2018: 28.0 shares)
(999.8
)
 
(1,027.3
)
 
(1,992.2
)
 
7
Retained earnings
2,223.4

 
2,282.2

 
3,869.2

 
 
Accumulated other comprehensive loss
(307.9
)
 
(302.8
)
 
(281.9
)
 
9
Total shareholders’ equity
1,161.4

 
1,201.6

 
1,892.6

 
 
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
$
6,193.3

 
$
4,420.1

 
$
5,272.9

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

5


SIGNET JEWELERS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
13 weeks ended
(in millions)
 
May 4, 2019
 
May 5, 2018
Cash flows from operating activities
 
 
 
 
Net income (loss)
 
$
(10.0
)
 
$
(496.6
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
Amortization of operating lease assets
 
87.3

 

Depreciation and amortization
 
41.0

 
49.8

Amortization of unfavorable leases and contracts
 
(1.4
)
 
(2.0
)
Share-based compensation
 
4.0

 
1.8

Deferred taxation
 

 
(18.8
)
Credit transaction, net
 

 
141.0

Goodwill and intangible impairments
 

 
448.7

Restructuring charges
 
5.4

 

Other non-cash movements
 
(4.9
)
 

Changes in operating assets and liabilities:
 
 
 
 
Decrease in accounts receivable
 
0.9

 
59.9

Decrease in other assets and other receivables
 
28.1

 
10.8

Increase in inventories
 
(7.8
)
 
(162.4
)
Increase in accounts payable
 
87.7

 
55.7

(Decrease) increase in accrued expenses and other liabilities
 
(39.9
)
 
15.3

Change in operating lease liabilities
 
(91.4
)
 

Increase (decrease) in deferred revenue
 
10.5

 
(4.3
)
Decrease in income taxes payable
 
(2.7
)
 
(70.3
)
        Pension plan contributions
 
(1.4
)
 
(0.7
)
Net cash provided by operating activities
 
105.4

 
27.9

Investing activities
 
 
 
 
Purchase of property, plant and equipment
 
(24.6
)
 
(26.1
)
Purchase of available-for-sale securities
 
(6.1
)
 
(0.4
)
Proceeds from sale of available-for-sale securities
 
0.3

 
1.1

Net cash used in investing activities
 
(30.4
)
 
(25.4
)
Financing activities
 
 
 
 
Dividends paid on common shares
 
(19.2
)
 
(18.8
)
Dividends paid on redeemable convertible preferred shares
 
(7.8
)
 
(7.8
)
Repurchase of common shares
 

 
(60.0
)
Repayments of term loans
 
(8.9
)
 
(6.7
)
Proceeds from revolving credit facility
 

 
40.0

Repayments of bank overdrafts
 
(37.3
)
 
(13.9
)
Other financing activities
 
(1.5
)
 
(2.1
)
Net cash used in financing activities
 
(74.7
)
 
(69.3
)
Cash and cash equivalents at beginning of period
 
195.4

 
225.1

Increase (decrease) in cash and cash equivalents
 
0.3

 
(66.8
)
Effect of exchange rate changes on cash and cash equivalents
 
(0.6
)
 
(4.4
)
Cash and cash equivalents at end of period
 
$
195.1

 
$
153.9

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

6


SIGNET JEWELERS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
(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

Net income (loss)

 

 

 

 
(10.0
)
 

 
(10.0
)
Other comprehensive income

 

 

 

 

 
(5.1
)
 
(5.1
)
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

 
(7.8
)
 

 
27.5

 
(21.3
)
 

 
(1.6
)
Share-based compensation expense

 
4.0

 

 

 

 

 
4.0

Balance at May 4, 2019
$
12.6

 
$
232.7

 
$
0.4

 
$
(999.8
)
 
$
2,223.4

 
$
(307.9
)
 
$
1,161.4

(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 3, 2018
$
15.7

 
$
290.2

 
$
0.4

 
$
(1,942.1
)
 
$
4,396.2

 
$
(260.6
)
 
$
2,499.8

Impact from adoption of new accounting pronouncements(1)

 

 

 

 
0.8

 
(0.8
)
 

Net income (loss)

 

 

 

 
(496.6
)
 

 
(496.6
)
Other comprehensive income

 

 

 

 

 
(20.5
)
 
(20.5
)
Dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares, $0.37/share

 

 

 

 
(21.8
)
 

 
(21.8
)
Preferred shares, $12.50/share

 

 

 

 
(8.2
)
 

 
(8.2
)
Repurchase of common shares

 

 

 
(60.0
)
 

 

 
(60.0
)
Net settlement of equity based awards

 
(10.6
)
 

 
9.9

 
(1.2
)
 

 
(1.9
)
Share-based compensation expense

 
1.8

 

 

 

 

 
1.8

Balance at May 5, 2018
$
15.7

 
$
281.4

 
$
0.4

 
$
(1,992.2
)
 
$
3,869.2

 
$
(281.9
)
 
$
1,892.6

(1) 
Adjustment reflects the reclassification of unrealized gains related to the Company’s equity security investments as of February 3, 2018 from AOCI into beginning retained earnings associated with the adoption of ASU 2016-01.
The accompanying notes are an integral part of these condensed consolidated financial statements.

7


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 three reportable segments: North America; International; and Other. The “Other” reportable segment consists of all non-reportable segments, including subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones and unallocated corporate administrative functions. See Note 4 for additional discussion of the Company’s segments.
Signet’s sales are seasonal, with the fourth quarter accounting for approximately 35-40% of annual sales, with December being by far the highest volume month of the year. The “Holiday Season” consists of results for the months of November and December. As a result of our strategic credit outsourcing and transformation initiatives, we anticipate our operating profit will be almost entirely generated in the fourth quarter.
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 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 2, 2019 filed with the SEC on April 3, 2019. Signet has reclassified certain prior year amounts in its consolidated financial statements and notes to the consolidated financial statements to conform to the current year presentation.
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. Estimates and assumptions are primarily made in relation to the valuation of accounts receivable, inventories, deferred revenue, derivatives, employee benefits, income taxes, contingencies, asset impairments, leases, indefinite-lived intangible assets, depreciation and amortization of long-lived assets, as well as accounting for business combinations.
Fiscal year
The Company’s fiscal year ends on the Saturday nearest to January 31st. Fiscal 2020 and Fiscal 2019 refer to the 52 week periods ending February 1, 2020 and February 2, 2019, respectively. Within these condensed consolidated financial statements, the first quarter of the relevant fiscal years 2020 and 2019 refer to the 13 weeks ended May 4, 2019 and May 5, 2018, respectively.
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 equity as a component of accumulated other comprehensive income (loss) (“AOCI”). Gains or losses resulting from foreign currency transactions are included within the condensed consolidated statements of operations.
See Note 9 for additional information regarding the Company’s foreign currency translation.
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.

8


New accounting pronouncements adopted during the period
Leases
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The new guidance primarily impacts lessee accounting by requiring the recognition of a right-of-use asset and a corresponding lease liability on the balance sheet for long-term lease agreements. The lease liability will be equal to the present value of all reasonably certain remaining lease payments. The right-of-use asset will be based on the liability, subject to adjustment for initial direct costs. Lease agreements that are 12 months or less are permitted to be excluded from the balance sheet. In general, leases will be amortized on a straight-line basis with the exception of finance lease agreements. Signet adopted ASU 2016-02 and related updates effective February 3, 2019 using the additional transition method provided for in ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” which permitted the Company as of the effective date of ASU 2016-02 to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The impact of this approach was deemed immaterial upon adoption of ASU 2016-02.
The Company has elected the practical expedient to account for the lease and non-lease maintenance components as a single lease component. Therefore, for those leases, the lease payments used to measure the lease liability include all of the fixed consideration in the contract. Additionally, the Company utilized the practical expedient relief package, as well as the short-term leases and portfolio approach practical expedients. The effects of the changes made to the Company’s condensed consolidated balance sheet as of February 3, 2019 for the adoption of ASC 842 were as follows:
(in millions)
 
February 2, 2019
 
Adjustments due to ASC 842
 
February 3, 2019
Current assets:
 
 
 
 
 
 
Other current assets
 
$
244.0

 
$
(8.8
)
 
$
235.2

Non-current assets:
 
 
 
 
 
 
Operating lease right-of-use assets
 

 
1,927.2

 
1,927.2

Current liabilities:
 
 
 
 
 
 
Accrued expenses and other current liabilities
 
502.8

 
(109.0
)
 
393.8

Operating lease liabilities
 

 
376.5

 
376.5

Non-current liabilities:
 
 
 
 
 
 
Operating lease liabilities
 

 
1,676.9

 
1,676.9

Other liabilities
 
224.1

 
(26.0
)
 
198.1

See additional disclosure requirements within Note 13.
In addition to the pronouncement above, the following ASUs were adopted as of February 3, 2019. The impact on the Company's consolidated financial statements is described within the table below.
Standard
 
Description
ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, issued August 2017.
 
Expands the types of risk management strategies eligible for hedge accounting, refines the documentation and effectiveness assessment requirements and modifies the presentation and disclosure requirements for hedge accounting activities. The adoption of ASU 2017-12 did not have a material impact on the Company’s financial position or results of operations.

9


New accounting pronouncements to be adopted in future periods
The Company is also currently evaluating the impact on its financial statements of the following ASUs:
Standard
 
Description
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 ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.
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.
3. Revenue recognition
The following tables provide the Company’s revenue, disaggregated by banner, major product and channel, for the 13 weeks ended May 4, 2019 and May 5, 2018:
 
13 weeks ended May 4, 2019
 
13 weeks ended May 5, 2018
(in millions)
North America
 
International
 
Other
 
Consolidated
 
North America
 
International
 
Other
 
Consolidated
Sales by banner:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kay
$
574.8

 
$

 
$

 
$
574.8

 
$
583.2

 
$

 
$

 
$
583.2

Zales
285.0

 

 

 
285.0

 
298.1

 

 

 
298.1

Jared
255.0

 

 

 
255.0

 
267.5

 

 

 
267.5

Piercing Pagoda
82.6

 

 

 
82.6

 
74.4

 

 

 
74.4

James Allen
52.0

 

 

 
52.0

 
53.3

 

 

 
53.3

Peoples
41.7

 

 

 
41.7

 
46.7

 

 

 
46.7

Regional banners
9.2

 

 

 
9.2

 
24.6

 

 

 
24.6

International segment

 
111.5

 

 
111.5

 

 
128.7

 

 
128.7

Other(1)

 

 
19.9

 
19.9

 

 

 
4.1

 
4.1

Total sales
$
1,300.3

 
$
111.5

 
$
19.9

 
$
1,431.7

 
$
1,347.8

 
$
128.7

 
$
4.1

 
$
1,480.6

(1)  
Includes sales from Signet’s diamond sourcing initiative.
 
13 weeks ended May 4, 2019
 
13 weeks ended May 5, 2018
(in millions)
North America
 
International
 
Other
 
Consolidated
 
North America
 
International
 
Other
 
Consolidated
Sales by product:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bridal
$
594.7

 
$
48.6

 
$

 
$
643.3

 
$
617.9

 
$
55.6

 
$

 
$
673.5

Fashion
467.4

 
22.4

 

 
489.8

 
461.1

 
25.9

 

 
487.0

Watches
48.2

 
34.0

 

 
82.2

 
52.2

 
39.1

 

 
91.3

Other(1)
190.0

 
6.5

 
19.9

 
216.4

 
216.6

 
8.1

 
4.1

 
228.8

Total sales
$
1,300.3

 
$
111.5

 
$
19.9

 
$
1,431.7

 
$
1,347.8

 
$
128.7

 
$
4.1

 
$
1,480.6

(1)  
Other revenue primarily includes gift, beads and other miscellaneous jewelery sales, repairs, warranty and other miscellaneous non-jewelry sales.

10


 
13 weeks ended May 4, 2019
 
13 weeks ended May 5, 2018
(in millions)
North America
 
International
 
Other
 
Consolidated
 
North America
 
International
 
Other
 
Consolidated
Sales by channel:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Store
$
1,157.3

 
$
100.2

 
$

 
$
1,257.5

 
$
1,213.7

 
$
116.3

 
$

 
$
1,330.0

E-commerce
143.0

 
11.3

 

 
154.3

 
134.1

 
12.4

 

 
146.5

Other

 

 
19.9

 
19.9

 

 

 
4.1

 
4.1

Total sales
$
1,300.3

 
$
111.5

 
$
19.9

 
$
1,431.7

 
$
1,347.8

 
$
128.7

 
$
4.1

 
$
1,480.6

For the majority of the Company’s transactions, revenue is recognized when there is persuasive evidence of an arrangement, products have been delivered or services have been rendered, the sale price is fixed and determinable, and collectability is reasonably assured. The Company’s revenue streams and their respective accounting treatments are discussed below.
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 consolidated balance sheets. Unamortized deferred selling costs as of May 4, 2019, February 2, 2019 and May 5, 2018 were as follows:
(in millions)
May 4, 2019
 
February 2, 2019
 
May 5, 2018
Deferred ESP selling costs
 
 
 
 
 
Other current assets
$
23.8

 
$
23.8

 
$
30.6

Other assets
76.4

 
75.4

 
89.2

Total deferred ESP selling costs
$
100.2

 
$
99.2

 
$
119.8

The North America segment sells ESP, subject to certain conditions, to perform repair work over the life of the product. 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 of 17 years of the sale of the warranty contract. Although claims experience varies between our 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 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.

11


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 as the Company is the primary obligor providing independent advice, guidance and after-sales service to customers. The products sold from consignment inventory are indistinguishable from 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, physical security of the products and collections of accounts receivable.
Deferred revenue
Deferred revenue is comprised primarily of ESP and sale voucher promotions and other as follows:
(in millions)
May 4, 2019
 
February 2, 2019
 
May 5, 2018
ESP deferred revenue
$
931.3

 
$
927.6

 
$
913.5

Voucher promotions and other
45.3

 
38.9

 
38.9

Total deferred revenue
$
976.6

 
$
966.5

 
$
952.4

 
 
 
 
 
 
Disclosed as:
 
 
 
 
 
Current liabilities
$
277.0

 
$
270.0

 
$
284.9

Non-current liabilities
699.6

 
696.5

 
667.5

Total deferred revenue
$
976.6

 
$
966.5

 
$
952.4

 
 
13 weeks ended
(in millions)
 
May 4, 2019
 
May 5, 2018
ESP deferred revenue, beginning of period
 
$
927.6

 
$
916.1

Plans sold(1)
 
96.0

 
96.0

Revenue recognized
 
(92.3
)
 
(98.6
)
ESP deferred revenue, end of period
 
$
931.3

 
$
913.5

(1) 
Includes impact of foreign exchange translation.
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 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 three 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 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 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 all non-reportable segments that are below the quantifiable threshold for separate disclosure as a reportable segment, including subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones and unallocated corporate administrative functions.

12


 
 
13 weeks ended
(in millions)
 
May 4, 2019
 
May 5, 2018
Sales:
 
 
 
 
North America segment
 
$
1,300.3

 
$
1,347.8

International segment
 
111.5

 
128.7

Other
 
19.9

 
4.1

Total sales
 
$
1,431.7

 
$
1,480.6

 
 
 
 
 
Operating income (loss):
 
 
 
 
North America segment(1)
 
$
48.1

 
$
(537.3
)
International segment
 
(8.0
)
 
(7.6
)
Other(2)
 
(42.7
)
 
(29.3
)
Total operating income (loss)
 
$
(2.6
)
 
$
(574.2
)
(1) 
Operating income (loss) during the 13 weeks ended May 4, 2019 includes a $0.5 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. Operating income (loss) during the 13 weeks ended May 5, 2018 includes charges of $448.7 million and $141.0 million related to the goodwill and intangible impairments recognized and valuation losses related to the sale of eligible non-prime in-house accounts receivable, respectively. See Note 14 and Note 11 for additional information.
(2) 
Operating income (loss) during the 13 weeks ended May 4, 2019 includes charges of $27.3 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 May 5, 2018 includes charges of $6.5 million recorded in conjunction with the Company’s restructuring activities. See Note 5 for additional information.
(in millions)
May 4, 2019
 
February 2, 2019
 
May 5, 2018
Total assets:
 
 
 
 
 
North America segment
$
5,437.4

 
$
3,943.0

 
$
4,722.3

International segment
608.1

 
367.4

 
401.7

Other
147.8

 
109.7

 
148.9

Total assets
$
6,193.3

 
$
4,420.1

 
$
5,272.9

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 is expected 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 are expected to be cash charges.
Restructuring charges of $26.8 million were recognized in the 13 weeks ended May 4, 2019 primarily related to store closure and severance costs, and professional fees for legal and consulting services.
Restructuring charges and other Plan related costs are classified in the condensed consolidated statements of operations as follows:
 
 
 
13 weeks ended
(in millions)
Statement of operations caption
 
May 4, 2019
 
May 5, 2018
Other Plan related expenses
Restructuring charges
 
$
26.8

 
$
6.5

Total Signet Path to Brilliance Plan expenses
 
 
$
26.8

 
$
6.5



13


The composition of the restructuring charges the Company incurred during the 13 weeks ended May 4, 2019, as well as the cumulative amount incurred through May 4, 2019, were as follows:
 
 
13 weeks ended
 
Cumulative amount
(in millions)
 
May 4, 2019
 
May 4, 2019
Inventory charges
 
$

 
$
62.2

Termination benefits
 
8.8

 
18.5

Store closure and other costs
 
18.0

 
72.0

Total Signet Path to Brilliance Plan expenses
 
$
26.8

 
$
152.7

The following table summarizes the activity related to the Plan liabilities for Fiscal 2020:
(in millions)
 
Termination benefits
 
Store closure and other costs
 
Consolidated
Balance at February 2, 2019
 
$

 
$
12.6

 
$
12.6

Payments and other adjustments
 
(2.0
)
 
(25.1
)
 
(27.1
)
Charged to expense
 
8.8

 
18.0

 
26.8

Balance at May 4, 2019
 
$
6.8

 
$
5.5

 
$
12.3

6. Redeemable preferred shares
On October 5, 2016, the Company issued 625,000 shares of Series A Convertible Preference Shares (“preferred shares”) to certain affiliates of Leonard Green & Partners, L.P., (the “Investors”) 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. Refer to Note 7 for additional discussion of the Company’s dividends on preferred shares.
(in millions, except conversion rate and conversion price)
May 4, 2019
 
February 2, 2019
 
May 5, 2018
Conversion rate
11.5493

 
11.3660

 
10.9409

Conversion price
$
86.5853

 
$
87.9817

 
$
91.4002

Potential impact of preferred shares if-converted to common shares
7.2

 
7.1

 
6.8

Liquidation preference
$
632.8

 
$
632.8

 
$
632.8

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, November 2024. Accumulated accretion recorded in the condensed consolidated balance sheets was $4.4 million as of May 4, 2019 (February 2, 2019 and May 5, 2018: $4.0 million and $2.7 million, respectively).
Accretion of $0.4 million was recorded to preferred shares in the condensed consolidated balance sheets during the 13 weeks ended May 4, 2019 ($0.4 million for the 13 weeks ended May 5, 2018).

14


7. Shareholders’ equity
Share repurchases
Common shares repurchased during the 13 weeks ended May 4, 2019 and May 5, 2018 were as follows:
 
 
 
13 weeks ended May 4, 2019
 
13 weeks ended May 5, 2018
(in millions, except per share amounts)
Amount
authorized
 
Shares
repurchased
 
Amount
repurchased
 
Average
repurchase
price per
share
 
Shares
repurchased
 
Amount
repurchased
 
Average
repurchase
price per
share
2017 Program(1)
$
600.0

 

 
$

 
$

 
0.2

 
$
9.4

 
$
38.86

2016 Program(2)
$
1,375.0

 
n/a

 
n/a

 
n/a

 
1.3

 
$
50.6

 
$
39.76

Total
 
 

 
$

 
$

 
1.5

 
$
60.0

 
$
39.62

(1) 
The 2017 Program had $165.6 million remaining as of May 4, 2019.
(2) 
The 2016 Program was completed in March 2018.
n/a
Not applicable.
Dividends on common shares
Dividends declared on common shares during the 13 weeks ended May 4, 2019 and May 5, 2018 were as follows:
 
Fiscal 2020
 
Fiscal 2019
(in millions, except per share amounts)
Cash dividend per share
 
Total
dividends
 
Cash dividend
per share
 
Total
dividends
First quarter(1)
$
0.37

 
$
19.3

 
$
0.37

 
$
21.8

(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 of May 4, 2019 and May 5, 2018, $19.3 million and $21.8 million, respectively, has been recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets reflecting the cash dividends on common shares declared for the first quarter of Fiscal 2020 and Fiscal 2019, respectively.
Dividends on preferred shares
Dividends declared on preferred shares during the 13 weeks ended May 4, 2019 and May 5, 2018 were as follows:
 
Fiscal 2020
 
Fiscal 2019
(in millions)
Cash dividend
per share
 
Total cash
dividends
 
Cash dividend
per share
 
Total cash
dividends
First quarter(1)
$
12.50

 
$
7.8

 
$
12.50

 
$
7.8

(1) 
Signet’s preferred shares dividends results in the dividend payment date being a quarter in arrears from the declaration date. As a result, as of May 4, 2019 and May 5, 2018, $7.8 million and $7.8 million, respectively, has been recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheets reflecting the cash dividends on preferred shares declared for the first quarter of Fiscal 2020 and Fiscal 2019, respectively.
There were no cumulative undeclared dividends on the preferred shares that reduced net income (loss) attributable to common shareholders during the 13 weeks ended May 4, 2019 or May 5, 2018. In addition, deemed dividends of $0.4 million related to accretion of issuance costs associated with the preferred shares was recognized during the 13 weeks ended May 4, 2019 ($0.4 million for the 13 weeks ended May 5, 2018). See Note 6 for additional discussion of the Company’s preferred shares.
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
(in millions, except per share amounts)
 
May 4, 2019
 
May 5, 2018
Numerator:
 
 
 
 
Net income (loss) attributable to common shareholders
 
$
(18.2
)
 
$
(504.8
)
Denominator:
 
 
 
 
Weighted average common shares outstanding
 
51.6

 
59.5

EPS – basic
 
$
(0.35
)
 
$
(8.48
)

15


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 (loss) income 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
(in millions, except per share amounts)
 
May 4, 2019
 
May 5, 2018
Numerator:
 
 
 
 
Net income (loss) attributable to common shareholders
 
$
(18.2
)
 
$
(504.8
)
Numerator for diluted EPS
 
$
(18.2
)
 
$
(504.8
)
 
 
 
 
 
Denominator:
 
 
 
 
Weighted average common shares outstanding
 
51.6

 
59.5

Diluted weighted average common shares outstanding
 
51.6

 
59.5

 
 
 
 
 
EPS – diluted
 
$
(0.35
)
 
$
(8.48
)
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
(in millions)
 
May 4, 2019
 
May 5, 2018
Share awards
 
1.1

 
0.5

Potential impact of preferred shares
 
7.2

 
6.8

Total anti-dilutive shares
 
8.3

 
7.3


16


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
 
 
(in millions)
Foreign
currency
translation
 
Losses on available-for-sale securities, net
 
Gains (losses)
on cash flow
hedges
 
Actuarial
losses
 
Prior
service
credits
 
Accumulated
other
comprehensive
loss
Balance at February 2, 2019
$
(248.4
)
 
$
(0.5
)
 
$
4.0

 
$
(53.8
)
 
$
(4.1
)
 
$
(302.8
)
Other comprehensive income (loss) (“OCI”) before reclassifications
(2.0
)
 
0.3

 
(3.2
)
 

 

 
(4.9
)
Amounts reclassified from AOCI to net income

 

 
(0.4
)
 
0.2

 

 
(0.2
)
Net current period OCI
(2.0
)
 
0.3

 
(3.6
)
 
0.2

 

 
(5.1
)
Balance at May 4, 2019
$
(250.4
)
 
$
(0.2
)
 
$
0.4

 
$
(53.6
)
 
$
(4.1
)
 
$
(307.9
)
The amounts reclassified from AOCI were as follows:
 
Amounts reclassified from AOCI
 
 
 
 
13 weeks ended
 
 
(in millions)
 
May 4, 2019
 
May 5, 2018
 
Statement of operations caption
Losses (gains) on cash flow hedges:
 
 
 
 
 
 
Foreign currency contracts
 
$
(0.3
)
 
$
0.3

 
Cost of sales (see Note 15)
Interest rate swaps
 
(0.6
)
 
(0.3
)
 
Interest expense, net
(see Note 15)
Commodity contracts
 
0.4

 
(0.5
)
 
Cost of sales (see Note 15)
Total before income tax
 
(0.5
)
 
(0.5
)
 
 
Income taxes
 
0.1

 
0.2

 
 
Net of tax
 
(0.4
)
 
(0.3
)
 
 
 
 
 
 
 
 
 
Defined benefit pension plan items:
 
 
 
 
 
 
Amortization of unrecognized actuarial losses
 
0.3

 
0.3

 
Other non-operating income
Amortization of unrecognized net prior service credits
 

 
(0.1
)
 
Other non-operating income
Total before income tax
 
0.3

 
0.2

 
 
Income taxes
 
(0.1
)
 

 
 
Net of tax
 
0.2

 
0.2

 
 
 
 
 
 
 
 
 
Total reclassifications, net of tax
 
$
(0.2
)
 
$
(0.1
)
 
 
10. Income taxes
 
13 weeks ended
 
May 4, 2019
 
May 5, 2018
Effective tax rate before discrete items
14.7
 %
 
28.3
 %
Discrete items recognized
(1.7
)%
 
(13.5
)%
Effective tax rate recognized in statement of operations
13.0
 %
 
14.8
 %
During the 13 weeks ended May 4, 2019, the Company’s effective tax rate was lower than the US federal income tax rate primarily due to the favorable impact of foreign tax rate differences and benefits from global reinsurance arrangements. The forecasted annual effective tax rate excludes the effects of any discrete items that may be recognized in future periods.
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 as of February 2, 2019.

17


11. Accounts receivable
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”). 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”).
In addition, for a five-year term, Signet will remain the issuer of non-prime credit with investment funds managed by CarVal and Castlelake purchasing forward receivables at a discount rate determined in accordance with their respective agreements. Signet will 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 CarVal and Castlelake as of period end are classified as “held for sale” and included in the accounts receivable caption in the condensed consolidated balance sheets. As of May 4, 2019, the accounts receivable, held for sale were recorded at fair value. See Note 16 for additional information regarding the assumptions utilized in the calculation of fair value of the finance receivables held for sale.
The following table presents the components of Signet’s accounts receivable:
(in millions)
May 4, 2019
 
February 2, 2019
 
May 5, 2018
Accounts receivable, held for investment
$
15.3

 
$
19.5

 
$
6.8

Accounts receivable, held for sale
$
7.8

 
$
4.2

 
$