SIGNET JEWELERS LTD, 10-Q filed on 12/1/2017
Quarterly Report
Document and Entity Information
9 Months Ended
Oct. 28, 2017
Nov. 28, 2017
Document And Entity Information [Abstract]
 
 
Document type
10-Q 
 
Amendment flag
false 
 
Document period end date
Oct. 28, 2017 
 
Document fiscal year focus
2018 
 
Document fiscal period focus
Q3 
 
Trading symbol
SIG 
 
Entity registrant name
SIGNET JEWELERS LTD 
 
Entity Central Index Key
0000832988 
 
Current Fiscal Year End Date
--01-28 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares outstanding
 
60,516,066 
Condensed Consolidated Income Statements (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Jul. 29, 2017
Apr. 29, 2017
Oct. 29, 2016
Jul. 30, 2016
Apr. 30, 2016
Oct. 28, 2017
Oct. 29, 2016
Income Statement [Abstract]
 
 
 
 
 
 
 
 
Sales
$ 1,156.9 
 
 
$ 1,186.2 
 
 
$ 3,959.9 
$ 4,138.5 
Cost of sales
(835.8)
 
 
(836.2)
 
 
(2,689.7)
(2,723.2)
Gross margin
321.1 
 
 
350.0 
 
 
1,270.2 
1,415.3 
Selling, general and administrative expenses
(375.9)
 
 
(386.5)
 
 
(1,237.7)
(1,264.9)
Credit transaction, net
(12.2)
 
 
 
 
2.6 
Other operating income, net
72.5 
 
 
68.6 
 
 
221.3 
213.6 
Operating income
5.5 
 
 
32.1 
 
 
256.4 
364.0 
Interest expense, net
(16.6)
 
 
(12.7)
 
 
(42.7)
(36.4)
(Loss) income before income taxes
(11.1)
 
 
19.4 
 
 
213.7 
327.6 
Income taxes
7.2 
 
 
(2.4)
 
 
(45.7)
(81.9)
Net (loss) income
(3.9)
 
 
17.0 
 
 
168.0 
245.7 
Dividends on redeemable convertible preferred shares
(8.2)
 
 
(2.2)
 
 
(24.6)
(2.2)
Net (loss) income attributable to common shareholders
$ (12.1)
 
 
$ 14.8 
 
 
$ 143.4 
$ 243.5 
(Loss) earnings per common share:
 
 
 
 
 
 
 
 
Earnings per common share: basic (usd per share)
$ (0.20)
 
 
$ 0.20 
 
 
$ 2.24 
$ 3.19 
Earnings per common share: diluted (usd per share)
$ (0.20)
 
 
$ 0.20 
 
 
$ 2.24 
$ 3.18 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
Weighted average common shares outstanding: basic (shares)
60.1 
 
 
73.5 
 
 
64.0 
76.4 
Weighted average common shares outstanding: diluted (shares)
60.1 
 
 
73.6 
 
 
64.1 
76.5 
Dividends declared per common share (usd per share)
$ 0.31 
$ 0.31 
$ 0.31 
$ 0.26000000 
$ 0.26 
$ 0.26 
$ 0.93 
$ 0.78000000 
Condensed Consolidated Statements Of Comprehensive Income (Loss) (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Pre-tax amount
 
 
 
 
Foreign currency translation adjustments
$ (6.5)
$ (28.9)
$ 18.6 
$ (38.0)
Available-for-sale securities:
 
 
 
 
Unrealized loss on securities, net
(0.2)
(0.4)
0.6 
0.3 
Cash flow hedges:
 
 
 
 
Unrealized gain
1.3 
1.9 
4.5 
11.2 
Reclassification adjustment for (gains) to net income
(0.8)
(0.2)
(4.1)
2.4 
Pension plan:
 
 
 
 
Actuarial loss
(1.1)
(1.1)
Reclassification adjustment to net income for amortization of actuarial losses
0.7 
0.4 
2.2 
1.2 
Reclassification adjustment to net income for amortization of prior service credits
(0.4)
(0.5)
(1.3)
(1.5)
Net curtailment gain and settlement loss
(3.7)
(3.7)
Total other comprehensive loss
(10.7)
(27.7)
15.7 
(24.4)
Tax (expense) benefit
 
 
 
 
Foreign currency translation adjustments
Available-for-sale securities:
 
 
 
 
Unrealized loss
0.2 
(0.3)
(0.1)
Cash flow hedges:
 
 
 
 
Unrealized gain
(0.4)
(1.8)
(3.0)
Reclassification adjustment for (gains) to net income
0.2 
0.1 
1.0 
(0.8)
Pension plan:
 
 
 
 
Actuarial loss
0.2 
0.2 
Reclassification adjustment to net income for amortization of actuarial losses
(0.1)
(0.4)
(0.2)
Reclassification adjustment to net income for amortization of prior service credits
0.1 
0.2 
0.3 
Net curtailment gain and settlement loss
0.7 
0.7 
Total other comprehensive loss
0.6 
0.4 
(0.4)
(3.8)
After-tax amount
 
 
 
 
Net income
(3.9)
17.0 
168.0 
245.7 
Foreign currency translation adjustments
(6.5)
(28.9)
18.6 
(38.0)
Available-for-sale securities:
 
 
 
 
Unrealized loss
(0.2)
(0.2)
0.3 
0.2 
Cash flow hedges:
 
 
 
 
Unrealized gain
0.9 
1.9 
2.7 
8.2 
Reclassification adjustment for (gains) to net income
(0.6)
(0.1)
(3.1)
1.6 
Pension plan:
 
 
 
 
Actuarial loss
(0.9)
(0.9)
Reclassification adjustment to net income for amortization of actuarial losses
0.6 
0.4 
1.8 
1.0 
Reclassification adjustment to net income for amortization of prior service credits
(0.4)
(0.4)
(1.1)
(1.2)
Net curtailment gain and settlement loss
(3.0)
(3.0)
Total other comprehensive loss
(10.1)
(27.3)
15.3 
(28.2)
Total comprehensive loss
$ (14.0)
$ (10.3)
$ 183.3 
$ 217.5 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Current assets:
 
 
 
Cash and cash equivalents
$ 113.4 
$ 98.7 
$ 82.7 
Accounts receivable, net
640.1 
1,858.0 
1,581.1 
Other receivables
80.3 
95.9 
74.2 
Other current assets
145.0 
136.3 
146.8 
Income taxes
17.3 
4.4 
20.8 
Inventories
2,466.1 
2,449.3 
2,649.4 
Total current assets
3,462.2 
4,642.6 
4,555.0 
Non-current assets:
 
 
 
Property, plant and equipment, net of accumulated depreciation of $1,162.7, $1,049.4 and $1,015.4, respectively
855.1 
822.9 
791.1 
Goodwill
867.1 
517.6 
517.0 
Intangible assets, net
410.4 
417.0 
419.8 
Other assets
169.1 
165.1 
157.5 
Deferred tax assets
1.3 
0.7 
Retirement benefit asset
35.5 
31.9 
47.1 
Total assets
5,800.7 
6,597.8 
6,487.5 
Current liabilities:
 
 
 
Loans and overdrafts
291.8 
91.1 
288.8 
Accounts payable
324.9 
255.7 
382.2 
Accrued expenses and other current liabilities
430.5 
478.2 
402.9 
Deferred revenue
270.3 
276.9 
256.7 
Income taxes
101.8 
4.4 
Total current liabilities
1,317.5 
1,203.7 
1,335.0 
Non-current liabilities:
 
 
 
Long-term debt
696.8 
1,317.9 
1,324.2 
Other liabilities
244.4 
213.7 
219.9 
Deferred revenue
646.1 
659.0 
632.1 
Deferred tax liabilities
143.8 
101.4 
133.4 
Total liabilities
3,048.6 
3,495.7 
3,644.6 
Commitments and contingencies
   
   
   
Shareholders’ equity:
 
 
 
Common shares of $0.18 par value: authorized 500 shares, 60.4 shares outstanding (January 28, 2017: 68.3 outstanding; October 29, 2016: 69.6 outstanding)
15.7 
15.7 
15.7 
Additional paid-in capital
285.6 
280.7 
128.5 
Other reserves
0.4 
0.4 
0.4 
Treasury shares at cost: 26.8 shares (January 28, 2017: 18.9 shares; October 29, 2016: 17.6 shares)
(1,945.2)
(1,494.8)
(1,338.9)
Retained earnings
4,074.9 
3,995.9 
3,727.8 
Accumulated other comprehensive loss
(292.4)
(307.7)
(302.3)
Total shareholders’ equity
2,139.0 
2,490.2 
2,231.2 
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
5,800.7 
6,597.8 
6,487.5 
Series A Redeemable Convertible Preferred Stock
 
 
 
Non-current liabilities:
 
 
 
Series A redeemable convertible preferred shares of $.01 par value: authorized 500 shares, 0.625 shares outstanding (January 28, 2017 and October 29, 2016: 0.625 shares outstanding)
$ 613.1 
$ 611.9 
$ 611.7 
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Accumulated depreciation
$ 1,162.7 
$ 1,049.4 
$ 1,015.4 
Common shares, par value (usd per share)
$ 0.18 
$ 0.18 
$ 0.18 
Common shares, authorized
500,000,000 
500,000,000 
500,000,000 
Common shares, outstanding
60,400,000 
68,300,000 
68,300,000 
Treasury shares, shares
26,800,000 
18,900,000 
11,600,000 
Series A Redeemable Convertible Preferred Stock
 
 
 
Preferred shares, par value (usd per share)
$ 0.01 
$ 0.01 
 
Preferred shares, authorized
500,000,000 
500,000,000 
 
Preferred shares, outstanding
625,000 
625,000 
625,000 
Condensed Consolidated Statements Of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Cash flows from operating activities
 
 
Net income
$ 168.0 
$ 245.7 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
147.1 
138.8 
Amortization of unfavorable leases and contracts
(10.8)
(14.9)
Pension benefit
(3.6)
(1.3)
Share-based compensation
11.0 
14.0 
Deferred taxation
41.7 
60.9 
Excess tax benefit from exercise of share awards
(1.3)
Credit transaction, net
(30.9)
Amortization of debt discount and issuance costs
3.2 
2.2 
Other non-cash movements
1.5 
1.9 
Changes in operating assets and liabilities:
 
 
Decrease in accounts receivable
286.1 
174.0 
Proceeds from sale of in-house finance receivables
960.2 
Decrease in other receivables and other assets
19.6 
9.0 
Increase in other current assets
(2.5)
(15.4)
Decrease (increase) in inventories
4.6 
(217.0)
Increase in accounts payable
39.7 
114.1 
Decrease in accrued expenses and other liabilities
(5.4)
(82.2)
Decrease in deferred revenue
(29.5)
(2.5)
Decrease in income taxes payable
(115.3)
(62.6)
Pension plan contributions
(2.4)
(2.5)
Net cash provided by operating activities
1,482.3 
360.9 
Investing activities
 
 
Purchase of property, plant and equipment
(166.1)
(195.6)
Purchase of available-for-sale securities
(1.7)
(10.4)
Proceeds from sale of available-for-sale securities
0.9 
10.0 
Acquisition of R2Net Inc., net of cash acquired
(332.4)
Net cash used in investing activities
(499.3)
(196.0)
Financing activities
 
 
Dividends paid on common shares
(57.7)
(57.5)
Dividends paid on redeemable convertible preferred shares
(26.9)
Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
611.6 
Proceeds from revolving credit facility
605.0 
598.0 
Repayments of revolving credit facility
(405.0)
(339.0)
Repurchase of common shares
(460.0)
(1,000.0)
Repayments of bank overdrafts
(5.9)
(13.3)
Other financing activities
(4.5)
(6.0)
Net cash used in financing activities
(970.7)
(218.2)
Cash and cash equivalents at beginning of period
98.7 
137.7 
Increase (decrease) in cash and cash equivalents
12.3 
(53.3)
Effect of exchange rate changes on cash and cash equivalents
2.4 
(1.7)
Cash and cash equivalents at end of period
113.4 
82.7 
Term Loan
 
 
Financing activities
 
 
Proceeds from term and bridge loans
350.0 
Repayments of debt
(365.7)
(12.0)
Securitization facility
 
 
Financing activities
 
 
Repayments of debt
(2,345.9)
(1,837.1)
Proceeds from securitization facility
1,745.9 
1,837.1 
Credit Facility |
Term Loan
 
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Amortization of debt discount and issuance costs
0.6 
0.7 
Credit Facility |
Revolving Credit Facility
 
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Amortization of debt discount and issuance costs
0.3 
0.3 
Financing activities
 
 
Proceeds from revolving credit facility
605.0 
598.0 
Repayments of revolving credit facility
$ (405.0)
$ (339.0)
Condensed Consolidated Statements Of Shareholders' Equity (Unaudited) (USD $)
In Millions, unless otherwise specified
Total
Common shares at par value
Additional paid-in capital
Other reserves
Treasury shares
Retained earnings
Accumulated other comprehensive loss
Beginning Balance at Jan. 28, 2017
$ 2,490.2 
$ 15.7 
$ 280.7 
$ 0.4 
$ (1,494.8)
$ 3,995.9 
$ (307.7)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
Net income
168.0 
 
 
 
 
168.0 
 
Other comprehensive income
15.3 
 
 
 
 
 
15.3 
Dividends on common shares
(58.7)
 
 
 
 
(58.7)
 
Dividends on redeemable convertible preferred shares
(24.6)
 
 
 
 
(24.6)
 
Repurchase of common shares
(460.0)
 
 
 
(460.0)
 
 
Net settlement of equity based awards
(2.4)
 
(6.1)
 
9.4 
(5.7)
 
Share options exercised
0.2 
 
 
 
0.2 
 
 
Share-based compensation expense
11.0 
 
11.0 
 
 
 
 
Ending Balance at Oct. 28, 2017
$ 2,139.0 
$ 15.7 
$ 285.6 
$ 0.4 
$ (1,945.2)
$ 4,074.9 
$ (292.4)
Organization and principal accounting policies
Organization and principal accounting policies
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 five reportable segments: the Sterling Jewelers division, the Zale division, which consists of the Zale Jewelry and Piercing Pagoda segments, the UK Jewelry division 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 5 for additional discussion of the Company’s segments.
On September 12, 2017, the Company completed the acquisition of R2Net Inc., a Delaware corporation (“R2Net”). See Note 4 for additional information regarding the acquisition.
In October 2017, the Company, through its subsidiary Sterling Jewelers Inc. (“Sterling”), completed the sale of the prime-only quality portion of Sterling’s in-house finance receivable portfolio to Comenity Bank (“Comenity”). See Note 3 for additional information regarding the transaction.
Signet’s sales are seasonal, with the first quarter slightly exceeding 20% of annual sales, the second and third quarters each approximating 20% and the fourth quarter accounting for almost 40% of annual sales, with December being by far the most important month of the year. The “Holiday Season” consists of results for the months of November and December. As a result, approximately 45% to 55% of Signet’s annual operating income normally occurs in the fourth quarter, comprised of nearly all of the UK Jewelry and Zale divisions’ annual operating income and approximately 40% to 45% of the Sterling Jewelers division’s annual operating income.
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 January 28, 2017 filed with the SEC on March 16, 2017.
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, 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 2018 and Fiscal 2017 refer to the 53 week period ending February 3, 2018 and the 52 week period ending January 28, 2017, respectively. Within these condensed consolidated financial statements, the third quarter of the relevant fiscal years 2018 and 2017 refer to the 13 and 39 weeks ended October 28, 2017 and October 29, 2016, respectively.
Foreign currency translation
The financial position and operating results of certain foreign operations, including the UK Jewelry division and the Canadian operations of the Zale Jewelry 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 income statements.
See Note 9 for additional information regarding the Company’s foreign currency translation.
New accounting pronouncements
New accounting pronouncements
New accounting pronouncements
New accounting pronouncements adopted during the period
Inventory
In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” The new guidance states that inventory will be measured at the lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The adoption of this guidance in the first quarter of Fiscal 2018 did not have a material impact on the Company’s financial position or results of operations.
Share-based compensation
In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted all aspects of this guidance prospectively in the first quarter of Fiscal 2018 with a policy election to continue to estimate expected forfeitures in determining the amount of share-based compensation expense to be recognized. The adoption of this guidance did not have a material impact on the Company’s financial position or results of operations. See Note 10 for additional information regarding the impact on the Company’s results of operations in the first quarter of Fiscal 2018.
New accounting pronouncements to be adopted in future periods
Derivatives and Hedging
In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The new guidance 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. ASU No. 2017-12 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Signet is currently assessing the timing of adoption and the impact this guidance will have on the Company’s financial position or results of operations.
Credit Losses
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The new guidance 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 collectibility. ASU No. 2016-13 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted. Signet currently expects to adopt this guidance when effective, and continues to assess the impact the adoption of this guidance will have on the Company’s financial position or results of operations.
Revenue recognition
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The new guidance affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 provides alternative methods of retrospective adoption. In August 2015, the FASB issued an update (ASU No. 2015-14) that defers the effective date by one year. As a result, ASU No. 2014-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016, including interim periods within that annual period.
The FASB has recently issued updates to certain aspects of the guidance to address implementation issues. In March 2016, the FASB issued additional guidance concerning “Principal versus Agent” considerations (reporting revenue gross versus net); in April 2016, the FASB issued additional guidance on identifying performance obligations and licensing; and in May 2016, the FASB issued additional guidance on collectibility, noncash consideration, presentation of sales tax, and transition. These updates are intended to improve the operability and understandability of the implementation guidance and have the same effective date and transition requirements as ASU No. 2014-09 guidance discussed above. Management continues to evaluate the impact this ASU, the related amendments and the interpretive guidance will have on the Company's consolidated financial statements.
Signet is in the process of evaluating contracts with customers under the new guidance and cannot currently estimate the financial statement impact of adoption. The Company expects to progress through its assessment during Fiscal 2018 and will adopt this guidance in the first quarter of our fiscal year ending February 2, 2019. The Company is evaluating the impact of the standard through a cross-functional approach to analyze the impacts of the guidance across all of its revenue streams. This includes the review of current accounting policies and practices to identify potential differences that would result from applying the guidance. The majority of the Company’s revenue is generated from sales of finished products, which will continue to be recognized when control is transferred to the customer. The Company intends to adopt the standard using the modified retrospective method.
Financial instruments
In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The new guidance primarily impacts accounting for equity investments and financial liabilities under the fair value option, as well as, the presentation and disclosure requirements for financial instruments. Under the new guidance, equity investments will generally be measured at fair value, with subsequent changes in fair value recognized in net income. ASU No. 2016-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Signet plans to adopt this guidance in the first quarter of our fiscal year ending February 2, 2019. Signet does not expect the adoption of this guidance to have a material impact on the Company’s financial position or results of operations.
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 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. ASU No. 2016-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Signet is currently assessing the timing of adoption which is effective for the first quarter of our fiscal year ending February 1, 2020 and the impact that adopting this guidance will have on the Company’s financial position or results of operations.
Liabilities
In March 2016, the FASB issued ASU No. 2016-04, “Liabilities - Extinguishments of Liabilities (Subtopic 405-20).” The new guidance addresses diversity in practice related to the derecognition of a prepaid stored-value product liability. Liabilities related to the sale of prepaid stored-value products within the scope of this update are financial liabilities. ASU No. 2016-04 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Signet plans to adopt this guidance in the first quarter of our fiscal year ending February 2, 2019. Signet does not expect the adoption of this guidance to have a material impact on the Company’s financial position or results of operations.
Intangibles
In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment.” The new guidance requires a single-step quantitative test to identify and measure goodwill impairment based on the excess of a reporting unit's carrying amount over its fair value. A qualitative assessment may still be completed first for an entity to determine if a quantitative impairment test is necessary. ASU No. 2017-04 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted. Signet is currently assessing the timing of adoption and the impact this guidance will have on the Company’s financial position or results of operations.
Retirement Benefits
In March 2017, the FASB issued ASU No. 2017-07, “Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The new guidance requires entities to present the service cost component of the net periodic pension cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Entities will present the other components of net benefit cost separately from the service cost component and outside of operating profit within the income statement. In addition, only the service cost component will be eligible for capitalization in assets. ASU No. 2017-07 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Signet is currently assessing the timing of adoption and the impact this guidance will have on the Company’s financial position or results of operations.
Credit transaction, net
Credit transaction, net
Credit transaction, net
In October 2017, Signet, through its subsidiary Sterling, completed the sale of the prime-only credit quality portion of Sterling’s in-house finance receivable portfolio to Comenity. The following events summarize the credit transaction:
Receivables reclassification: In the second quarter of Fiscal 2018, certain in-house finance receivables that met the criteria for sale to Comenity were reclassified from "held for investment" to "held for sale." Accordingly, the receivables were recorded at the lower of cost (par) or fair value, resulting in the reversal of the related allowance for credit losses of $20.7 million. This reversal was recorded in credit transaction, net in the condensed consolidated income statements for the 39 weeks ended October 28, 2017.
Proceeds received: In October 2017, the Company received $960.2 million in cash consideration reflecting the par value of the receivables sold. In addition, the Company recognized a beneficial interest asset of $10.2 million representing the present value of the cash flows the Company expects to receive under the economic profit sharing agreement related to the receivables sold. The gain upon recognition of the beneficial interest asset was recorded in credit transaction, net in the condensed consolidated income statements for the 13 and 39 weeks ended October 28, 2017.
Expenses: During the 39 weeks ended October 28, 2017, the Company incurred $28.3 million of transaction-related costs. These costs were recorded in credit transaction, net in the condensed consolidated income statements.
Asset-backed securitization facility termination: In October 2017, the Company terminated the asset-backed securitization facility in order to transfer the receivables free and clear. The asset-backed securitization facility had a principal balance outstanding of $600.0 million at the time of termination. The payoff was funded through the proceeds received from the par value of receivables sold. See Note 17 for additional information regarding the asset-backed securitization facility.
Program agreement: Comenity provides credit to prime-only credit quality customers with an initial term of seven years and, unless terminated by either party, additional renewal terms of two years. Under the Program Agreement, Comenity established a program to issue Sterling credit cards to be serviced, marketed and promoted in accordance with the terms of the agreement. Subject to limited exceptions, Comenity is the exclusive issuer of private label credit cards or an installment or other closed end loan product in the United States bearing specified Company trademarks, including “Kay”, “Jared” and specified regional brands, but excluding “Zale”, during the term of the agreement. The pre-existing arrangement with Comenity for the issuing of Zale credit cards will be unaffected by the execution of the Program Agreement. Upon expiration or termination by either party of the Program Agreement, Sterling retains the option to purchase, or arrange the purchase by a third party of, the program assets from Comenity on terms that are no more onerous to Sterling than those applicable to Comenity under the Purchase Agreement, or in the case of a purchase by a third party, on customary terms. Additionally, the Company received a signing bonus, which may be repayable under certain conditions if the Program Agreement is terminated, and a right to receive future payments related to the performance of the credit program under an economic profit sharing agreement. The Program Agreement contains customary representations, warranties and covenants.
Additionally, Signet and Genesis Financial Solutions (“Genesis”) entered into a five-year servicing agreement in October 2017, under which Genesis will provide credit servicing functions for Signet’s existing non-prime accounts receivable, as well as future non-prime account originations. Signet will retain the existing non-prime accounts receivable on its balance sheet and continue to originate the majority of new accounts until the expected completion of the second phase of credit outsourcing.
Accounts receivable, net
In October 2017, the Company completed the sale of a portion of the Sterling Jewelers customer in-house finance receivables. The receivables sold, which were classified as "held for sale" as of the second quarter of Fiscal 2018, are no longer reported within the condensed consolidated balance sheets. See Note 3 for additional information regarding the sale of the prime portion of the customer in-house finance receivable portfolio. 
Signet’s accounts receivable primarily consist of US customer in-house financing receivables. The accounts receivable portfolio consists of a population that is of similar characteristics and is evaluated collectively for impairment.
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Accounts receivable by portfolio segment, net:
 
 
 
 
 
Sterling Jewelers customer in-house finance receivables
$
597.7

 
$
1,813.3

 
$
1,546.3

Zale customer in-house finance receivables
32.3

 
33.4

 
26.4

Other accounts receivable
10.1

 
11.3

 
8.4

Total accounts receivable, net
$
640.1

 
$
1,858.0

 
$
1,581.1


Signet grants credit to customers based on a variety of credit quality indicators, including consumer financial information and prior payment experience. On an ongoing basis, management monitors the credit exposure based on past due status and collection experience, as it has found a meaningful correlation between the past due status of customers and the risk of loss.
During the third quarter of Fiscal 2016, Signet implemented a program to provide in-house credit to customers in the Zale division’s US locations. The allowance for credit losses associated with Zale customer in-house finance receivables was immaterial as of October 28, 2017, January 28, 2017 and October 29, 2016. Effective October 20, 2017, the Zale customer in-house financing programs are being underwritten and serviced by a third party for newly originated balances after the effective date.
Other accounts receivable is comprised primarily of accounts receivable relating to the insurance loss replacement business in the UK Jewelry division of $6.7 million (January 28, 2017 and October 29, 2016: $11.0 million and $7.7 million, respectively).
The allowance for credit losses associated with the portion of Sterling Jewelers customer in-house finance receivables previously classified as “held for sale” was reversed during the second quarter of Fiscal 2018. The activity in the allowance for credit losses on Sterling Jewelers customer in-house finance receivables is shown below:
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
Beginning balance
$
(138.7
)
 
$
(130.0
)
Charge-offs, net
160.9

 
143.1

Recoveries
30.1

 
26.8

Provision
(181.8
)
 
(172.9
)
Reversal of allowance on receivables previously held for sale
20.7

 

Ending balance
$
(108.8
)
 
$
(133.0
)
Ending receivable balance evaluated for impairment
706.5

 
1,679.3

Sterling Jewelers customer in-house finance receivables, net
$
597.7

 
$
1,546.3


Net bad debt expense is defined as the provision expense less recoveries.
The credit quality indicator and age analysis of Sterling Jewelers customer in-house finance receivables are shown below:
   
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
Performing:
 
 
 
 
 
 
 
 
 
 
 
Current, aged 0 – 30 days
$
586.5

 
$
(50.3
)
 
$
1,538.2

 
$
(47.2
)
 
$
1,294.9

 
$
(39.3
)
Past due, aged 31 – 60 days
40.3

 
(3.5
)
 
282.0

 
(9.0
)
 
250.6

 
(8.1
)
Past due, aged 61 – 90 days
27.1

 
(2.4
)
 
51.6

 
(2.3
)
 
50.7

 
(2.5
)
Non Performing:
 
 
 
 
 
 
 
 
 
 
 
Past due, aged more than 90 days
52.6

 
(52.6
)
 
80.2

 
(80.2
)
 
83.1

 
(83.1
)
 
$
706.5

 
$
(108.8
)
 
$
1,952.0

 
$
(138.7
)
 
$
1,679.3

 
$
(133.0
)
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(as a % of the ending receivable balance)
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
Performing
 
 
 
 
 
 
 
 
 
 
 
Current, aged 0 – 30 days
83.0
%
 
8.6
%
 
78.8
%
 
3.1
%
 
77.2
%
 
3.0
%
Past due, aged 31 – 60 days
5.7
%
 
8.7
%
 
14.5
%
 
3.2
%
 
14.9
%
 
3.2
%
Past due, aged 61 – 90 days
3.8
%
 
8.9
%
 
2.6
%
 
4.5
%
 
3.0
%
 
4.9
%
Non Performing
 
 
 
 
 
 
 
 
 
 
 
Past due, aged more than 90 days
7.5
%
 
100.0
%
 
4.1
%
 
100.0
%
 
4.9
%
 
100.0
%
 
100.0
%
 
15.4
%
 
100.0
%
 
7.1
%
 
100.0
%
 
7.9
%

Securitized credit card receivables
The Sterling Jewelers division previously securitized its credit card receivables through its Sterling Jewelers Receivables Master Note Trust. As a condition of closing the credit transaction, the Company terminated the asset-backed securitization facility to transfer the receivables free and clear. See Note 17 for additional information regarding the asset-backed securitization facility.
Acquisition
Acquisition
Acquisition
On September 12, 2017, the Company acquired the outstanding shares of R2Net, the owner of online jewelry retailer JamesAllen.com and Segoma Imaging Technologies. The acquisition rapidly enhanced the Company’s digital capabilities and accelerated its OmniChannel strategy, while adding a millennial-focused online retail brand to the Company’s portfolio. The Company paid $332.4 million, net of acquired cash of $47.3 million, for R2Net. The merger agreement provides for a post-closing working capital adjustment which is anticipated to be finalized during the fourth quarter of Fiscal 2018. The total consideration paid was funded with a $350 million bridge loan. See Note 17 for additional information regarding the bridge loan.
The transaction was accounted for as a business combination during the third quarter of Fiscal 2018 with R2Net becoming a wholly-owned consolidated subsidiary of Signet. Prior to closing the acquisition, the Company incurred approximately $9.4 million of acquisition-related costs for professional services during the 39 weeks ended October 28, 2017. Acquisition-related costs were recorded as selling, general and administrative expenses in the condensed consolidated income statements. The results of R2Net subsequent to the acquisition date are reported as a component of the results of the Sterling Jewelers division. See Note 5 for segment information. Pro forma results of operations have not been presented, as the impact on the Company’s consolidated financial results was not material.
Under the acquisition method of accounting, the identifiable assets acquired and liabilities assumed are recorded at their estimated fair values on the acquisition date, with the remaining unallocated net purchase price recorded as goodwill. Goodwill generated from the acquisition is primarily attributable to expected synergies and will not be deductible for tax purposes. As of October 28, 2017, the Company is in the process of finalizing the net assets acquired in the acquisition, most notably, the identification and valuation of intangible assets, including tradenames and technology-related assets. The following table summarizes the preliminary fair values identified for the assets acquired and liabilities assumed in the R2Net acquisition as of September 12, 2017:
(in millions)
Initial amounts
Cash and cash equivalents
$
47.3

Inventories
12.1

Other current assets
9.7

Property, plant and equipment
3.5

Current liabilities
(41.4
)
Fair value of net assets acquired
31.2

Goodwill(1)
348.5

Total consideration transferred
$
379.7


(1) 
The amount of goodwill generated will be adjusted for any additional assets or liabilities identified by the Company or for any adjustments to the preliminary fair values identified for the assets acquired and liabilities assumed in the R2Net acquisition reflected above.
Segment information
Segment information
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’s sales are derived from the retailing of jewelry, watches, other products and services as generated through the management of its five reportable segments: the Sterling Jewelers division, the Zale division, which consists of the Zale Jewelry and Piercing Pagoda segments, the UK Jewelry division and Other.
The Sterling Jewelers division operates in all 50 US states. Its stores operate nationally in malls and off-mall locations principally as Kay (Kay Jewelers and Kay Jewelers Outlet) and Jared (Jared The Galleria Of Jewelry and Jared Vault). The division also operates a variety of mall-based regional brands and the JamesAllen.com website, which was acquired in the R2Net acquisition. The results for the Sterling Jewelers division include R2Net results for the 47 day period since September 12, 2017, the date of acquisition. See Note 4 for additional information.
The Zale division operates jewelry stores (Zale Jewelry) and kiosks (Piercing Pagoda), located primarily in shopping malls throughout the US, Canada and Puerto Rico. Zale Jewelry includes the US store brand Zales (Zales Jewelers and Zales Outlet), which operates in all 50 US states, and the Canadian store brand Peoples Jewellers, which operates in nine provinces. The division also operates the Gordon’s Jewelers and Mappins regional brands. Piercing Pagoda operates through mall-based kiosks.
The UK Jewelry division 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, including subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones, that are below the quantifiable threshold for separate disclosure as a reportable segment and unallocated corporate administrative functions. Acquisition-related costs incurred prior to closing the R2Net transaction are reported within the Other reportable segment.
 
13 weeks ended
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Sales:
 
 
 
 
 
 
 
Sterling Jewelers
$
698.7

 
$
712.5

 
$
2,437.8

 
$
2,532.3

Zale Jewelry
268.2

 
282.4

 
933.7

 
994.8

Piercing Pagoda
55.4

 
53.4

 
187.4

 
179.4

UK Jewelry
128.4

 
130.3

 
382.8

 
419.5

Other
6.2

 
7.6

 
18.2

 
12.5

Total sales
$
1,156.9

 
$
1,186.2

 
$
3,959.9

 
$
4,138.5

 
 
 
 
 
 
 
 
Operating income:
 
 
 
 
 
 
 
Sterling Jewelers
$
73.7

(1) 
$
78.6

 
$
362.6

(2) 
$
417.8

Zale Jewelry
(15.7
)
 
(19.3
)
 
(12.4
)
 
(0.5
)
Piercing Pagoda
(4.2
)
 
(5.4
)
 

 
2.2

UK Jewelry
(1.7
)
 

 
(1.9
)
 
3.0

Other
(46.6
)
(3) 
(21.8
)
 
(91.9
)
(4) 
(58.5
)
Total operating income
$
5.5

 
$
32.1

 
$
256.4

 
$
364.0


(1) 
For the 13 weeks ended October 28, 2017, amount includes $10.2 million gain upon recognition of beneficial interest in connection with the sale of the prime portion of in-house receivables. See Note 3 for additional information.
(2) 
For the 39 weeks ended October 28, 2017, amount includes $20.7 million gain related to the reversal of the allowance for credit losses for the in-house receivables sold, as well as the $10.2 million gain upon recognition of beneficial interest in connection with the sale of the prime portion of in-house receivables. See Note 3 for additional information.
(3) 
For the 13 weeks ended October 28, 2017, amount includes $22.4 million of transaction costs related to the credit transaction and $8.1 million of R2Net acquisition costs. See Note 3 and Note 4 for additional information regarding credit transaction and acquisition of R2Net, respectively.
(4) 
For the 39 weeks ended October 28, 2017, amount includes $28.3 million of transaction costs related to the credit transaction, $9.4 million of R2Net acquisition costs, and $3.4 million of CEO transition costs. See Note 3 and Note 4 for additional information regarding credit transaction and acquisition of R2Net, respectively.
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Total assets:
 
 
 
 
 
Sterling Jewelers
$
3,260.0

 
$
4,015.4

 
$
3,715.6

Zale Jewelry
1,885.0

 
1,940.7

 
2,061.7

Piercing Pagoda
139.8

 
141.6

 
136.1

UK Jewelry
404.8

 
372.6

 
407.1

Other
111.1

 
127.5

 
167.0

Total assets
$
5,800.7

 
$
6,597.8

 
$
6,487.5

Redeemable preferred shares
Redeemable preferred shares
Redeemable preferred shares
On October 5, 2016, the Company issued 625,000 shares of Series A Convertible Preference Shares (“preferred shares”) to Green Equity Investors VI, L.P., Green Equity Investors Side VI, L.P., LGP Associates VI-A LLC and LGP Associates VI-B LLC, all affiliates of Leonard Green & Partners, L.P., (together, 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)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Conversion rate
10.7707

 
10.6529

 
10.6529

Conversion price
$
92.8445

 
$
93.8712

 
$
93.8712

Potential impact of preferred shares if-converted to common shares
6.7

 
6.7

 
6.7

Liquidation preference
$
632.8

 
$
636.3

 
$
627.1


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 $1.8 million as of October 28, 2017 (January 28, 2017 and October 29, 2016: $0.6 million and $0.1 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 28, 2017, respectively ($0.1 million for the 13 and 39 weeks ended October 29, 2016).
Shareholders' equity
Shareholders' equity
Shareholders’ equity
Share repurchases
In February 2016, the Board of Directors authorized the repurchase of Signet’s common shares up to $750.0 million (the “2016 Program”). In August 2016, the Board of Directors increased its authorized share repurchase program by $625.0 million, bringing the total authorization for the 2016 Program to $1,375.0 million. The 2016 Program may be suspended or discontinued at any time without notice.
Common shares repurchased during the 39 weeks ended October 28, 2017 and October 29, 2016 were as follows:
 
 
 
39 weeks ended October 28, 2017
 
39 weeks ended October 29, 2016
(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
2016 Program(1)
$
1,375.0

 
8.1

 
$
460.0

 
$
56.91

 
8.7

 
$
706.9

 
$
81.32

2013 Program(2)
$
350.0

 
n/a

 
n/a

 
n/a

 
1.2

 
135.6

 
$
111.26

Total
 
 
8.1

 
$
460.0

 
$
56.91

 
9.9

 
$
842.5

 
$
85.00

(1) 
The 2016 Program had $50.6 million remaining as of October 28, 2017.
(2) 
The 2013 Program was completed in May 2016.
n/a
Not applicable.
In June 2017, the Board of Directors authorized a new program to repurchase $600.0 million of Signet’s common shares (the “2017 Program”). The 2017 Program may be suspended or discontinued at any time without notice. The total authorization remaining under all authorized programs as of October 28, 2017 was $650.6 million.
Dividends on common shares
 
Fiscal 2018
 
Fiscal 2017
(in millions, except per share amounts)
Cash dividend per share
 
Total
dividends
 
Cash dividend
per share
 
Total
dividends
First quarter
$
0.31

 
$
21.3

 
$
0.26

 
$
20.4

Second quarter
0.31

 
18.7

 
0.26

 
19.7

Third quarter(1)
0.31

 
18.7

 
0.26

 
18.1

Total
$
0.93

 
$
58.7

 
$
0.78

 
$
58.2

(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 October 28, 2017 and October 29, 2016, $18.7 million and $18.1 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 third quarter of Fiscal 2018 and Fiscal 2017, respectively.
Dividends on preferred shares
 
Fiscal 2018
 
Fiscal 2017
(in millions)
Total cash
dividends
 
Total cash
dividends
First quarter
$
7.8

 
$

Second quarter
7.8

 

Third quarter(1)
7.8

 

Total
$
23.4

 
$

(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 October 28, 2017 and October 29, 2016, $7.8 million and $2.1 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 third quarter of Fiscal 2018 and Fiscal 2017, respectively.
There were no cumulative undeclared dividends on the preferred shares that reduced net (loss) income attributable to common shareholders during the 13 and 39 weeks ended October 28, 2017 ($2.1 million for the 13 and 39 weeks ended October 29, 2016). In addition, deemed dividends of $0.4 million and $1.2 million related to accretion of issuance costs associated with the preferred shares was recognized during the 13 and 39 weeks ended October 28, 2017, respectively ($0.1 million for the 13 and 39 weeks ended October 29, 2016). See Note 6 for additional discussion of the Company’s preferred shares.
Earnings (loss) per common share (EPS)
Earnings (loss) per common share (“EPS”)
arnings (loss) per common share (EPS)
During Fiscal 2018, basic EPS is computed by dividing net (loss) income 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 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Numerator:
 
 
 
 
 
 
 
Net (loss) income attributable to common shareholders
$
(12.1
)
 
$
14.8

 
$
143.4

 
$
243.5

Denominator:
 
 
 
 
 
 
 
Weighted average common shares outstanding
60.1

 
73.5

 
64.0

 
76.4

EPS – basic
$
(0.20
)
 
$
0.20

 
$
2.24

 
$
3.19


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 and restricted stock units issued under the Omnibus Plan and stock options issued under the Share Saving Plans and Executive 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
 
39 weeks ended
(in millions, except per share amounts)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Numerator:
 
 
 
 
 
 
 
Net (loss) income attributable to common shareholders
$
(12.1
)
 
$
14.8

 
$
143.4

 
$
243.5

Add: Dividends on preferred shares

 

 

 

Numerator for diluted EPS
$
(12.1
)
 
$
14.8

 
$
143.4

 
$
243.5

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Weighted average common shares outstanding
60.1

 
73.5

 
64.0

 
76.4

Plus: Dilutive effect of share awards

 
0.1

 
0.1

 
0.1

Diluted weighted average common shares outstanding
60.1

 
73.6

 
64.1

 
76.5

 
 
 
 
 
 
 
 
EPS – diluted
$
(0.20
)
 
$
0.20

 
$
2.24

 
$
3.18


The calculation of diluted EPS excludes the following items for each respective period on the basis that their effect would be anti-dilutive.
(in millions)
October 28, 2017
 
October 29, 2016
Share awards
0.3

 
0.3

Potential impact of preferred shares
6.7

 
6.7

Total anti-dilutive shares
7.0

 
7.0

Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss)
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 January 28, 2017
$
(263.4
)
 
$
(0.4
)
 
$
2.4

 
$
(55.5
)
 
$
9.2

 
$
(307.7
)
Other comprehensive income (“OCI”) before reclassifications
18.6

 
0.3

 
2.7

 
(0.9
)
 

 
20.7

Amounts reclassified from AOCI to net income

 

 
(3.1
)
 
4.0

 
(6.3
)
 
(5.4
)
Net current period OCI
18.6

 
0.3

 
(0.4
)
 
3.1

 
(6.3
)
 
15.3

Balance at October 28, 2017
$
(244.8
)
 
$
(0.1
)
 
$
2.0

 
$
(52.4
)
 
$
2.9

 
$
(292.4
)

The amounts reclassified from AOCI were as follows:
 
Amounts reclassified from AOCI
 
 
 
13 weeks ended
 
39 weeks ended
 
 
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
 
Income statement caption
(Gains) losses on cash flow hedges:
 
 
 
 
 
 
 
 
 
Foreign currency contracts
$
(0.8
)
 
$
(0.4
)
 
$
(3.0
)
 
$
(1.0
)
 
Cost of sales (see Note 15)
Interest rate swaps

 
0.5

 
0.4

 
1.7

 
Interest expense, net
(see Note 15)
Commodity contracts

 
(0.3
)
 
(1.5
)
 
1.7

 
Cost of sales (see Note 15)
Total before income tax
(0.8
)
 
(0.2
)
 
(4.1
)
 
2.4

 
 
Income taxes
0.2

 
0.1

 
1.0

 
(0.8
)
 
 
Net of tax
(0.6
)
 
(0.1
)
 
(3.1
)
 
1.6

 
 
 
 
 
 
 
 
 
 
 
 
Defined benefit pension plan items:
 
 
 
 
 
 
 
 
 
Amortization of unrecognized actuarial losses
0.7

 
0.4

 
2.2

 
1.2

 
Selling, general and administrative expenses(1)
Amortization of unrecognized net prior service credits
(0.4
)
 
(0.5
)
 
(1.3
)
 
(1.5
)
 
Selling, general and administrative expenses(1)
Net curtailment gain and settlement loss
(3.7
)
 

 
(3.7
)
 

 
Selling, general and administrative expenses(1)
Total before income tax
(3.4
)
 
(0.1
)
 
(2.8
)
 
(0.3
)
 
 
Income taxes
0.6

 
0.1

 
0.5

 
0.1

 
 
Net of tax
(2.8
)
 

 
(2.3
)
 
(0.2
)
 
 
 
 
 
 
 
 
 
 
 
 
Total reclassifications, net of tax
$
(3.4
)
 
$
(0.1
)
 
$
(5.4
)
 
$
1.4

 
 
(1) 
These items are included in the computation of net periodic pension benefit. See Note 22 for additional information.
Income taxes
Income taxes
Income taxes
 
39 weeks ended
 
October 28, 2017
 
October 29, 2016
Forecasted annual effective tax rate
21.2
%
 
25.0
%
Discrete items recognized
0.2
%
 
%
Effective tax rate recognized in income statement
21.4
%
 
25.0
%

As disclosed in Note 2, the Company adopted ASU 2016-09 during the first quarter of Fiscal 2018. The Company anticipates the adoption of this accounting guidance related to share-based compensation to increase the periodic volatility in future effective tax rates as it will result in additional discrete items being recognized in future periods when the deduction for tax purposes for share awards does not equal the cumulative compensation costs of the share awards for financial reporting purposes. To the extent there are discrete items that are not included in the forecasted annual effective tax rate, the actual effective tax rate will differ from the forecasted annual effective tax rate. During Fiscal 2018, the Company recognized incremental tax expense for a discrete item related to the tax shortfall associated with share awards vesting subsequent to the adoption of the new share-based compensation accounting guidance in ASC No. 2016-09.
During the 39 weeks ended October 28, 2017, the Company’s forecasted annual 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 and financing 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 January 28, 2017.
Accounts receivable, net
Accounts receivable, net
Credit transaction, net
In October 2017, Signet, through its subsidiary Sterling, completed the sale of the prime-only credit quality portion of Sterling’s in-house finance receivable portfolio to Comenity. The following events summarize the credit transaction:
Receivables reclassification: In the second quarter of Fiscal 2018, certain in-house finance receivables that met the criteria for sale to Comenity were reclassified from "held for investment" to "held for sale." Accordingly, the receivables were recorded at the lower of cost (par) or fair value, resulting in the reversal of the related allowance for credit losses of $20.7 million. This reversal was recorded in credit transaction, net in the condensed consolidated income statements for the 39 weeks ended October 28, 2017.
Proceeds received: In October 2017, the Company received $960.2 million in cash consideration reflecting the par value of the receivables sold. In addition, the Company recognized a beneficial interest asset of $10.2 million representing the present value of the cash flows the Company expects to receive under the economic profit sharing agreement related to the receivables sold. The gain upon recognition of the beneficial interest asset was recorded in credit transaction, net in the condensed consolidated income statements for the 13 and 39 weeks ended October 28, 2017.
Expenses: During the 39 weeks ended October 28, 2017, the Company incurred $28.3 million of transaction-related costs. These costs were recorded in credit transaction, net in the condensed consolidated income statements.
Asset-backed securitization facility termination: In October 2017, the Company terminated the asset-backed securitization facility in order to transfer the receivables free and clear. The asset-backed securitization facility had a principal balance outstanding of $600.0 million at the time of termination. The payoff was funded through the proceeds received from the par value of receivables sold. See Note 17 for additional information regarding the asset-backed securitization facility.
Program agreement: Comenity provides credit to prime-only credit quality customers with an initial term of seven years and, unless terminated by either party, additional renewal terms of two years. Under the Program Agreement, Comenity established a program to issue Sterling credit cards to be serviced, marketed and promoted in accordance with the terms of the agreement. Subject to limited exceptions, Comenity is the exclusive issuer of private label credit cards or an installment or other closed end loan product in the United States bearing specified Company trademarks, including “Kay”, “Jared” and specified regional brands, but excluding “Zale”, during the term of the agreement. The pre-existing arrangement with Comenity for the issuing of Zale credit cards will be unaffected by the execution of the Program Agreement. Upon expiration or termination by either party of the Program Agreement, Sterling retains the option to purchase, or arrange the purchase by a third party of, the program assets from Comenity on terms that are no more onerous to Sterling than those applicable to Comenity under the Purchase Agreement, or in the case of a purchase by a third party, on customary terms. Additionally, the Company received a signing bonus, which may be repayable under certain conditions if the Program Agreement is terminated, and a right to receive future payments related to the performance of the credit program under an economic profit sharing agreement. The Program Agreement contains customary representations, warranties and covenants.
Additionally, Signet and Genesis Financial Solutions (“Genesis”) entered into a five-year servicing agreement in October 2017, under which Genesis will provide credit servicing functions for Signet’s existing non-prime accounts receivable, as well as future non-prime account originations. Signet will retain the existing non-prime accounts receivable on its balance sheet and continue to originate the majority of new accounts until the expected completion of the second phase of credit outsourcing.
Accounts receivable, net
In October 2017, the Company completed the sale of a portion of the Sterling Jewelers customer in-house finance receivables. The receivables sold, which were classified as "held for sale" as of the second quarter of Fiscal 2018, are no longer reported within the condensed consolidated balance sheets. See Note 3 for additional information regarding the sale of the prime portion of the customer in-house finance receivable portfolio. 
Signet’s accounts receivable primarily consist of US customer in-house financing receivables. The accounts receivable portfolio consists of a population that is of similar characteristics and is evaluated collectively for impairment.
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Accounts receivable by portfolio segment, net:
 
 
 
 
 
Sterling Jewelers customer in-house finance receivables
$
597.7

 
$
1,813.3

 
$
1,546.3

Zale customer in-house finance receivables
32.3

 
33.4

 
26.4

Other accounts receivable
10.1

 
11.3

 
8.4

Total accounts receivable, net
$
640.1

 
$
1,858.0

 
$
1,581.1


Signet grants credit to customers based on a variety of credit quality indicators, including consumer financial information and prior payment experience. On an ongoing basis, management monitors the credit exposure based on past due status and collection experience, as it has found a meaningful correlation between the past due status of customers and the risk of loss.
During the third quarter of Fiscal 2016, Signet implemented a program to provide in-house credit to customers in the Zale division’s US locations. The allowance for credit losses associated with Zale customer in-house finance receivables was immaterial as of October 28, 2017, January 28, 2017 and October 29, 2016. Effective October 20, 2017, the Zale customer in-house financing programs are being underwritten and serviced by a third party for newly originated balances after the effective date.
Other accounts receivable is comprised primarily of accounts receivable relating to the insurance loss replacement business in the UK Jewelry division of $6.7 million (January 28, 2017 and October 29, 2016: $11.0 million and $7.7 million, respectively).
The allowance for credit losses associated with the portion of Sterling Jewelers customer in-house finance receivables previously classified as “held for sale” was reversed during the second quarter of Fiscal 2018. The activity in the allowance for credit losses on Sterling Jewelers customer in-house finance receivables is shown below:
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
Beginning balance
$
(138.7
)
 
$
(130.0
)
Charge-offs, net
160.9

 
143.1

Recoveries
30.1

 
26.8

Provision
(181.8
)
 
(172.9
)
Reversal of allowance on receivables previously held for sale
20.7

 

Ending balance
$
(108.8
)
 
$
(133.0
)
Ending receivable balance evaluated for impairment
706.5

 
1,679.3

Sterling Jewelers customer in-house finance receivables, net
$
597.7

 
$
1,546.3


Net bad debt expense is defined as the provision expense less recoveries.
The credit quality indicator and age analysis of Sterling Jewelers customer in-house finance receivables are shown below:
   
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
Performing:
 
 
 
 
 
 
 
 
 
 
 
Current, aged 0 – 30 days
$
586.5

 
$
(50.3
)
 
$
1,538.2

 
$
(47.2
)
 
$
1,294.9

 
$
(39.3
)
Past due, aged 31 – 60 days
40.3

 
(3.5
)
 
282.0

 
(9.0
)
 
250.6

 
(8.1
)
Past due, aged 61 – 90 days
27.1

 
(2.4
)
 
51.6

 
(2.3
)
 
50.7

 
(2.5
)
Non Performing:
 
 
 
 
 
 
 
 
 
 
 
Past due, aged more than 90 days
52.6

 
(52.6
)
 
80.2

 
(80.2
)
 
83.1

 
(83.1
)
 
$
706.5

 
$
(108.8
)
 
$
1,952.0

 
$
(138.7
)
 
$
1,679.3

 
$
(133.0
)
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(as a % of the ending receivable balance)
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
Performing
 
 
 
 
 
 
 
 
 
 
 
Current, aged 0 – 30 days
83.0
%
 
8.6
%
 
78.8
%
 
3.1
%
 
77.2
%
 
3.0
%
Past due, aged 31 – 60 days
5.7
%
 
8.7
%
 
14.5
%
 
3.2
%
 
14.9
%
 
3.2
%
Past due, aged 61 – 90 days
3.8
%
 
8.9
%
 
2.6
%
 
4.5
%
 
3.0
%
 
4.9
%
Non Performing
 
 
 
 
 
 
 
 
 
 
 
Past due, aged more than 90 days
7.5
%
 
100.0
%
 
4.1
%
 
100.0
%
 
4.9
%
 
100.0
%
 
100.0
%
 
15.4
%
 
100.0
%
 
7.1
%
 
100.0
%
 
7.9
%

Securitized credit card receivables
The Sterling Jewelers division previously securitized its credit card receivables through its Sterling Jewelers Receivables Master Note Trust. As a condition of closing the credit transaction, the Company terminated the asset-backed securitization facility to transfer the receivables free and clear. See Note 17 for additional information regarding the asset-backed securitization facility.
Inventories
Inventories
Inventories
The following table summarizes the Company’s inventory by classification:
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Raw materials
$
68.2

 
$
60.8

 
$
71.2

Finished goods
2,397.9

 
2,388.5

 
2,578.2

Total inventories
$
2,466.1

 
$
2,449.3

 
$
2,649.4

Goodwill and intangibles
Goodwill and intangibles
Goodwill and intangibles
In connection with the acquisition of R2Net on September 12, 2017, the Company recognized $348.5 million of goodwill, which is reported in the Sterling Jewelers segment. The amount of goodwill generated will be adjusted for any additional assets or liabilities identified by the Company or for any adjustments to the preliminary fair values identified for the assets acquired and liabilities assumed in the R2Net acquisition.
Goodwill
The following table summarizes the Company’s goodwill by reportable segment:
(in millions)
Sterling
Jewelers
 
Zale
Jewelry
 
Piercing
Pagoda
 
UK Jewelry
 
Other
 
Total
Balance at January 30, 2016
$
23.2

 
$
488.7

 
$

 
$

 
$
3.6

 
$
515.5

Impact of foreign exchange

 
2.1

 

 

 

 
2.1

Balance at January 28, 2017
23.2

 
490.8

 

 

 
3.6

 
517.6

Acquisitions
348.5

 

 

 

 

 
348.5

Impact of foreign exchange

 
1.0

 

 

 

 
1.0

Balance at October 28, 2017
$
371.7

 
$
491.8

 
$

 
$

 
$
3.6

 
$
867.1


There have been no goodwill impairment losses recognized during the fiscal periods presented in the condensed consolidated income statements.
Intangibles
The following table provides detail regarding the composition of intangible assets and liabilities:
 
 
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Balance sheet location
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net
carrying
amount
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net
carrying
amount
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net
carrying
amount
Definite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade names
Intangible assets, net
 
$
1.5

 
$
(1.0
)
 
$
0.5

 
$
1.4

 
$
(0.8
)
 
$
0.6

 
$
1.4

 
$
(0.7
)
 
$
0.7

Favorable leases
Intangible assets, net
 
47.9

 
(44.1
)
 
3.8

 
47.6

 
(36.0
)
 
11.6

 
47.5

 
(32.6
)
 
14.9

Total definite-lived intangible assets
 
49.4

 
(45.1
)
 
4.3

 
49.0

 
(36.8
)
 
12.2

 
48.9

 
(33.3
)
 
15.6

Indefinite-lived trade names
Intangible assets, net
 
406.1

 

 
406.1

 
404.8

 

 
404.8

 
404.2

 

 
404.2

Total intangible assets, net
 
$
455.5

 
$
(45.1
)
 
$
410.4

 
$
453.8

 
$
(36.8
)
 
$
417.0

 
$
453.1

 
$
(33.3
)
 
$
419.8

Definite-lived intangible liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unfavorable leases
Other liabilities
 
$
(48.5
)
 
$
45.4

 
$
(3.1
)
 
$
(48.3
)
 
$
38.2

 
$
(10.1
)
 
$
(48.1
)
 
$
34.7

 
$
(13.4
)
Unfavorable contracts
Other liabilities
 
(65.6
)
 
37.6

 
(28.0
)
 
(65.6
)
 
33.5

 
(32.1
)
 
(65.6
)
 
32.1

 
(33.5
)
Total intangible liabilities, net
 
$
(114.1
)
 
$
83.0

 
$
(31.1
)
 
$
(113.9
)
 
$
71.7

 
$
(42.2
)
 
$
(113.7
)
 
$
66.8

 
$
(46.9
)

During the second quarter of Fiscal 2018, the Company performed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names identified in the Zale acquisition, for impairment indicators. Impairment indicators identified included weakness in the overall retail environment, declines in same store sales, as well a general decline in the market valuation of the Company’s common shares. At this time, the estimated fair value of the reporting units and indefinite-lived trade names continues to exceed the carrying values. However, the Company will continue to monitor sales trends, interest rates, and other key inputs to the estimates of fair value. A further decline in the key inputs, especially sales trends used in the valuation of trade names, may result in an impairment charge.
Other assets
Other assets
Other assets
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Deferred ESP selling costs
$
86.0

 
$
86.1

 
$
81.8

Investments(1)
28.7

 
27.2

 
27.5

Other assets
54.4

 
51.8

 
48.2

Total other assets
$
169.1

 
$
165.1

 
$
157.5


(1)     All investments are classified as available-for-sale and reported at fair value.  
In addition, other current assets include deferred direct selling costs in relation to the sale of extended service plans and lifetime warranty agreements (“ESP”) of $29.3 million as of October 28, 2017 (January 28, 2017 and October 29, 2016: $29.4 million and $27.6 million, respectively).
Derivatives
Derivatives
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 UK Jewelry purchases and purchases made by the Canadian operations of the Zale division 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.
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 income statement 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 minimize 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 options, net zero-cost collar arrangements (a combination of call and put option contracts), forward contracts and commodity purchasing, while fluctuations in the cost of diamonds are not hedged.
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 main external sources of funding are a senior unsecured credit facility and senior unsecured notes as described in Note 17.
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 is scheduled to mature through April 2019. Under this contract, the Company agrees 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. The Company has effectively converted a portion of its variable-rate senior unsecured term loan into fixed-rate debt.
The fair value of the swap is presented within the condensed consolidated balance sheets, and the Company recognizes any changes in the fair value as an adjustment of AOCI within equity to the extent the swap is effective. The ineffective portion, if any, is recognized in current period earnings. As interest expense is accrued on the debt obligation, amounts in AOCI related to the interest rate swap are reclassified into income resulting in a net interest expense on the hedged amount of the underlying debt obligation equal to the effective yield of the fixed rate of the swap. In the event that the interest rate swap is dedesignated prior to maturity, gains or losses in AOCI remain deferred and are reclassified into earnings in the periods in which the hedged forecasted transaction affects earnings.
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, except for customer in-house financing receivables as disclosed in Note 11 of which no single customer represents a significant portion of the Company’s receivable balance. 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. 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. The total notional amount of these foreign currency contracts outstanding as of October 28, 2017 was $38.4 million (January 28, 2017 and October 29, 2016: $37.8 million and $27.8 million, respectively). These contracts have been designated as cash flow hedges and will be settled over the next 11 months (January 28, 2017 and October 29, 2016: 12 months and 15 months, 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 28, 2017 was $48.1 million (January 28, 2017 and October 29, 2016: $117.8 million and $53.2 million, respectively).
Commodity forward purchase contracts and net zero-cost 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 material. The total notional amount of these commodity derivative contracts outstanding as of October 28, 2017 was 19,000 ounces of gold (January 28, 2017 and October 29, 2016: 94,000 ounces and 57,000 ounces, respectively). These contracts have been designated as cash flow hedges and will be settled over the next 9 months (January 28, 2017 and October 29, 2016: 12 months and 15 months, respectively).
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 28, 2017, 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
(in millions)
Balance sheet location
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Foreign currency contracts
Other current assets
 
$
0.2

 
$
1.4

 
$
3.5

Commodity contracts
Other current assets
 
0.7

 

 
0.6

Interest rate swaps
Other assets
 
1.3

 
0.4

 

 
 
 
$
2.2

 
$
1.8

 
$
4.1

 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign currency contracts
Other current assets
 

 
1.8

 

Total derivative assets
 
 
$
2.2

 
$
3.6

 
$
4.1

 
Fair value of derivative liabilities
(in millions)
Balance sheet location
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Foreign currency contracts
Other current liabilities
 
$
(0.7
)
 
$
(0.2
)
 
$

Commodity contracts
Other current liabilities
 

 
(3.4
)
 
(0.7
)
Interest rate swaps
Other liabilities
 

 

 
(2.3
)
 
 
 
$
(0.7
)
 
$
(3.6
)
 
$
(3.0
)
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign currency contracts
Other current liabilities
 
(0.6
)
 

 
(0.1
)
Total derivative liabilities
 
 
$
(1.3
)
 
$
(3.6
)
 
$
(3.1
)

Derivatives designated as cash flow hedges
The following table summarizes the pre-tax gains recorded in AOCI for derivatives designated in cash flow hedging relationships:
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Foreign currency contracts
$

 
$
4.1

 
$
6.4

Commodity contracts
1.5

 
(2.1
)
 
3.8

Interest rate swaps
1.3

 
0.4

 
(2.3
)
Gains recorded in AOCI
$
2.8

 
$
2.4

 
$
7.9

The following tables summarize the effect of derivative instruments designated as cash flow hedges in OCI and the condensed consolidated income statements:
Foreign currency contracts
 
 
 
13 weeks ended
 
39 weeks ended
(in millions)
Income statement caption
 
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Gains recorded in AOCI, beginning of period
 
 
$
0.6

 
$
3.8

 
$
4.1

 
$
1.4

Current period (losses) gains recognized in OCI
 
 
0.2

 
3.0

 
(1.1
)
 
6.0

Gains reclassified from AOCI to net income
Cost of sales
 
(0.8
)
 
(0.4
)
 
(3.0
)
 
(1.0
)
Gains recorded in AOCI, end of period
 
 
$

 
$
6.4

 
$

 
$
6.4

Commodity contracts
 
 
 
13 weeks ended
 
39 weeks ended
(in millions)
Income statement caption
 
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Gains (losses) recorded in AOCI, beginning of period
 
 
$
1.0

 
$
6.2

 
$
(2.1
)
 
$
(3.7
)
Current period (losses) gains recognized in OCI
 
 
0.5

 
(2.1
)
 
5.1

 
5.8

(Gains) losses reclassified from AOCI to net income
Cost of sales
 

 
(0.3
)
 
(1.5
)
 
1.7

Gains recorded in AOCI, end of period
 
 
$
1.5

 
$
3.8

 
$
1.5

 
$
3.8


Interest rate swaps
 
 
 
13 weeks ended
 
39 weeks ended
(in millions)
Income statement caption
 
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Gains (losses) recorded in AOCI, beginning of period
 
 
$
0.7

 
$
(3.8
)
 
$
0.4

 
$
(3.4
)
Current period gains (losses) recognized in OCI
 
 
0.6

 
1.0

 
0.5

 
(0.6
)
Losses reclassified from AOCI to net income
Interest expense, net
 

 
0.5

 
0.4

 
1.7

Gains (losses) recorded in AOCI, end of period
 
 
$
1.3

 
$
(2.3
)
 
$
1.3

 
$
(2.3
)

There was no material ineffectiveness related to the Company’s derivative instruments designated in cash flow hedging relationships for the 13 and 39 weeks ended October 28, 2017 and October 29, 2016. Based on current valuations, the Company expects approximately $2.0 million of net pre-tax derivative gains to be reclassified out of AOCI into earnings within the next 12 months.
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 income statements:
 
 
 
13 weeks ended
 
39 weeks ended
(in millions)
Income statement caption
 
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
Foreign currency contracts
Other operating income, net
 
$
(0.1
)
 
$
1.6

 
$
3.1

 
$
3.2

Fair value measurements
Fair value measurements
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
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 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Carrying Value
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Carrying Value
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Carrying Value
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
Assets:
 
 
 
 
 
 
 
 
 
US Treasury securities
$
7.7

 
$
7.7

 
$

 
$
8.1

 
$
8.1

 
$

 
$
8.3

 
$
8.3

 
$

Corporate equity securities
4.1

 
4.1

 

 
3.8

 
3.8

 

 
3.6

 
3.6

 

Foreign currency contracts
0.2

 

 
0.2

 
3.2

 

 
3.2

 
3.5

 

 
3.5

Commodity contracts
0.7

 

 
0.7

 

 

 

 
0.6

 

 
0.6

Interest rate swaps
1.3

 
 
 
1.3

 
0.4

 

 
0.4

 

 

 

US government agency securities
5.4

 

 
5.4

 
4.4

 

 
4.4

 
4.5

 

 
4.5

Corporate bonds and notes
11.5

 

 
11.5

 
10.9

 

 
10.9

 
11.1

 

 
11.1

Total assets
$
30.9

 
$
11.8

 
$
19.1

 
$
30.8

 
$
11.9

 
$
18.9

 
$
31.6

 
$
11.9

 
$
19.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency contracts
$
(1.3
)
 
$

 
$
(1.3
)
 
$
(0.2
)
 
$

 
$
(0.2
)
 
$
(0.1
)
 
$

 
$
(0.1
)
Commodity contracts

 

 

 
(3.4
)
 

 
(3.4
)
 
(0.7
)
 

 
(0.7
)
Interest rate swaps

 

 

 

 

 

 
(2.3
)
 

 
(2.3
)
Total liabilities
$
(1.3
)
 
$

 
$
(1.3
)
 
$
(3.6
)
 
$

 
$
(3.6
)
 
$
(3.1
)
 
$

 
$
(3.1
)

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 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 15 for additional information related to the Company’s derivatives.
The carrying amounts of cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued expenses, other liabilities, income taxes and the revolving credit facility approximate fair value because of the short-term maturity of these amounts.
The fair values of long-term debt instruments 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. See Note 17 for classification between current and long-term debt. The carrying amount and fair value of outstanding debt at October 28, 2017, January 28, 2017 and October 29, 2016 were as follows:
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Carrying
Value
 
Fair Value
 
Carrying
Value
 
Fair Value
 
Carrying
Value
 
Fair Value
Long-term debt:
 
 
 
 
 
 
 
 
 
 
 
Senior notes (Level 2)
$
394.3

 
$
398.8

 
$
393.7

 
$
391.2

 
$
393.4

 
$
390.5

Securitization facility (Level 2)

 

 
599.7

 
600.0

 
599.6

 
600.0

Term loan (Level 2)
330.0

 
332.9

 
345.1

 
348.6

 
349.3

 
353.0

Total
$
724.3

 
$
731.7

 
$
1,338.5

 
$
1,339.8

 
$
1,342.3

 
$
1,343.5

Loans, overdrafts and long-term debt
Loans, overdrafts and long-term debt
Loans, overdrafts and long-term debt
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Debt:
 
 
 
 
 
Senior unsecured notes due 2024, net of unamortized discount
$
398.9

 
$
398.8

 
$
398.7

Securitization facility

 
600.0

 
600.0

Senior unsecured term loan
332.9

 
348.6

 
353.0

Revolving credit facility
256.0

 
56.0

 
259.0

Bank overdrafts
8.3

 
14.2

 
11.1

Total debt
$
996.1

 
$
1,417.6

 
$
1,621.8

Less: Current portion of loans and overdrafts
(291.8
)
 
(91.1
)
 
(288.8
)
Less: Unamortized capitalized debt issuance fees
(7.5
)
 
(8.6
)
 
(8.8
)
Total long-term debt
$
696.8

 
$
1,317.9

 
$
1,324.2


Revolving credit facility and term loan (the Credit Facility)
The Company’s Credit Facility contains a $700 million senior unsecured multi-currency multi-year revolving credit facility and a $357.5 million senior unsecured term loan facility. The maturity date for the Credit Facility, including both individual facilities disclosed above, is July 2021.
Capitalized fees associated with the revolving credit facility as of October 28, 2017 total $2.6 million with the unamortized balance recorded as an asset within the condensed consolidated balance sheets. Accumulated amortization related to these capitalized fees as of October 28, 2017 was $1.1 million (January 28, 2017 and October 29, 2016: $0.8 million and $0.7 million, respectively). Amortization relating to these fees of $0.1 million and $0.3 million was recorded as interest expense in the condensed consolidated income statements for the 13 and 39 weeks ended October 28, 2017, respectively ($0.1 million and $0.3 million for the 13 and 39 weeks ended October 29, 2016, respectively). As of October 28, 2017, January 28, 2017 and October 29, 2016, the Company had stand-by letters of credit outstanding of $15.7 million, $15.3 million and $14.8 million, respectively, that reduce remaining borrowing availability. The revolving credit facility had a weighted average interest rate of 2.45% and 1.68% during the 39 weeks ended October 28, 2017 and October 29, 2016, respectively.
Capitalized fees associated with the term loan facility as of October 28, 2017 total $6.2 million with the unamortized balance recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Accumulated amortization related to these capitalized fees as of October 28, 2017 was $3.3 million (January 28, 2017 and October 29, 2016: $2.7 million and $2.5 million, respectively). Amortization relating to these fees of $0.2 million and $0.6 million was recorded as interest expense in the condensed consolidated income statements for the 13 and 39 weeks ended October 28, 2017, respectively ($0.2 million and $0.7 million for the 13 and 39 weeks ended October 29, 2016, respectively). Excluding the impact of the interest rate swap designated as a cash flow hedge discussed in Note 15, the term loan had a weighted average interest rate of 2.34% and 1.74% during the 39 weeks ended October 28, 2017 and October 29, 2016, respectively.
Senior unsecured notes due 2024
Signet UK Finance plc (“Signet UK Finance”), a wholly owned subsidiary of the Company, issued $400 million aggregate principal amount of its 4.700% senior unsecured notes due in 2024 (the “Notes”). The Notes were issued under an effective registration statement previously filed with the SEC. The 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 Note 23 for additional information.
Capitalized fees relating to the senior unsecured notes total $7.0 million. Accumulated amortization related to these capitalized fees as of October 28, 2017 was $2.4 million (January 28, 2017 and October 29, 2016: $1.9 million and $1.7 million, respectively). The remaining unamortized capitalized fees are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to these fees of $0.2 million and $0.5 million was recorded as interest expense in the condensed consolidated income statements for the 13 and 39 weeks ended October 28, 2017, respectively ($0.2 million and $0.5 million for the 13 and 39 weeks ended October 29, 2016, respectively).
Asset-backed securitization facility
The Company sold an undivided interest in certain credit card receivables to Sterling Jewelers Receivables Master Note Trust (the “Issuer”) and issued two-year revolving asset-backed variable funding notes. As a condition of closing the credit transaction disclosed in Note 3, during the third quarter of Fiscal 2018, the Company terminated the asset-backed securitization facility, which had a principal balance outstanding of $600.0 million, in order to transfer the receivables free and clear. Unamortized capitalized fees of $0.2 million associated with the asset-backed securitization facility were written-off during the third quarter of Fiscal 2018. Capitalized fees previously totaled $3.4 million, offset by accumulated amortization of $3.4 million as of October 28, 2017 (January 28, 2017 and October 29, 2016: $3.1 million and $3.0 million, respectively). Amortization relating to these fees of $0.2 million and $0.3 million was recorded as interest expense in the condensed consolidated income statements for the 13 and 39 weeks ended October 28, 2017 ($0.1 million and $0.6 million for the 13 and 39 weeks ended October 29, 2016, respectively). The asset-backed securitization facility had a weighted average interest rate of 2.50% and 1.98% during the 39 weeks ended October 28, 2017 and October 29, 2016, respectively.
Unsecured term loan (the “Bridge Loan”)
In conjunction with the acquisition of R2Net, Signet entered into a $350 million unsecured term loan to finance the transaction. The Company executed and repaid the Bridge Loan during the 13 weeks ended October 28, 2017. The Bridge Loan contained customary fees in addition to interest incurred on borrowings. Fees incurred of $1.4 million and interest of $0.9 million relating to the Bridge Loan were expensed during the 13 and 39 weeks ended October 28, 2017.
Other
As of October 28, 2017, January 28, 2017 and October 29, 2016, the Company was in compliance with all debt covenants.
Deferred revenue
Deferred revenue
Deferred revenue
Deferred revenue is comprised primarily of ESP and voucher promotions and other as follows:
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Sterling Jewelers ESP deferred revenue
$
717.6

 
$
737.4

 
$
710.2

Zale ESP deferred revenue
165.2

 
168.2

 
155.2

Voucher promotions and other
33.6

 
30.3

 
23.4

Total deferred revenue
$
916.4

 
$
935.9

 
$
888.8

 
 
 
 
 
 
Disclosed as:
 
 
 
 
 
Current liabilities
$
270.3

 
$
276.9

 
$
256.7

Non-current liabilities
646.1

 
659.0

 
632.1

Total deferred revenue
$
916.4

 
$
935.9

 
$
888.8

ESP deferred revenue
 
13 weeks ended
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Sterling Jewelers ESP deferred revenue, beginning of period
$
732.7

 
$
720.3

 
$
737.4

 
$
715.1

Plans sold
47.9

 
52.8

 
176.7

 
190.4

Revenue recognized
(63.0
)
 
(62.9
)
 
(196.5
)
 
(195.3
)
Sterling Jewelers ESP deferred revenue, end of period
$
717.6

 
$
710.2

 
$
717.6

 
$
710.2

 
13 weeks ended
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Zale ESP deferred revenue, beginning of period
$
169.5

 
$
156.2

 
$
168.2

 
$
146.1

Plans sold(1)
25.0

 
28.3

 
89.6

 
100.8

Revenue recognized
(29.3
)
 
(29.3
)
 
(92.6
)
 
(91.7
)
Zale ESP deferred revenue, end of period
$
165.2

 
$
155.2

 
$
165.2

 
$
155.2


(1) 
Includes impact of foreign exchange translation.
Warranty reserve
Warranty reserve
Warranty reserve
Sterling Jewelers and Zale Jewelry segments provide a product lifetime diamond 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. Sterling Jewelers also provides a similar product lifetime guarantee on color gemstones. 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
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Warranty reserve, beginning of period
$
39.3

 
$
40.4

 
$
40.0

 
$
41.9

Warranty expense
3.1

 
3.7

 
7.9

 
9.4

Utilized(1)
(3.1
)
 
(3.6
)
 
(8.6
)
 
(10.8
)
Warranty reserve, end of period
$
39.3

 
$
40.5

 
$
39.3

 
$
40.5


(1)  
Includes impact of foreign exchange translation.
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Disclosed as:
 
 
 
 
 
Current liabilities
$
12.2

 
$
13.0

 
$
12.9

Non-current liabilities
27.1

 
27.0

 
27.6

Total warranty reserve
$
39.3

 
$
40.0

 
$
40.5

Share-based compensation
Share-based compensation
Share-based compensation
Signet recorded share-based compensation expense of $4.3 million and $11.0 million for the 13 and 39 weeks ended October 28, 2017, respectively, related to the Omnibus Plan and Share Saving Plans (13 and 39 weeks ended October 29, 2016: $5.2 million and $14.0 million).
Commitments and contingencies
Commitments and contingencies
Commitments and contingencies
Legal proceedings
Employment practices
As previously reported, 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. A hearing on the class certification motion was held in late February 2014. 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. SJI filed its opposition to Claimants’ Motion for Reconsideration on March 4, 2015. Claimants’ reply was filed on March 16, 2015. Claimants’ Motion was denied in an order issued April 27, 2015. 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. Claimants’ opposition was filed on March 23, 2015 and SJI’s reply was filed on April 3, 2015. SJI’s motion was heard on May 4, 2015. 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 November 25, 2015, SJI filed a Motion to Stay the AAA Proceedings while SJI appeals 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. Claimants filed their opposition on December 2, 2015. On December 3, 2015, SJI filed with the United States Court of Appeals for the Second Circuit SJI’s Notice of Appeal of the Southern District’s November 16, 2015 Opinion and Order. 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 Intentional Discrimination Claims. SJI filed its opposition on May 12, 2015. Claimants’ reply was filed on May 22, 2015. Claimants’ motion was granted on June 15, 2015. Claimants filed Claimants’ Motion for Conditional Certification of Claimants’ Equal Pay Act Claims and Authorization of Notice on March 6, 2015. SJI’s opposition was filed on May 1, 2015. Claimants filed their reply on June 5, 2015. 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 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. Claimants filed their opposition on April 4, 2016. The arbitrator denied SJI’s Motion on April 5, 2016. 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. Claimants filed their opposition brief on April 11, 2016, SJI filed its reply on April 20, 2016, and oral argument was heard on SJI’s Motion on May 11, 2016. 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. SJI’s brief was filed September 13, 2016, and Claimants’ brief was filed on December 13, 2016, SJI filed its reply brief on January 10, 2017, and oral argument was heard on May 9, 2017. 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. Claimants’ opposition was filed on June 3, 2016. 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 argument was heard on October 16, 2017. The parties await a ruling. On November 9, 2017, Claimants filed in the arbitration disclosures identifying witnesses, exhibits and deposition designations to be used at trial. SJI’s disclosures are due December 7, 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. Claimants’ opposition briefs to these motions are due for filing on December 8, 2017. We anticipate trial in the arbitration to begin the week of April 16, 2018, or as soon thereafter as the Arbitrator’s schedule permits.
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.
Also, as previously reported, on September 23, 2008, the US Equal Employment Opportunity Commission (“EEOC”) filed a lawsuit against SJI in the US District Court for the Western District of New York. This suit was settled on May 5, 2017, as further described below. The EEOC’s lawsuit alleged that SJI engaged in intentional and disparate impact gender discrimination with respect to pay and promotions of female retail store employees from January 1, 2003 to the present. The EEOC asserted claims for unspecified monetary relief and non-monetary relief against the Company on behalf of a class of female employees subjected to these alleged practices. Non-expert fact discovery closed in mid-May 2013. In September 2013, SJI made a motion for partial summary judgment on procedural grounds, which was referred to a Magistrate Judge. The Magistrate Judge heard oral arguments on the summary judgment motion in December 2013. On January 2, 2014, the Magistrate Judge issued his Report, Recommendation and Order, recommending that the Court grant SJI’s motion for partial summary judgment and dismiss the EEOC’s claims in their entirety. The EEOC filed its objections to the Magistrate Judge’s ruling and SJI filed its response thereto. The District Court Judge heard oral arguments on the EEOC’s objections to the Magistrate Judge’s ruling on March 7, 2014 and on March 11, 2014 entered an order dismissing the action with prejudice. On May 12, 2014, the EEOC filed its Notice of Appeal of the District Court Judge’s dismissal of the action to United States Court of Appeals for the Second Circuit. The parties fully briefed the appeal and oral argument occurred on May 5, 2015. On September 9, 2015, the United States Court of Appeals for the Second Circuit issued a decision vacating the District Court’s order and remanding the case back to the District Court for further proceedings. SJI filed a Petition for Panel Rehearing and En Banc Review with the United States Court of Appeals for the Second Circuit, which was denied on December 1, 2015. On December 4, 2015, SJI filed in the United States Court of Appeals for the Second Circuit a Motion Of Appellee Sterling Jewelers Inc. For Stay Of Mandate Pending Petition For Writ Of Certiorari. The Motion was granted by the Second Circuit on December 10, 2015. SJI filed a Petition For Writ Of Certiorari in the Supreme Court of the United States on April 29, 2016, which was denied. The case was remanded to the Western District of New York and on November 2, 2016, the Court issued a case scheduling order. On January 25, 2017, the parties filed a joint motion to extend case scheduling order deadlines. The motion was granted on January 27, 2017. 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 is three years and three months, expiring on August 4, 2020.
Prior to the Acquisition, Zale Corporation was a defendant in three class action lawsuits: Tessa Hodge v. Zale Delaware, Inc., d/b/a Piercing Pagoda which was filed on April 23, 2013 in the Superior Court of the State of California, County of San Bernardino; Naomi Tapia v. Zale Corporation which was filed on July 3, 2013 in the US District Court, Southern District of California; and Melissa Roberts v. Zale Delaware, Inc. which was filed on October 7, 2013 in the Superior Court of the State of California, County of Los Angeles. All three cases include allegations that Zale Corporation violated various wage and hour labor laws. Relief was sought on behalf of current and former Piercing Pagoda and Zale Corporation’s employees. The lawsuits sought to recover damages, penalties and attorneys’ fees as a result of the alleged violations. Without admitting or conceding any liability, the Company reached an agreement to settle the Hodge and Roberts matters for an immaterial amount. Final approval of the settlement was granted on March 9, 2015 and the settlement was implemented. On December 28, 2016, the Company participated in a mediation of the Tapia class action. The mediation resulted in a settlement agreement. The settlement resolved various California wage and hour claims involving all current and former employees of Zale Delaware Inc. d/b/a Zale Corporation who were designated as nonexempt and worked in California at any time from July 3, 2010 to present. The Court granted final approval of the settlement on July 14, 2017. In August 2017, the settlement was funded and the settlement funds were disbursed.
On May 13, 2017, the Company received notice that a Class Action Complaint against Sterling Jewelers Inc. and Signet Jewelers Ltd. was filed by Veronica Masten in the Superior Court of California, County of Los Angeles, alleging violations of various wage and hour labor laws. In Masten, Plaintiff seeks to certify two separate classes comprising all current and former hourly-paid employees employed by in jewelry stores in California, and all current and former California employees that received a wage statement “during the applicable liability period.” The Company was served with the Class Acton Complaint on May 16, 2017. The Company filed its Answer to the Complaint on June 13, 2017. On June 14, 2017, the Company removed this matter to the United States District Court for the Central District of California. A joint scheduling conference was held on September 18, 2017, during which the Court scheduled pretrial dates and trial for May 2019. The parties are currently engaged in discovery.
SJI denies the allegations of the Plaintiff and will defend the case vigorously. At this point, no outcome or possible loss or range of losses, if any, arising from the litigation can be estimated.
Shareholder Action
In August 2016, two 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”). On September 16, 2016, the Court consolidated the S.D.N.Y. cases under case number 16-cv-6728. On April 3, 2017, the plaintiffs filed a second amended complaint, purportedly on behalf of persons that acquired the Company’s securities on or between August 29, 2013, and February 27, 2017, naming as defendants the Company, its then-current and former Chief Executive Officers, and its current and former Chief Financial Officers. The second amended complaint alleges 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 (i) failing to disclose that the Company was allegedly having issues ensuring the safety of customers’ jewelry while in the Company’s custody for repairs, which allegedly damaged customer confidence; (ii) making misleading statements about the Company’s credit portfolio; and (iii) failing to disclose reports of sexual harassment allegations that were raised by claimants in an ongoing pay and promotion gender discrimination class arbitration (the “Arbitration”). The second amended complaint alleged that the Company’s share price was artificially inflated as a result of the alleged misrepresentations and sought unspecified compensatory damages and costs and expenses, including attorneys’ and experts’ fees.
In March 2017, two other alleged Company shareholders each filed a putative class action complaint in the United States District Court for the Northern District of Texas against the Company and its then-current and former Chief Executive Officers (Nos. 17-cv-875 and 17-cv-923, the “N.D. Tex. cases”). Those complaints were nearly identical to each other and alleged that the defendants’ statements concerning the Arbitration violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The N.D. Tex. cases were subsequently transferred to the Southern District of New York and consolidated with the S.D.N.Y. cases. On July 27, 2017, the Court appointed a lead plaintiff and lead plaintiff’s counsel in the consolidated action. On August 3, 2017, the Court ordered the lead plaintiff to file a third amended complaint by September 29, 2017. The defendants must answer or otherwise respond to the third amended complaint by December 1, 2017.
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 purports to have been brought by Ms. Aungst on behalf of the Company, names certain current and former directors and officers of the Company as defendants and alleges claims for breach of fiduciary duty, abuse of control, and gross mismanagement.  The complaint challenges 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 complaint seeks money damages on behalf of the Company, changes to the Company’s corporate governance, and other equitable relief, as well as plaintiff’s legal fees and costs. The Company and Defendants moved to dismiss the complaint on October 30, 2017.
The Company believes that the claims brought in these shareholder actions are without merit and cannot estimate a range of potential liability, if any, at this time.
Regulatory Matters
On September 6, 2017, the Consumer Financial Protection Bureau (“CFPB”) notified Signet that, in accordance with the CFPB’s discretionary Notice and Opportunity to Respond and Advise (“NORA”) process, the CFPB’s Office of Enforcement is considering recommending that the CFPB take legal action against Signet, alleging that Signet violated §§ 1031 and 1036 of the Consumer Financial Protection Act of 2010, 12 U.S.C. §§ 5531, 5536, and the Truth in Lending Act, 15 U.S.C. § 1601 et seq., and its implementing regulation, relating to in-store: credit practices, promotions, and payment protection products. The purpose of a NORA letter is to provide a party being investigated an opportunity to present its position to the CFPB before an enforcement action is recommended or commenced. This notice stems from an inquiry that commenced in late 2016 when Signet received and responded to an initial Civil Investigative Demand. Signet has cooperated and continues to fully cooperate with the CFPB. On September 27, 2017, Signet submitted a response to the NORA letter to the CFPB, which stated its belief that the potential claims lack merit.
The Attorney General for the State of New York (“NYAG”) is investigating similar issues under its jurisdiction. Signet has been cooperating with the NYAG’s investigation which remains ongoing.
Signet continues to believe that its acts and practices relating to the matters under investigation are lawful. Signet is currently unable to predict the timing or outcome of the NORA process or NYAG investigation and no possible loss or range of losses, if any, arising from the investigations is able to be estimated.
In the ordinary course of business, Signet may be subject, from time to time, to various other proceedings, lawsuits, disputes or claims incidental to its business, which the Company believes are not significant to Signet’s consolidated financial position, results of operations or cash flows.
Pension plans
Pension plans
Pension plans
Signet operates a defined benefit pension plan in the UK (the “UK Plan”) for participating eligible employees. The UK Plan, which ceased to admit new employees from April 2004, is a funded plan with assets held in a separate trustee administered fund, which is independently managed.
In September 2017, the Company approved an amendment to freeze benefit accruals under the UK Plan in an effort to reduce anticipated future pension expense. As a result of this amendment, the Company will freeze the pension plan for all participants with an effective date of either December 2017 or October 2019 as elected by the plan participants. All future benefit accruals under the plan shall cease. The amendment to the plan was accounted for in accordance with FASB Accounting Standards Codification (“ASC”) Topic 715, “Compensation - Retirement Benefits,” resulting in the recognition of a curtailment gain of $6.4 million, offset by a settlement loss of $2.7 million, during the third quarter of Fiscal 2018.
The components of net periodic pension benefit for the UK Plan are as follows:
 
13 weeks ended
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Components of net periodic pension benefit:
 
 
 
 
 
 
 
Service cost
$
(0.6
)
 
$
(0.5
)
 
$
(1.6
)
 
$
(1.5
)
Interest cost
(1.6
)
 
(1.7
)
 
(4.7
)
 
(5.5
)
Expected return on UK Plan assets
2.4

 
2.5

 
7.1

 
8.0

Amortization of unrecognized actuarial losses
(0.7
)
 
(0.4
)
 
(2.2
)
 
(1.2
)
Amortization of unrecognized net prior service credits
0.4

 
0.5

 
1.3

 
1.5

Net periodic pension (expense) benefit
$
(0.1
)
 
$
0.4

 
$
(0.1
)
 
$
1.3

Net curtailment gain and settlement loss
3.7

 

 
3.7

 

Total recognized in net periodic pension benefit and OCI
$
3.6

 
$
0.4

 
$
3.6

 
$
1.3


In the 39 weeks ended October 28, 2017, Signet contributed $2.4 million to the UK Plan and expects to contribute a minimum of $3.3 million at current exchange rates to the UK Plan in Fiscal 2018. The level of contributions is in accordance with an agreed upon deficit recovery plan and based on the results of the actuarial valuation as of April 5, 2015.
Condensed consolidating financial information
Condensed consolidating financial information
Condensed consolidating financial information
The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” We and certain of our subsidiaries have guaranteed the obligations under certain debt securities that have been issued by Signet UK Finance plc. The following presents the condensed consolidating financial information for: (i) the indirect Parent Company (Signet Jewelers Limited); (ii) the Issuer of the guaranteed obligations (Signet UK Finance plc); (iii) the Guarantor subsidiaries, on a combined basis; (iv) the non-guarantor subsidiaries, on a combined basis; (v) consolidating eliminations and (vi) Signet Jewelers Limited and Subsidiaries on a consolidated basis. Each Guarantor subsidiary is 100% owned by the Parent Company at the date of each balance sheet presented. The Guarantor subsidiaries, along with Signet Jewelers Limited, will fully and unconditionally guarantee the obligations of Signet UK Finance plc under any such debt securities. Each entity in the consolidating financial information follows the same accounting policies as described in the condensed consolidated financial statements.
The accompanying condensed consolidating financial information has been presented on the equity method of accounting for all periods presented. Under this method, investments in subsidiaries are recorded at cost and adjusted for the subsidiaries’ cumulative results of operations, capital contributions and distributions and other changes in equity. Elimination entries include consolidating and eliminating entries for investments in subsidiaries, and intra-entity activity and balances.
Condensed Consolidated Income Statement
For the 13 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Sales
$

 
$

 
$
1,067.0

 
$
89.9

 
$

 
$
1,156.9

Cost of sales

 

 
(799.9
)
 
(35.9
)
 

 
(835.8
)
Gross margin

 

 
267.1

 
54.0

 

 
321.1

Selling, general and administrative expenses
(0.6
)
 

 
(346.4
)
 
(28.9
)
 

 
(375.9
)
Credit transaction, net

 

 
(12.2
)
 

 

 
(12.2
)
Other operating income (loss), net

 

 
72.7

 
(0.2
)
 

 
72.5

Operating (loss) income
(0.6
)
 

 
(18.8
)
 
24.9

 

 
5.5

Intra-entity interest income (expense)

 
4.7

 
(47.0
)
 
42.3

 

 

Interest expense, net

 
(5.1
)
 
(7.7
)
 
(3.8
)
 

 
(16.6
)
(Loss) income before income taxes
(0.6
)
 
(0.4
)
 
(73.5
)
 
63.4

 

 
(11.1
)
Income taxes

 
0.1

 
28.3

 
(21.2
)
 

 
7.2

Equity in income of subsidiaries
(3.3
)
 

 
(71.5
)
 
(45.5
)
 
120.3

 

Net (loss) income
$
(3.9
)
 
$
(0.3
)
 
$
(116.7
)
 
$
(3.3
)
 
$
120.3

 
$
(3.9
)
Dividends on redeemable convertible preferred shares
(8.2
)
 

 

 

 

 
(8.2
)
Net (loss) income attributable to common shareholders
$
(12.1
)
 
$
(0.3
)
 
$
(116.7
)
 
$
(3.3
)
 
$
120.3

 
$
(12.1
)



Condensed Consolidated Income Statement
For the 13 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Sales
$

 
$

 
$
1,121.8

 
$
64.4

 
$

 
$
1,186.2

Cost of sales

 

 
(821.7
)
 
(14.5
)
 

 
(836.2
)
Gross margin

 

 
300.1

 
49.9

 

 
350.0

Selling, general and administrative expenses
(0.3
)
 

 
(362.0
)
 
(24.2
)
 

 
(386.5
)
Other operating income (loss), net

 

 
75.6

 
(7.0
)
 

 
68.6

Operating (loss) income
(0.3
)
 

 
13.7

 
18.7

 

 
32.1

Intra-entity interest income (expense)

 
4.7

 
(47.8
)
 
43.1

 

 

Interest expense, net

 
(5.0
)
 
(4.5
)
 
(3.2
)
 

 
(12.7
)
(Loss) income before income taxes
(0.3
)
 
(0.3
)
 
(38.6
)
 
58.6

 

 
19.4

Income taxes

 

 
15.1

 
(17.5
)
 

 
(2.4
)
Equity in income of subsidiaries
17.3

 

 
(51.9
)
 
(23.6
)
 
58.2

 

Net income (loss)
$
17.0

 
$
(0.3
)
 
$
(75.4
)
 
$
17.5

 
$
58.2

 
$
17.0

Dividends on redeemable convertible preferred shares
(2.2
)
 

 

 

 

 
(2.2
)
Net income (loss) attributable to common shareholders
$
14.8

 
$
(0.3
)
 
$
(75.4
)
 
$
17.5

 
$
58.2

 
$
14.8



Condensed Consolidated Income Statement
For the 39 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Sales
$

 
$

 
$
3,714.5

 
$
245.4

 
$

 
$
3,959.9

Cost of sales

 

 
(2,623.1
)
 
(66.6
)
 

 
(2,689.7
)
Gross margin

 

 
1,091.4

 
178.8

 

 
1,270.2

Selling, general and administrative expenses
(1.0
)
 

 
(1,144.9
)
 
(91.8
)
 

 
(1,237.7
)
Credit transaction, net

 

 
2.6

 

 

 
2.6

Other operating income (loss), net

 

 
221.6

 
(0.3
)
 

 
221.3

Operating (loss) income
(1.0
)
 

 
170.7

 
86.7

 

 
256.4

Intra-entity interest income (expense)

 
14.1

 
(138.8
)
 
124.7

 

 

Interest expense, net

 
(15.0
)
 
(16.5
)
 
(11.2
)
 

 
(42.7
)
(Loss) income before income taxes
(1.0
)
 
(0.9
)
 
15.4

 
200.2

 

 
213.7

Income taxes

 
0.2

 
(8.4
)
 
(37.5
)
 

 
(45.7
)
Equity in income of subsidiaries
169.0

 

 
(41.2
)
 
11.0

 
(138.8
)
 

Net income (loss)
$
168.0

 
$
(0.7
)
 
$
(34.2
)
 
$
173.7

 
$
(138.8
)
 
$
168.0

Dividends on redeemable convertible preferred shares
(24.6
)
 

 

 

 

 
(24.6
)
Net income (loss) attributable to common shareholders
$
143.4

 
$
(0.7
)
 
$
(34.2
)
 
$
173.7

 
$
(138.8
)
 
$
143.4




Condensed Consolidated Income Statement
For the 39 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Sales
$

 
$

 
$
3,955.0

 
$
183.5

 
$

 
$
4,138.5

Cost of sales

 

 
(2,688.0
)
 
(35.2
)
 

 
(2,723.2
)
Gross margin

 

 
1,267.0

 
148.3

 

 
1,415.3

Selling, general and administrative expenses
(0.9
)
 

 
(1,190.9
)
 
(73.1
)
 

 
(1,264.9
)
Other operating income (loss), net

 

 
227.6

 
(14.0
)
 

 
213.6

Operating (loss) income
(0.9
)
 

 
303.7

 
61.2

 

 
364.0

Intra-entity interest income (expense)

 
14.1

 
(142.2
)
 
128.1

 

 

Interest expense, net

 
(14.8
)
 
(12.1
)
 
(9.5
)
 

 
(36.4
)
(Loss) income before income taxes
(0.9
)
 
(0.7
)
 
149.4

 
179.8

 

 
327.6

Income taxes

 
0.1

 
(61.5
)
 
(20.5
)
 

 
(81.9
)
Equity in income of subsidiaries
246.6

 

 
48.8

 
93.1

 
(388.5
)
 

Net income (loss)
$
245.7

 
$
(0.6
)
 
$
136.7

 
$
252.4

 
$
(388.5
)
 
$
245.7

Dividends on redeemable convertible preferred shares
(2.2
)
 

 

 

 

 
(2.2
)
Net income (loss) attributable to common shareholders
$
243.5

 
$
(0.6
)
 
$
136.7

 
$
252.4

 
$
(388.5
)
 
$
243.5







Condensed Consolidated Statement of Comprehensive Income (Loss)
For the 13 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net (loss) income
$
(3.9
)
 
$
(0.3
)
 
$
(116.7
)
 
$
(3.3
)
 
$
120.3

 
$
(3.9
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
(6.5
)
 

 
(6.5
)
 

 
6.5

 
(6.5
)
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized loss
(0.2
)
 

 

 
(0.2
)
 
0.2

 
(0.2
)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
0.9

 

 
0.9

 

 
(0.9
)
 
0.9

Reclassification adjustment for gains to net income
(0.6
)
 

 
(0.6
)
 

 
0.6

 
(0.6
)
Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Actuarial loss
(0.9
)
 

 
(0.9
)
 

 
0.9

 
(0.9
)
Reclassification adjustment to net income for amortization of actuarial losses
0.6

 

 
0.6

 

 
(0.6
)
 
0.6

Reclassification adjustment to net income for amortization of net prior service credits
(0.4
)
 

 
(0.4
)
 

 
0.4

 
(0.4
)
Net curtailment gain and settlement loss
(3.0
)
 

 
(3.0
)
 

 
3.0

 
(3.0
)
Total other comprehensive (loss) income
(10.1
)
 

 
(9.9
)
 
(0.2
)
 
10.1

 
(10.1
)
Total comprehensive (loss) income
$
(14.0
)
 
$
(0.3
)
 
$
(126.6
)
 
$
(3.5
)
 
$
130.4

 
$
(14.0
)


Condensed Consolidated Statement of Comprehensive Income (Loss)
For the 13 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
$
17.0

 
$
(0.3
)
 
$
(75.4
)
 
$
17.5

 
$
58.2

 
$
17.0

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
(28.9
)
 

 
(32.5
)
 
3.6

 
28.9

 
(28.9
)
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized loss
(0.2
)
 

 

 
(0.2
)
 
0.2

 
(0.2
)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
1.9

 

 
1.9

 

 
(1.9
)
 
1.9

Reclassification adjustment for losses to net income
(0.1
)
 

 
(0.1
)
 

 
0.1

 
(0.1
)
Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Reclassification adjustment to net income for amortization of actuarial losses
0.4

 

 
0.4

 

 
(0.4
)
 
0.4

Reclassification adjustment to net income for amortization of net prior service credits
(0.4
)
 

 
(0.4
)
 

 
0.4

 
(0.4
)
Total other comprehensive (loss) income
(27.3
)
 

 
(30.7
)
 
3.4

 
27.3

 
(27.3
)
Total comprehensive (loss) income
$
(10.3
)
 
$
(0.3
)
 
$
(106.1
)
 
$
20.9

 
$
85.5

 
$
(10.3
)

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the 39 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
$
168.0

 
$
(0.7
)
 
$
(34.2
)
 
$
173.7

 
$
(138.8
)
 
$
168.0

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
18.6

 

 
18.6

 

 
(18.6
)
 
18.6

Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
0.3

 

 

 
0.3

 
(0.3
)
 
0.3

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
2.7

 

 
2.7

 

 
(2.7
)
 
2.7

Reclassification adjustment for gains to net income
(3.1
)
 

 
(3.1
)
 

 
3.1

 
(3.1
)
Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Actuarial loss
(0.9
)
 

 
(0.9
)
 

 
0.9

 
(0.9
)
Reclassification adjustment to net income for amortization of actuarial losses
1.8

 

 
1.8

 

 
(1.8
)
 
1.8

Reclassification adjustment to net income for amortization of net prior service credits
(1.1
)
 

 
(1.1
)
 

 
1.1

 
(1.1
)
Net curtailment gain and settlement loss
(3.0
)
 

 
(3.0
)
 
 
 
3.0

 
(3.0
)
Total other comprehensive income
15.3

 

 
15.0

 
0.3

 
(15.3
)
 
15.3

Total comprehensive income (loss)
$
183.3

 
$
(0.7
)
 
$
(19.2
)
 
$
174.0

 
$
(154.1
)
 
$
183.3



Condensed Consolidated Statement of Comprehensive Income (Loss)
For the 39 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
$
245.7

 
$
(0.6
)
 
$
136.7

 
$
252.4

 
$
(388.5
)
 
$
245.7

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
(38.0
)
 

 
(45.2
)
 
7.2

 
38.0

 
(38.0
)
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
0.2

 

 

 
0.2

 
(0.2
)
 
0.2

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
8.2

 

 
8.2

 

 
(8.2
)
 
8.2

Reclassification adjustment for losses to net income
1.6

 

 
1.6

 

 
(1.6
)
 
1.6

Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Reclassification adjustment to net income for amortization of actuarial losses
1.0

 

 
1.0

 

 
(1.0
)
 
1.0

Reclassification adjustment to net income for amortization of net prior service credits
(1.2
)
 

 
(1.2
)
 

 
1.2

 
(1.2
)
Total other comprehensive (loss) income
(28.2
)
 

 
(35.6
)
 
7.4

 
28.2

 
(28.2
)
Total comprehensive income (loss)
$
217.5

 
$
(0.6
)
 
$
101.1

 
$
259.8

 
$
(360.3
)
 
$
217.5



Condensed Consolidated Balance Sheet
October 28, 2017
(Unaudited)
(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
0.4

 
$
0.1

 
$
59.1

 
$
53.8

 
$

 
$
113.4

Accounts receivable, net

 

 
638.7

 
1.4

 

 
640.1

Intra-entity receivables, net
85.6

 
7.6

 

 
262.1

 
(355.3
)
 

Other receivables

 

 
55.6

 
24.7

 

 
80.3

Other current assets

 

 
140.0

 
5.0

 

 
145.0

Income taxes

 

 
17.3

 

 

 
17.3

Inventories

 

 
2,392.6

 
73.5

 

 
2,466.1

Total current assets
86.0

 
7.7

 
3,303.3

 
420.5

 
(355.3
)
 
3,462.2

Non-current assets:
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net

 

 
847.5

 
7.6

 

 
855.1

Goodwill

 

 
515.0

 
352.1

 

 
867.1

Intangible assets, net

 

 
410.4

 

 

 
410.4

Investment in subsidiaries
2,693.7

 

 
834.5

 
346.2

 
(3,874.4
)
 

Intra-entity receivables, net

 
400.0

 

 
2,835.0

 
(3,235.0
)
 

Other assets

 

 
136.9

 
32.2

 

 
169.1

Deferred tax assets

 

 
1.2

 
0.1

 

 
1.3

Retirement benefit asset

 

 
35.5

 

 

 
35.5

Total assets
$
2,779.7

 
$
407.7

 
$
6,084.3

 
$
3,993.7

 
$
(7,464.7
)
 
$
5,800.7

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

 
$
(0.7
)
 
$
292.5

 
$

 
$

 
$
291.8

Accounts payable

 

 
291.0

 
33.9

 

 
324.9

Intra-entity payables, net

 

 
355.3

 

 
(355.3
)
 

Accrued expenses and other current liabilities
27.6

 
7.1

 
372.1

 
23.7

 

 
430.5

Deferred revenue

 

 
259.6

 
10.7

 

 
270.3

Income taxes

 
(0.2
)
 
(24.3
)
 
24.5

 

 

Total current liabilities
27.6

 
6.2

 
1,546.2

 
92.8

 
(355.3
)
 
1,317.5

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
395.0

 
301.8

 

 

 
696.8

Intra-entity payables, net

 

 
3,235.0

 

 
(3,235.0
)
 

Other liabilities

 

 
238.8

 
5.6

 

 
244.4

Deferred revenue

 

 
646.1

 

 

 
646.1

Deferred tax liabilities

 

 
143.6

 
0.2

 

 
143.8

Total liabilities
27.6

 
401.2

 
6,111.5

 
98.6

 
(3,590.3
)
 
3,048.6

Series A redeemable convertible preferred shares
613.1

 

 

 

 

 
613.1

Total shareholders’ equity (deficit)
2,139.0

 
6.5

 
(27.2
)
 
3,895.1

 
(3,874.4
)
 
2,139.0

Total liabilities, preferred shares and shareholders’ equity
$
2,779.7

 
$
407.7

 
$
6,084.3

 
$
3,993.7

 
$
(7,464.7
)
 
$
5,800.7

Condensed Consolidated Balance Sheet
January 28, 2017

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1.7

 
$
0.1

 
$
70.3

 
$
26.6

 
$

 
$
98.7

Accounts receivable, net

 

 
1,858.0

 

 

 
1,858.0

Intra-entity receivables, net
12.7

 

 
145.1

 

 
(157.8
)
 

Other receivables

 

 
71.1

 
24.8

 

 
95.9

Other current assets

 

 
131.4

 
4.9

 

 
136.3

Income taxes

 

 
4.4

 

 

 
4.4

Inventories

 

 
2,371.8

 
77.5

 

 
2,449.3

Total current assets
14.4

 
0.1

 
4,652.1

 
133.8

 
(157.8
)
 
4,642.6

Non-current assets:
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net

 

 
818.5

 
4.4

 

 
822.9

Goodwill

 

 
514.0

 
3.6

 

 
517.6

Intangible assets, net

 

 
417.0

 

 

 
417.0

Investment in subsidiaries
3,117.6

 

 
721.6

 
590.9

 
(4,430.1
)
 

Intra-entity receivables, net

 
402.9

 

 
3,647.1

 
(4,050.0
)
 

Other assets

 

 
134.8

 
30.3

 

 
165.1

Deferred tax assets

 

 
0.6

 
0.1

 

 
0.7

Retirement benefit asset

 

 
31.9

 

 

 
31.9

Total assets
$
3,132.0

 
$
403.0

 
$
7,290.5

 
$
4,410.2

 
$
(8,637.9
)
 
$
6,597.8

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

 
$
(0.7
)
 
$
91.8

 
$

 
$

 
$
91.1

Accounts payable

 

 
248.2

 
7.5

 

 
255.7

Intra-entity payables, net

 

 

 
157.8

 
(157.8
)
 

Accrued expenses and other current liabilities
29.9

 
2.5

 
429.2

 
16.6

 

 
478.2

Deferred revenue

 

 
275.5

 
1.4

 

 
276.9

Income taxes

 
(0.2
)
 
115.5

 
(13.5
)
 

 
101.8

Total current liabilities
29.9

 
1.6

 
1,160.2

 
169.8

 
(157.8
)
 
1,203.7

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
394.3

 
323.6

 
600.0

 

 
1,317.9

Intra-entity payables, net

 

 
4,050.0

 

 
(4,050.0
)
 

Other liabilities

 

 
208.7

 
5.0

 

 
213.7

Deferred revenue

 

 
659.0

 

 

 
659.0

Deferred tax liabilities

 

 
101.4

 

 

 
101.4

Total liabilities
29.9

 
395.9

 
6,502.9

 
774.8

 
(4,207.8
)
 
3,495.7

Series A redeemable convertible preferred shares
611.9

 

 

 

 

 
611.9

Total shareholders’ equity
2,490.2

 
7.1

 
787.6

 
3,635.4

 
(4,430.1
)
 
2,490.2

Total liabilities, preferred shares and shareholders’ equity
$
3,132.0

 
$
403.0

 
$
7,290.5

 
$
4,410.2

 
$
(8,637.9
)
 
$
6,597.8



Condensed Consolidated Balance Sheet
October 29, 2016
(Unaudited)
(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
0.2

 
$
0.1

 
$
55.7

 
$
26.7

 
$

 
$
82.7

Accounts receivable, net

 

 
1,581.1

 

 

 
1,581.1

Intra-entity receivables, net
50.4

 

 

 
278.9

 
(329.3
)
 

Other receivables

 

 
52.0

 
22.2

 

 
74.2

Other current assets

 

 
140.3

 
6.5

 

 
146.8

Income taxes

 
0.1

 
35.6

 
(14.9
)
 

 
20.8

Inventories

 

 
2,578.3

 
71.1

 

 
2,649.4

Total current assets
50.6

 
0.2

 
4,443.0

 
390.5

 
(329.3
)
 
4,555.0

Non-current assets:
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net

 

 
786.4

 
4.7

 

 
791.1

Goodwill

 

 
513.4

 
3.6

 

 
517.0

Intangible assets, net

 

 
419.8

 

 

 
419.8

Investment in subsidiaries
2,812.5

 

 
586.7

 
474.4

 
(3,873.6
)
 

Intra-entity receivables, net

 
407.6

 

 
3,647.4

 
(4,055.0
)
 

Other assets

 

 
126.2

 
31.3

 

 
157.5

Deferred tax assets

 

 

 

 

 

Retirement benefit asset

 

 
47.1

 

 

 
47.1

Total assets
$
2,863.1

 
$
407.8

 
$
6,922.6

 
$
4,551.9

 
$
(8,257.9
)
 
$
6,487.5

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

 
$
(0.7
)
 
$
289.5

 
$

 
$

 
$
288.8

Accounts payable

 

 
376.4

 
5.8

 

 
382.2

Intra-entity payables, net

 

 
329.3

 

 
(329.3
)
 

Accrued expenses and other current liabilities
20.2

 
7.1

 
360.1

 
15.5

 

 
402.9

Deferred revenue

 

 
256.7

 

 

 
256.7

Income taxes

 

 
3.9

 
0.5

 

 
4.4

Total current liabilities
20.2

 
6.4

 
1,615.9

 
21.8

 
(329.3
)
 
1,335.0

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
394.1

 
330.1

 
600.0

 

 
1,324.2

Intra-entity payables, net

 

 
4,055.0

 

 
(4,055.0
)
 

Other liabilities

 

 
213.7

 
6.2

 

 
219.9

Deferred revenue

 

 
632.1

 

 

 
632.1

Deferred tax liabilities

 

 
133.5

 
(0.1
)
 

 
133.4

Total liabilities
20.2

 
400.5

 
6,980.3

 
627.9

 
(4,384.3
)
 
3,644.6

Series A redeemable convertible preferred shares
611.7

 

 

 

 

 
611.7

Total shareholders’ equity (deficit)
2,231.2

 
7.3

 
(57.7
)
 
3,924.0

 
(3,873.6
)
 
2,231.2

Total liabilities, preferred shares and shareholders’ equity
$
2,863.1

 
$
407.8

 
$
6,922.6

 
$
4,551.9

 
$
(8,257.9
)
 
$
6,487.5






Condensed Consolidated Statement of Cash Flows
For the 39 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash provided by operating activities
$
617.1

 
$
4.6

 
$
1,467.2

 
$
511.4

 
$
(1,118.0
)
 
$
1,482.3

Investing activities
 
 
 
 
 
 
 
 
 
 
 
Purchase of property, plant and equipment

 

 
(165.7
)
 
(0.4
)
 

 
(166.1
)
Purchase of available-for-sale securities

 

 

 
(1.7
)
 

 
(1.7
)
Proceeds from available-for-sale securities

 

 

 
0.9

 

 
0.9

Acquisition of R2Net Inc., net of cash acquired

 

 
(332.4
)
 

 

 
(332.4
)
Net cash used in investing activities

 

 
(498.1
)
 
(1.2
)
 

 
(499.3
)
Financing activities
 
 
 
 
 
 
 
 
 
 
 
Dividends paid on common shares
(57.7
)
 

 

 

 

 
(57.7
)
Dividends paid on redeemable convertible preferred shares
(26.9
)
 

 

 

 

 
(26.9
)
Intra-entity dividends paid

 

 
(800.0
)
 
(318.0
)
 
1,118.0

 

Proceeds from term and bridge loans

 

 
350.0

 

 

 
350.0

Repayments of term and bridge loans

 

 
(365.7
)
 

 

 
(365.7
)
Proceeds from securitization facility

 

 

 
1,745.9

 

 
1,745.9

Repayments of securitization facility

 

 

 
(2,345.9
)
 

 
(2,345.9
)
Proceeds from revolving credit facility

 

 
605.0

 

 

 
605.0

Repayments of revolving credit facility

 

 
(405.0
)
 

 

 
(405.0
)
Repurchase of common shares
(460.0
)
 

 

 

 

 
(460.0
)
Repayments of bank overdrafts

 

 
(5.9
)
 

 

 
(5.9
)
Other financing activities
(3.1
)
 

 
(1.4
)
 

 

 
(4.5
)
Intra-entity activity, net
(70.7
)
 
(4.6
)
 
(359.7
)
 
435.0

 

 

Net cash used in financing activities
(618.4
)
 
(4.6
)
 
(982.7
)
 
(483.0
)
 
1,118.0

 
(970.7
)
Cash and cash equivalents at beginning of period
1.7

 
0.1

 
70.3

 
26.6

 

 
98.7

(Decrease) increase in cash and cash equivalents
(1.3
)
 

 
(13.6
)
 
27.2

 

 
12.3

Effect of exchange rate changes on cash and cash equivalents

 

 
2.4

 

 

 
2.4

Cash and cash equivalents at end of period
$
0.4

 
$
0.1

 
$
59.1

 
$
53.8

 
$

 
$
113.4


Condensed Consolidated Statement of Cash Flows
For the 39 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash provided by operating activities
$
558.7

 
$
4.9

 
$
385.1

 
$
391.4

 
$
(979.2
)
 
$
360.9

Investing activities
 
 
 
 
 
 
 
 
 
 
 
Purchase of property, plant and equipment

 

 
(195.6
)
 

 

 
(195.6
)
Investment in subsidiaries
(91.0
)
 

 

 

 
91.0

 

Purchase of available-for-sale securities

 

 

 
(10.4
)
 

 
(10.4
)
Proceeds from available-for-sale securities

 

 

 
10.0

 

 
10.0

Net cash used in investing activities
(91.0
)
 

 
(195.6
)
 
(0.4
)
 
91.0

 
(196.0
)
Financing activities
 
 
 
 
 
 
 
 
 
 
 
Dividends paid on common shares
(57.5
)
 

 

 

 

 
(57.5
)
Dividends paid on redeemable convertible preferred shares

 

 

 

 

 

Intra-entity dividends paid

 

 
(650.0
)
 
(329.2
)
 
979.2

 

Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
611.6

 

 

 

 

 
611.6

Repayments of term loan

 

 
(12.0
)
 

 

 
(12.0
)
Proceeds from securitization facility

 

 

 
1,837.1

 

 
1,837.1

Repayments of securitization facility

 

 

 
(1,837.1
)
 

 
(1,837.1
)
Proceeds from revolving credit facility

 

 
598.0

 

 

 
598.0

Repayments of revolving credit facility

 

 
(339.0
)
 

 

 
(339.0
)
Repurchase of common shares
(1,000.0
)
 

 

 

 

 
(1,000.0
)
Repayments of bank overdrafts

 

 
(13.3
)
 

 

 
(13.3
)
Other financing activities
(4.4
)
 

 
90.0

 
(0.6
)
 
(91.0
)
 
(6.0
)
Intra-entity activity, net
(19.1
)
 
(4.9
)
 
91.6

 
(67.6
)
 

 

Net cash used in financing activities
(469.4
)
 
(4.9
)
 
(234.7
)
 
(397.4
)
 
888.2

 
(218.2
)
Cash and cash equivalents at beginning of period
1.9

 
0.1

 
102.0

 
33.7

 

 
137.7

(Decrease) increase in cash and cash equivalents
(1.7
)
 

 
(45.2
)
 
(6.4
)
 

 
(53.3
)
Effect of exchange rate changes on cash and cash equivalents

 

 
(1.1
)
 
(0.6
)
 

 
(1.7
)
Cash and cash equivalents at end of period
$
0.2

 
$
0.1

 
$
55.7

 
$
26.7

 
$

 
$
82.7

Organization and principal accounting policies (Policies)
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 January 28, 2017 filed with the SEC on March 16, 2017.
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, indefinite-lived intangible assets, depreciation and amortization of long-lived assets, as well as accounting for business combinations.
Foreign currency translation
The financial position and operating results of certain foreign operations, including the UK Jewelry division and the Canadian operations of the Zale Jewelry 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 income statements.
New accounting pronouncements adopted during the period
Inventory
In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” The new guidance states that inventory will be measured at the lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The adoption of this guidance in the first quarter of Fiscal 2018 did not have a material impact on the Company’s financial position or results of operations.
Share-based compensation
In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted all aspects of this guidance prospectively in the first quarter of Fiscal 2018 with a policy election to continue to estimate expected forfeitures in determining the amount of share-based compensation expense to be recognized. The adoption of this guidance did not have a material impact on the Company’s financial position or results of operations. See Note 10 for additional information regarding the impact on the Company’s results of operations in the first quarter of Fiscal 2018.
New accounting pronouncements to be adopted in future periods
Derivatives and Hedging
In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The new guidance 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. ASU No. 2017-12 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Signet is currently assessing the timing of adoption and the impact this guidance will have on the Company’s financial position or results of operations.
Credit Losses
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The new guidance 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 collectibility. ASU No. 2016-13 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted. Signet currently expects to adopt this guidance when effective, and continues to assess the impact the adoption of this guidance will have on the Company’s financial position or results of operations.
Revenue recognition
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The new guidance affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 provides alternative methods of retrospective adoption. In August 2015, the FASB issued an update (ASU No. 2015-14) that defers the effective date by one year. As a result, ASU No. 2014-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016, including interim periods within that annual period.
The FASB has recently issued updates to certain aspects of the guidance to address implementation issues. In March 2016, the FASB issued additional guidance concerning “Principal versus Agent” considerations (reporting revenue gross versus net); in April 2016, the FASB issued additional guidance on identifying performance obligations and licensing; and in May 2016, the FASB issued additional guidance on collectibility, noncash consideration, presentation of sales tax, and transition. These updates are intended to improve the operability and understandability of the implementation guidance and have the same effective date and transition requirements as ASU No. 2014-09 guidance discussed above. Management continues to evaluate the impact this ASU, the related amendments and the interpretive guidance will have on the Company's consolidated financial statements.
Signet is in the process of evaluating contracts with customers under the new guidance and cannot currently estimate the financial statement impact of adoption. The Company expects to progress through its assessment during Fiscal 2018 and will adopt this guidance in the first quarter of our fiscal year ending February 2, 2019. The Company is evaluating the impact of the standard through a cross-functional approach to analyze the impacts of the guidance across all of its revenue streams. This includes the review of current accounting policies and practices to identify potential differences that would result from applying the guidance. The majority of the Company’s revenue is generated from sales of finished products, which will continue to be recognized when control is transferred to the customer. The Company intends to adopt the standard using the modified retrospective method.
Financial instruments
In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The new guidance primarily impacts accounting for equity investments and financial liabilities under the fair value option, as well as, the presentation and disclosure requirements for financial instruments. Under the new guidance, equity investments will generally be measured at fair value, with subsequent changes in fair value recognized in net income. ASU No. 2016-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Signet plans to adopt this guidance in the first quarter of our fiscal year ending February 2, 2019. Signet does not expect the adoption of this guidance to have a material impact on the Company’s financial position or results of operations.
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 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. ASU No. 2016-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Signet is currently assessing the timing of adoption which is effective for the first quarter of our fiscal year ending February 1, 2020 and the impact that adopting this guidance will have on the Company’s financial position or results of operations.
Liabilities
In March 2016, the FASB issued ASU No. 2016-04, “Liabilities - Extinguishments of Liabilities (Subtopic 405-20).” The new guidance addresses diversity in practice related to the derecognition of a prepaid stored-value product liability. Liabilities related to the sale of prepaid stored-value products within the scope of this update are financial liabilities. ASU No. 2016-04 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Signet plans to adopt this guidance in the first quarter of our fiscal year ending February 2, 2019. Signet does not expect the adoption of this guidance to have a material impact on the Company’s financial position or results of operations.
Intangibles
In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment.” The new guidance requires a single-step quantitative test to identify and measure goodwill impairment based on the excess of a reporting unit's carrying amount over its fair value. A qualitative assessment may still be completed first for an entity to determine if a quantitative impairment test is necessary. ASU No. 2017-04 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted. Signet is currently assessing the timing of adoption and the impact this guidance will have on the Company’s financial position or results of operations.
Retirement Benefits
In March 2017, the FASB issued ASU No. 2017-07, “Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The new guidance requires entities to present the service cost component of the net periodic pension cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Entities will present the other components of net benefit cost separately from the service cost component and outside of operating profit within the income statement. In addition, only the service cost component will be eligible for capitalization in assets. ASU No. 2017-07 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Signet is currently assessing the timing of adoption and the impact this guidance will have on the Company’s financial position or results of operations.
Acquisition (Tables)
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following table summarizes the preliminary fair values identified for the assets acquired and liabilities assumed in the R2Net acquisition as of September 12, 2017:
(in millions)
Initial amounts
Cash and cash equivalents
$
47.3

Inventories
12.1

Other current assets
9.7

Property, plant and equipment
3.5

Current liabilities
(41.4
)
Fair value of net assets acquired
31.2

Goodwill(1)
348.5

Total consideration transferred
$
379.7


(1) 
The amount of goodwill generated will be adjusted for any additional assets or liabilities identified by the Company or for any adjustments to the preliminary fair values identified for the assets acquired and liabilities assumed in the R2Net acquisition reflected above.
Segment information (Tables)
Segment reporting information, by segment
 
13 weeks ended
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Sales:
 
 
 
 
 
 
 
Sterling Jewelers
$
698.7

 
$
712.5

 
$
2,437.8

 
$
2,532.3

Zale Jewelry
268.2

 
282.4

 
933.7

 
994.8

Piercing Pagoda
55.4

 
53.4

 
187.4

 
179.4

UK Jewelry
128.4

 
130.3

 
382.8

 
419.5

Other
6.2

 
7.6

 
18.2

 
12.5

Total sales
$
1,156.9

 
$
1,186.2

 
$
3,959.9

 
$
4,138.5

 
 
 
 
 
 
 
 
Operating income:
 
 
 
 
 
 
 
Sterling Jewelers
$
73.7

(1) 
$
78.6

 
$
362.6

(2) 
$
417.8

Zale Jewelry
(15.7
)
 
(19.3
)
 
(12.4
)
 
(0.5
)
Piercing Pagoda
(4.2
)
 
(5.4
)
 

 
2.2

UK Jewelry
(1.7
)
 

 
(1.9
)
 
3.0

Other
(46.6
)
(3) 
(21.8
)
 
(91.9
)
(4) 
(58.5
)
Total operating income
$
5.5

 
$
32.1

 
$
256.4

 
$
364.0


(1) 
For the 13 weeks ended October 28, 2017, amount includes $10.2 million gain upon recognition of beneficial interest in connection with the sale of the prime portion of in-house receivables. See Note 3 for additional information.
(2) 
For the 39 weeks ended October 28, 2017, amount includes $20.7 million gain related to the reversal of the allowance for credit losses for the in-house receivables sold, as well as the $10.2 million gain upon recognition of beneficial interest in connection with the sale of the prime portion of in-house receivables. See Note 3 for additional information.
(3) 
For the 13 weeks ended October 28, 2017, amount includes $22.4 million of transaction costs related to the credit transaction and $8.1 million of R2Net acquisition costs. See Note 3 and Note 4 for additional information regarding credit transaction and acquisition of R2Net, respectively.
(4) 
For the 39 weeks ended October 28, 2017, amount includes $28.3 million of transaction costs related to the credit transaction, $9.4 million of R2Net acquisition costs, and $3.4 million of CEO transition costs. See Note 3 and Note 4 for additional information regarding credit transaction and acquisition of R2Net, respectively.
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Total assets:
 
 
 
 
 
Sterling Jewelers
$
3,260.0

 
$
4,015.4

 
$
3,715.6

Zale Jewelry
1,885.0

 
1,940.7

 
2,061.7

Piercing Pagoda
139.8

 
141.6

 
136.1

UK Jewelry
404.8

 
372.6

 
407.1

Other
111.1

 
127.5

 
167.0

Total assets
$
5,800.7

 
$
6,597.8

 
$
6,487.5

Redeemable preferred shares - (Tables)
Redeemable Preferred Shares
(in millions, except conversion rate and conversion price)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Conversion rate
10.7707

 
10.6529

 
10.6529

Conversion price
$
92.8445

 
$
93.8712

 
$
93.8712

Potential impact of preferred shares if-converted to common shares
6.7

 
6.7

 
6.7

Liquidation preference
$
632.8

 
$
636.3

 
$
627.1

Shareholders' equity (Tables)
Common shares repurchased during the 39 weeks ended October 28, 2017 and October 29, 2016 were as follows:
 
 
 
39 weeks ended October 28, 2017
 
39 weeks ended October 29, 2016
(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
2016 Program(1)
$
1,375.0

 
8.1

 
$
460.0

 
$
56.91

 
8.7

 
$
706.9

 
$
81.32

2013 Program(2)
$
350.0

 
n/a

 
n/a

 
n/a

 
1.2

 
135.6

 
$
111.26

Total
 
 
8.1

 
$
460.0

 
$
56.91

 
9.9

 
$
842.5

 
$
85.00

(1) 
The 2016 Program had $50.6 million remaining as of October 28, 2017.
(2) 
The 2013 Program was completed in May 2016.
n/a
Not applicable.
Dividends on common shares
 
Fiscal 2018
 
Fiscal 2017
(in millions, except per share amounts)
Cash dividend per share
 
Total
dividends
 
Cash dividend
per share
 
Total
dividends
First quarter
$
0.31

 
$
21.3

 
$
0.26

 
$
20.4

Second quarter
0.31

 
18.7

 
0.26

 
19.7

Third quarter(1)
0.31

 
18.7

 
0.26

 
18.1

Total
$
0.93

 
$
58.7

 
$
0.78

 
$
58.2

(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 October 28, 2017 and October 29, 2016, $18.7 million and $18.1 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 third quarter of Fiscal 2018 and Fiscal 2017, respectively.
Dividends on preferred shares
 
Fiscal 2018
 
Fiscal 2017
(in millions)
Total cash
dividends
 
Total cash
dividends
First quarter
$
7.8

 
$

Second quarter
7.8

 

Third quarter(1)
7.8

 

Total
$
23.4

 
$

(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 October 28, 2017 and October 29, 2016, $7.8 million and $2.1 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 third quarter of Fiscal 2018 and Fiscal 2017, respectively.
Earnings (loss) per common share (“EPS”) (Tables)
The computation of basic EPS is outlined in the table below:
 
13 weeks ended
 
39 weeks ended
(in millions, except per share amounts)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Numerator:
 
 
 
 
 
 
 
Net (loss) income attributable to common shareholders
$
(12.1
)
 
$
14.8

 
$
143.4

 
$
243.5

Denominator:
 
 
 
 
 
 
 
Weighted average common shares outstanding
60.1

 
73.5

 
64.0

 
76.4

EPS – basic
$
(0.20
)
 
$
0.20

 
$
2.24

 
$
3.19

The computation of diluted EPS is outlined in the table below:
 
13 weeks ended
 
39 weeks ended
(in millions, except per share amounts)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Numerator:
 
 
 
 
 
 
 
Net (loss) income attributable to common shareholders
$
(12.1
)
 
$
14.8

 
$
143.4

 
$
243.5

Add: Dividends on preferred shares

 

 

 

Numerator for diluted EPS
$
(12.1
)
 
$
14.8

 
$
143.4

 
$
243.5

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Weighted average common shares outstanding
60.1

 
73.5

 
64.0

 
76.4

Plus: Dilutive effect of share awards

 
0.1

 
0.1

 
0.1

Diluted weighted average common shares outstanding
60.1

 
73.6

 
64.1

 
76.5

 
 
 
 
 
 
 
 
EPS – diluted
$
(0.20
)
 
$
0.20

 
$
2.24

 
$
3.18

The calculation of diluted EPS excludes the following items for each respective period on the basis that their effect would be anti-dilutive.
(in millions)
October 28, 2017
 
October 29, 2016
Share awards
0.3

 
0.3

Potential impact of preferred shares
6.7

 
6.7

Total anti-dilutive shares
7.0

 
7.0

Accumulated other comprehensive income (loss) (Tables)
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 January 28, 2017
$
(263.4
)
 
$
(0.4
)
 
$
2.4

 
$
(55.5
)
 
$
9.2

 
$
(307.7
)
Other comprehensive income (“OCI”) before reclassifications
18.6

 
0.3

 
2.7

 
(0.9
)
 

 
20.7

Amounts reclassified from AOCI to net income

 

 
(3.1
)
 
4.0

 
(6.3
)
 
(5.4
)
Net current period OCI
18.6

 
0.3

 
(0.4
)
 
3.1

 
(6.3
)
 
15.3

Balance at October 28, 2017
$
(244.8
)
 
$
(0.1
)
 
$
2.0

 
$
(52.4
)
 
$
2.9

 
$
(292.4
)
The amounts reclassified from AOCI were as follows:
 
Amounts reclassified from AOCI
 
 
 
13 weeks ended
 
39 weeks ended
 
 
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
 
Income statement caption
(Gains) losses on cash flow hedges:
 
 
 
 
 
 
 
 
 
Foreign currency contracts
$
(0.8
)
 
$
(0.4
)
 
$
(3.0
)
 
$
(1.0
)
 
Cost of sales (see Note 15)
Interest rate swaps

 
0.5

 
0.4

 
1.7

 
Interest expense, net
(see Note 15)
Commodity contracts

 
(0.3
)
 
(1.5
)
 
1.7

 
Cost of sales (see Note 15)
Total before income tax
(0.8
)
 
(0.2
)
 
(4.1
)
 
2.4

 
 
Income taxes
0.2

 
0.1

 
1.0

 
(0.8
)
 
 
Net of tax
(0.6
)
 
(0.1
)
 
(3.1
)
 
1.6

 
 
 
 
 
 
 
 
 
 
 
 
Defined benefit pension plan items:
 
 
 
 
 
 
 
 
 
Amortization of unrecognized actuarial losses
0.7

 
0.4

 
2.2

 
1.2

 
Selling, general and administrative expenses(1)
Amortization of unrecognized net prior service credits
(0.4
)
 
(0.5
)
 
(1.3
)
 
(1.5
)
 
Selling, general and administrative expenses(1)
Net curtailment gain and settlement loss
(3.7
)
 

 
(3.7
)
 

 
Selling, general and administrative expenses(1)
Total before income tax
(3.4
)
 
(0.1
)
 
(2.8
)
 
(0.3
)
 
 
Income taxes
0.6

 
0.1

 
0.5

 
0.1

 
 
Net of tax
(2.8
)
 

 
(2.3
)
 
(0.2
)
 
 
 
 
 
 
 
 
 
 
 
 
Total reclassifications, net of tax
$
(3.4
)
 
$
(0.1
)
 
$
(5.4
)
 
$
1.4

 
 
(1) 
These items are included in the computation of net periodic pension benefit. See Note 22 for additional information.
Income taxes (Tables)
Reconciliation Of Effective Tax Rate
 
39 weeks ended
 
October 28, 2017
 
October 29, 2016
Forecasted annual effective tax rate
21.2
%
 
25.0
%
Discrete items recognized
0.2
%
 
%
Effective tax rate recognized in income statement
21.4
%
 
25.0
%
Accounts receivable, net (Tables)
Signet’s accounts receivable primarily consist of US customer in-house financing receivables. The accounts receivable portfolio consists of a population that is of similar characteristics and is evaluated collectively for impairment.
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Accounts receivable by portfolio segment, net:
 
 
 
 
 
Sterling Jewelers customer in-house finance receivables
$
597.7

 
$
1,813.3

 
$
1,546.3

Zale customer in-house finance receivables
32.3

 
33.4

 
26.4

Other accounts receivable
10.1

 
11.3

 
8.4

Total accounts receivable, net
$
640.1

 
$
1,858.0

 
$
1,581.1

The activity in the allowance for credit losses on Sterling Jewelers customer in-house finance receivables is shown below:
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
Beginning balance
$
(138.7
)
 
$
(130.0
)
Charge-offs, net
160.9

 
143.1

Recoveries
30.1

 
26.8

Provision
(181.8
)
 
(172.9
)
Reversal of allowance on receivables previously held for sale
20.7

 

Ending balance
$
(108.8
)
 
$
(133.0
)
Ending receivable balance evaluated for impairment
706.5

 
1,679.3

Sterling Jewelers customer in-house finance receivables, net
$
597.7

 
$
1,546.3

The credit quality indicator and age analysis of Sterling Jewelers customer in-house finance receivables are shown below:
   
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
Performing:
 
 
 
 
 
 
 
 
 
 
 
Current, aged 0 – 30 days
$
586.5

 
$
(50.3
)
 
$
1,538.2

 
$
(47.2
)
 
$
1,294.9

 
$
(39.3
)
Past due, aged 31 – 60 days
40.3

 
(3.5
)
 
282.0

 
(9.0
)
 
250.6

 
(8.1
)
Past due, aged 61 – 90 days
27.1

 
(2.4
)
 
51.6

 
(2.3
)
 
50.7

 
(2.5
)
Non Performing:
 
 
 
 
 
 
 
 
 
 
 
Past due, aged more than 90 days
52.6

 
(52.6
)
 
80.2

 
(80.2
)
 
83.1

 
(83.1
)
 
$
706.5

 
$
(108.8
)
 
$
1,952.0

 
$
(138.7
)
 
$
1,679.3

 
$
(133.0
)
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(as a % of the ending receivable balance)
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
 
Gross
 
Valuation
allowance
Performing
 
 
 
 
 
 
 
 
 
 
 
Current, aged 0 – 30 days
83.0
%
 
8.6
%
 
78.8
%
 
3.1
%
 
77.2
%
 
3.0
%
Past due, aged 31 – 60 days
5.7
%
 
8.7
%
 
14.5
%
 
3.2
%
 
14.9
%
 
3.2
%
Past due, aged 61 – 90 days
3.8
%
 
8.9
%
 
2.6
%
 
4.5
%
 
3.0
%
 
4.9
%
Non Performing
 
 
 
 
 
 
 
 
 
 
 
Past due, aged more than 90 days
7.5
%
 
100.0
%
 
4.1
%
 
100.0
%
 
4.9
%
 
100.0
%
 
100.0
%
 
15.4
%
 
100.0
%
 
7.1
%
 
100.0
%
 
7.9
%
Inventories (Tables)
Schedule of Inventory, Current
The following table summarizes the Company’s inventory by classification:
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Raw materials
$
68.2

 
$
60.8

 
$
71.2

Finished goods
2,397.9

 
2,388.5

 
2,578.2

Total inventories
$
2,466.1

 
$
2,449.3

 
$
2,649.4

Goodwill and intangibles (Tables)
The following table summarizes the Company’s goodwill by reportable segment:
(in millions)
Sterling
Jewelers
 
Zale
Jewelry
 
Piercing
Pagoda
 
UK Jewelry
 
Other
 
Total
Balance at January 30, 2016
$
23.2

 
$
488.7

 
$

 
$

 
$
3.6

 
$
515.5

Impact of foreign exchange

 
2.1

 

 

 

 
2.1

Balance at January 28, 2017
23.2

 
490.8

 

 

 
3.6

 
517.6

Acquisitions
348.5

 

 

 

 

 
348.5

Impact of foreign exchange

 
1.0

 

 

 

 
1.0

Balance at October 28, 2017
$
371.7

 
$
491.8

 
$

 
$

 
$
3.6

 
$
867.1

The following table provides detail regarding the composition of intangible assets and liabilities:
 
 
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Balance sheet location
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net
carrying
amount
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net
carrying
amount
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net
carrying
amount
Definite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade names
Intangible assets, net
 
$
1.5

 
$
(1.0
)
 
$
0.5

 
$
1.4

 
$
(0.8
)
 
$
0.6

 
$
1.4

 
$
(0.7
)
 
$
0.7

Favorable leases
Intangible assets, net
 
47.9

 
(44.1
)
 
3.8

 
47.6

 
(36.0
)
 
11.6

 
47.5

 
(32.6
)
 
14.9

Total definite-lived intangible assets
 
49.4

 
(45.1
)
 
4.3

 
49.0

 
(36.8
)
 
12.2

 
48.9

 
(33.3
)
 
15.6

Indefinite-lived trade names
Intangible assets, net
 
406.1

 

 
406.1

 
404.8

 

 
404.8

 
404.2

 

 
404.2

Total intangible assets, net
 
$
455.5

 
$
(45.1
)
 
$
410.4

 
$
453.8

 
$
(36.8
)
 
$
417.0

 
$
453.1

 
$
(33.3
)
 
$
419.8

Definite-lived intangible liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unfavorable leases
Other liabilities
 
$
(48.5
)
 
$
45.4

 
$
(3.1
)
 
$
(48.3
)
 
$
38.2

 
$
(10.1
)
 
$
(48.1
)
 
$
34.7

 
$
(13.4
)
Unfavorable contracts
Other liabilities
 
(65.6
)
 
37.6

 
(28.0
)
 
(65.6
)
 
33.5

 
(32.1
)
 
(65.6
)
 
32.1

 
(33.5
)
Total intangible liabilities, net
 
$
(114.1
)
 
$
83.0

 
$
(31.1
)
 
$
(113.9
)
 
$
71.7

 
$
(42.2
)
 
$
(113.7
)
 
$
66.8

 
$
(46.9
)
Other assets (Tables)
Other Assets
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Deferred ESP selling costs
$
86.0

 
$
86.1

 
$
81.8

Investments(1)
28.7

 
27.2

 
27.5

Other assets
54.4

 
51.8

 
48.2

Total other assets
$
169.1

 
$
165.1

 
$
157.5


(1)     All investments are classified as available-for-sale and reported at fair value.
Derivatives (Tables)
The following table summarizes the fair value and presentation of derivative instruments in the condensed consolidated balance sheets:
 
Fair value of derivative assets
(in millions)
Balance sheet location
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Foreign currency contracts
Other current assets
 
$
0.2

 
$
1.4

 
$
3.5

Commodity contracts
Other current assets
 
0.7

 

 
0.6

Interest rate swaps
Other assets
 
1.3

 
0.4

 

 
 
 
$
2.2

 
$
1.8

 
$
4.1

 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign currency contracts
Other current assets
 

 
1.8

 

Total derivative assets
 
 
$
2.2

 
$
3.6

 
$
4.1

 
Fair value of derivative liabilities
(in millions)
Balance sheet location
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Foreign currency contracts
Other current liabilities
 
$
(0.7
)
 
$
(0.2
)
 
$

Commodity contracts
Other current liabilities
 

 
(3.4
)
 
(0.7
)
Interest rate swaps
Other liabilities
 

 

 
(2.3
)
 
 
 
$
(0.7
)
 
$
(3.6
)
 
$
(3.0
)
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign currency contracts
Other current liabilities
 
(0.6
)
 

 
(0.1
)
Total derivative liabilities
 
 
$
(1.3
)
 
$
(3.6
)
 
$
(3.1
)
The following table summarizes the pre-tax gains recorded in AOCI for derivatives designated in cash flow hedging relationships:
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Foreign currency contracts
$

 
$
4.1

 
$
6.4

Commodity contracts
1.5

 
(2.1
)
 
3.8

Interest rate swaps
1.3

 
0.4

 
(2.3
)
Gains recorded in AOCI
$
2.8

 
$
2.4

 
$
7.9

The following tables summarize the effect of derivative instruments designated as cash flow hedges in OCI and the condensed consolidated income statements:
Foreign currency contracts
 
 
 
13 weeks ended
 
39 weeks ended
(in millions)
Income statement caption
 
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Gains recorded in AOCI, beginning of period
 
 
$
0.6

 
$
3.8

 
$
4.1

 
$
1.4

Current period (losses) gains recognized in OCI
 
 
0.2

 
3.0

 
(1.1
)
 
6.0

Gains reclassified from AOCI to net income
Cost of sales
 
(0.8
)
 
(0.4
)
 
(3.0
)
 
(1.0
)
Gains recorded in AOCI, end of period
 
 
$

 
$
6.4

 
$

 
$
6.4

Commodity contracts
 
 
 
13 weeks ended
 
39 weeks ended
(in millions)
Income statement caption
 
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Gains (losses) recorded in AOCI, beginning of period
 
 
$
1.0

 
$
6.2

 
$
(2.1
)
 
$
(3.7
)
Current period (losses) gains recognized in OCI
 
 
0.5

 
(2.1
)
 
5.1

 
5.8

(Gains) losses reclassified from AOCI to net income
Cost of sales
 

 
(0.3
)
 
(1.5
)
 
1.7

Gains recorded in AOCI, end of period
 
 
$
1.5

 
$
3.8

 
$
1.5

 
$
3.8

Interest rate swaps
 
 
 
13 weeks ended
 
39 weeks ended
(in millions)
Income statement caption
 
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Gains (losses) recorded in AOCI, beginning of period
 
 
$
0.7

 
$
(3.8
)
 
$
0.4

 
$
(3.4
)
Current period gains (losses) recognized in OCI
 
 
0.6

 
1.0

 
0.5

 
(0.6
)
Losses reclassified from AOCI to net income
Interest expense, net
 

 
0.5

 
0.4

 
1.7

Gains (losses) recorded in AOCI, end of period
 
 
$
1.3

 
$
(2.3
)
 
$
1.3

 
$
(2.3
)
The following table presents the effects of the Company’s derivatives instruments not designated as cash flow hedges in the condensed consolidated income statements:
 
 
 
13 weeks ended
 
39 weeks ended
(in millions)
Income statement caption
 
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
Foreign currency contracts
Other operating income, net
 
$
(0.1
)
 
$
1.6

 
$
3.1

 
$
3.2

Fair value measurements (Tables)
The methods Signet uses to determine fair value on an instrument-specific basis are detailed below:
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Carrying Value
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Carrying Value
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Carrying Value
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
Assets:
 
 
 
 
 
 
 
 
 
US Treasury securities
$
7.7

 
$
7.7

 
$

 
$
8.1

 
$
8.1

 
$

 
$
8.3

 
$
8.3

 
$

Corporate equity securities
4.1

 
4.1

 

 
3.8

 
3.8

 

 
3.6

 
3.6

 

Foreign currency contracts
0.2

 

 
0.2

 
3.2

 

 
3.2

 
3.5

 

 
3.5

Commodity contracts
0.7

 

 
0.7

 

 

 

 
0.6

 

 
0.6

Interest rate swaps
1.3

 
 
 
1.3

 
0.4

 

 
0.4

 

 

 

US government agency securities
5.4

 

 
5.4

 
4.4

 

 
4.4

 
4.5

 

 
4.5

Corporate bonds and notes
11.5

 

 
11.5

 
10.9

 

 
10.9

 
11.1

 

 
11.1

Total assets
$
30.9

 
$
11.8

 
$
19.1

 
$
30.8

 
$
11.9

 
$
18.9

 
$
31.6

 
$
11.9

 
$
19.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency contracts
$
(1.3
)
 
$

 
$
(1.3
)
 
$
(0.2
)
 
$

 
$
(0.2
)
 
$
(0.1
)
 
$

 
$
(0.1
)
Commodity contracts

 

 

 
(3.4
)
 

 
(3.4
)
 
(0.7
)
 

 
(0.7
)
Interest rate swaps

 

 

 

 

 

 
(2.3
)
 

 
(2.3
)
Total liabilities
$
(1.3
)
 
$

 
$
(1.3
)
 
$
(3.6
)
 
$

 
$
(3.6
)
 
$
(3.1
)
 
$

 
$
(3.1
)
The carrying amount and fair value of outstanding debt at October 28, 2017, January 28, 2017 and October 29, 2016 were as follows:
 
October 28, 2017
 
January 28, 2017
 
October 29, 2016
(in millions)
Carrying
Value
 
Fair Value
 
Carrying
Value
 
Fair Value
 
Carrying
Value
 
Fair Value
Long-term debt:
 
 
 
 
 
 
 
 
 
 
 
Senior notes (Level 2)
$
394.3

 
$
398.8

 
$
393.7

 
$
391.2

 
$
393.4

 
$
390.5

Securitization facility (Level 2)

 

 
599.7

 
600.0

 
599.6

 
600.0

Term loan (Level 2)
330.0

 
332.9

 
345.1

 
348.6

 
349.3

 
353.0

Total
$
724.3

 
$
731.7

 
$
1,338.5

 
$
1,339.8

 
$
1,342.3

 
$
1,343.5

Loans, overdrafts and long-term debt (Tables)
Summary of Loans, Overdrafts and Long-Term Debt
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Debt:
 
 
 
 
 
Senior unsecured notes due 2024, net of unamortized discount
$
398.9

 
$
398.8

 
$
398.7

Securitization facility

 
600.0

 
600.0

Senior unsecured term loan
332.9

 
348.6

 
353.0

Revolving credit facility
256.0

 
56.0

 
259.0

Bank overdrafts
8.3

 
14.2

 
11.1

Total debt
$
996.1

 
$
1,417.6

 
$
1,621.8

Less: Current portion of loans and overdrafts
(291.8
)
 
(91.1
)
 
(288.8
)
Less: Unamortized capitalized debt issuance fees
(7.5
)
 
(8.6
)
 
(8.8
)
Total long-term debt
$
696.8

 
$
1,317.9

 
$
1,324.2

Deferred revenue (Tables)
Deferred Revenue
Deferred revenue is comprised primarily of ESP and voucher promotions and other as follows:
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Sterling Jewelers ESP deferred revenue
$
717.6

 
$
737.4

 
$
710.2

Zale ESP deferred revenue
165.2

 
168.2

 
155.2

Voucher promotions and other
33.6

 
30.3

 
23.4

Total deferred revenue
$
916.4

 
$
935.9

 
$
888.8

 
 
 
 
 
 
Disclosed as:
 
 
 
 
 
Current liabilities
$
270.3

 
$
276.9

 
$
256.7

Non-current liabilities
646.1

 
659.0

 
632.1

Total deferred revenue
$
916.4

 
$
935.9

 
$
888.8

ESP deferred revenue
 
13 weeks ended
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Sterling Jewelers ESP deferred revenue, beginning of period
$
732.7

 
$
720.3

 
$
737.4

 
$
715.1

Plans sold
47.9

 
52.8

 
176.7

 
190.4

Revenue recognized
(63.0
)
 
(62.9
)
 
(196.5
)
 
(195.3
)
Sterling Jewelers ESP deferred revenue, end of period
$
717.6

 
$
710.2

 
$
717.6

 
$
710.2

 
13 weeks ended
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Zale ESP deferred revenue, beginning of period
$
169.5

 
$
156.2

 
$
168.2

 
$
146.1

Plans sold(1)
25.0

 
28.3

 
89.6

 
100.8

Revenue recognized
(29.3
)
 
(29.3
)
 
(92.6
)
 
(91.7
)
Zale ESP deferred revenue, end of period
$
165.2

 
$
155.2

 
$
165.2

 
$
155.2


(1) 
Includes impact of foreign exchange translation.
Warranty reserve (Tables)
Other Liabilities
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
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Warranty reserve, beginning of period
$
39.3

 
$
40.4

 
$
40.0

 
$
41.9

Warranty expense
3.1

 
3.7

 
7.9

 
9.4

Utilized(1)
(3.1
)
 
(3.6
)
 
(8.6
)
 
(10.8
)
Warranty reserve, end of period
$
39.3

 
$
40.5

 
$
39.3

 
$
40.5


(1)  
Includes impact of foreign exchange translation.
(in millions)
October 28, 2017
 
January 28, 2017
 
October 29, 2016
Disclosed as:
 
 
 
 
 
Current liabilities
$
12.2

 
$
13.0

 
$
12.9

Non-current liabilities
27.1

 
27.0

 
27.6

Total warranty reserve
$
39.3

 
$
40.0

 
$
40.5

Pension plans (Tables)
Schedule of Net Benefit Costs
The components of net periodic pension benefit for the UK Plan are as follows:
 
13 weeks ended
 
39 weeks ended
(in millions)
October 28, 2017
 
October 29, 2016
 
October 28, 2017
 
October 29, 2016
Components of net periodic pension benefit:
 
 
 
 
 
 
 
Service cost
$
(0.6
)
 
$
(0.5
)
 
$
(1.6
)
 
$
(1.5
)
Interest cost
(1.6
)
 
(1.7
)
 
(4.7
)
 
(5.5
)
Expected return on UK Plan assets
2.4

 
2.5

 
7.1

 
8.0

Amortization of unrecognized actuarial losses
(0.7
)
 
(0.4
)
 
(2.2
)
 
(1.2
)
Amortization of unrecognized net prior service credits
0.4

 
0.5

 
1.3

 
1.5

Net periodic pension (expense) benefit
$
(0.1
)
 
$
0.4

 
$
(0.1
)
 
$
1.3

Net curtailment gain and settlement loss
3.7

 

 
3.7

 

Total recognized in net periodic pension benefit and OCI
$
3.6

 
$
0.4

 
$
3.6

 
$
1.3

Condensed consolidating financial information (Tables)
Condensed Consolidated Income Statement
For the 13 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Sales
$

 
$

 
$
1,067.0

 
$
89.9

 
$

 
$
1,156.9

Cost of sales

 

 
(799.9
)
 
(35.9
)
 

 
(835.8
)
Gross margin

 

 
267.1

 
54.0

 

 
321.1

Selling, general and administrative expenses
(0.6
)
 

 
(346.4
)
 
(28.9
)
 

 
(375.9
)
Credit transaction, net

 

 
(12.2
)
 

 

 
(12.2
)
Other operating income (loss), net

 

 
72.7

 
(0.2
)
 

 
72.5

Operating (loss) income
(0.6
)
 

 
(18.8
)
 
24.9

 

 
5.5

Intra-entity interest income (expense)

 
4.7

 
(47.0
)
 
42.3

 

 

Interest expense, net

 
(5.1
)
 
(7.7
)
 
(3.8
)
 

 
(16.6
)
(Loss) income before income taxes
(0.6
)
 
(0.4
)
 
(73.5
)
 
63.4

 

 
(11.1
)
Income taxes

 
0.1

 
28.3

 
(21.2
)
 

 
7.2

Equity in income of subsidiaries
(3.3
)
 

 
(71.5
)
 
(45.5
)
 
120.3

 

Net (loss) income
$
(3.9
)
 
$
(0.3
)
 
$
(116.7
)
 
$
(3.3
)
 
$
120.3

 
$
(3.9
)
Dividends on redeemable convertible preferred shares
(8.2
)
 

 

 

 

 
(8.2
)
Net (loss) income attributable to common shareholders
$
(12.1
)
 
$
(0.3
)
 
$
(116.7
)
 
$
(3.3
)
 
$
120.3

 
$
(12.1
)



Condensed Consolidated Income Statement
For the 13 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Sales
$

 
$

 
$
1,121.8

 
$
64.4

 
$

 
$
1,186.2

Cost of sales

 

 
(821.7
)
 
(14.5
)
 

 
(836.2
)
Gross margin

 

 
300.1

 
49.9

 

 
350.0

Selling, general and administrative expenses
(0.3
)
 

 
(362.0
)
 
(24.2
)
 

 
(386.5
)
Other operating income (loss), net

 

 
75.6

 
(7.0
)
 

 
68.6

Operating (loss) income
(0.3
)
 

 
13.7

 
18.7

 

 
32.1

Intra-entity interest income (expense)

 
4.7

 
(47.8
)
 
43.1

 

 

Interest expense, net

 
(5.0
)
 
(4.5
)
 
(3.2
)
 

 
(12.7
)
(Loss) income before income taxes
(0.3
)
 
(0.3
)
 
(38.6
)
 
58.6

 

 
19.4

Income taxes

 

 
15.1

 
(17.5
)
 

 
(2.4
)
Equity in income of subsidiaries
17.3

 

 
(51.9
)
 
(23.6
)
 
58.2

 

Net income (loss)
$
17.0

 
$
(0.3
)
 
$
(75.4
)
 
$
17.5

 
$
58.2

 
$
17.0

Dividends on redeemable convertible preferred shares
(2.2
)
 

 

 

 

 
(2.2
)
Net income (loss) attributable to common shareholders
$
14.8

 
$
(0.3
)
 
$
(75.4
)
 
$
17.5

 
$
58.2

 
$
14.8



Condensed Consolidated Income Statement
For the 39 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Sales
$

 
$

 
$
3,714.5

 
$
245.4

 
$

 
$
3,959.9

Cost of sales

 

 
(2,623.1
)
 
(66.6
)
 

 
(2,689.7
)
Gross margin

 

 
1,091.4

 
178.8

 

 
1,270.2

Selling, general and administrative expenses
(1.0
)
 

 
(1,144.9
)
 
(91.8
)
 

 
(1,237.7
)
Credit transaction, net

 

 
2.6

 

 

 
2.6

Other operating income (loss), net

 

 
221.6

 
(0.3
)
 

 
221.3

Operating (loss) income
(1.0
)
 

 
170.7

 
86.7

 

 
256.4

Intra-entity interest income (expense)

 
14.1

 
(138.8
)
 
124.7

 

 

Interest expense, net

 
(15.0
)
 
(16.5
)
 
(11.2
)
 

 
(42.7
)
(Loss) income before income taxes
(1.0
)
 
(0.9
)
 
15.4

 
200.2

 

 
213.7

Income taxes

 
0.2

 
(8.4
)
 
(37.5
)
 

 
(45.7
)
Equity in income of subsidiaries
169.0

 

 
(41.2
)
 
11.0

 
(138.8
)
 

Net income (loss)
$
168.0

 
$
(0.7
)
 
$
(34.2
)
 
$
173.7

 
$
(138.8
)
 
$
168.0

Dividends on redeemable convertible preferred shares
(24.6
)
 

 

 

 

 
(24.6
)
Net income (loss) attributable to common shareholders
$
143.4

 
$
(0.7
)
 
$
(34.2
)
 
$
173.7

 
$
(138.8
)
 
$
143.4




Condensed Consolidated Income Statement
For the 39 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Sales
$

 
$

 
$
3,955.0

 
$
183.5

 
$

 
$
4,138.5

Cost of sales

 

 
(2,688.0
)
 
(35.2
)
 

 
(2,723.2
)
Gross margin

 

 
1,267.0

 
148.3

 

 
1,415.3

Selling, general and administrative expenses
(0.9
)
 

 
(1,190.9
)
 
(73.1
)
 

 
(1,264.9
)
Other operating income (loss), net

 

 
227.6

 
(14.0
)
 

 
213.6

Operating (loss) income
(0.9
)
 

 
303.7

 
61.2

 

 
364.0

Intra-entity interest income (expense)

 
14.1

 
(142.2
)
 
128.1

 

 

Interest expense, net

 
(14.8
)
 
(12.1
)
 
(9.5
)
 

 
(36.4
)
(Loss) income before income taxes
(0.9
)
 
(0.7
)
 
149.4

 
179.8

 

 
327.6

Income taxes

 
0.1

 
(61.5
)
 
(20.5
)
 

 
(81.9
)
Equity in income of subsidiaries
246.6

 

 
48.8

 
93.1

 
(388.5
)
 

Net income (loss)
$
245.7

 
$
(0.6
)
 
$
136.7

 
$
252.4

 
$
(388.5
)
 
$
245.7

Dividends on redeemable convertible preferred shares
(2.2
)
 

 

 

 

 
(2.2
)
Net income (loss) attributable to common shareholders
$
243.5

 
$
(0.6
)
 
$
136.7

 
$
252.4

 
$
(388.5
)
 
$
243.5

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the 13 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net (loss) income
$
(3.9
)
 
$
(0.3
)
 
$
(116.7
)
 
$
(3.3
)
 
$
120.3

 
$
(3.9
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
(6.5
)
 

 
(6.5
)
 

 
6.5

 
(6.5
)
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized loss
(0.2
)
 

 

 
(0.2
)
 
0.2

 
(0.2
)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
0.9

 

 
0.9

 

 
(0.9
)
 
0.9

Reclassification adjustment for gains to net income
(0.6
)
 

 
(0.6
)
 

 
0.6

 
(0.6
)
Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Actuarial loss
(0.9
)
 

 
(0.9
)
 

 
0.9

 
(0.9
)
Reclassification adjustment to net income for amortization of actuarial losses
0.6

 

 
0.6

 

 
(0.6
)
 
0.6

Reclassification adjustment to net income for amortization of net prior service credits
(0.4
)
 

 
(0.4
)
 

 
0.4

 
(0.4
)
Net curtailment gain and settlement loss
(3.0
)
 

 
(3.0
)
 

 
3.0

 
(3.0
)
Total other comprehensive (loss) income
(10.1
)
 

 
(9.9
)
 
(0.2
)
 
10.1

 
(10.1
)
Total comprehensive (loss) income
$
(14.0
)
 
$
(0.3
)
 
$
(126.6
)
 
$
(3.5
)
 
$
130.4

 
$
(14.0
)


Condensed Consolidated Statement of Comprehensive Income (Loss)
For the 13 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
$
17.0

 
$
(0.3
)
 
$
(75.4
)
 
$
17.5

 
$
58.2

 
$
17.0

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
(28.9
)
 

 
(32.5
)
 
3.6

 
28.9

 
(28.9
)
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized loss
(0.2
)
 

 

 
(0.2
)
 
0.2

 
(0.2
)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
1.9

 

 
1.9

 

 
(1.9
)
 
1.9

Reclassification adjustment for losses to net income
(0.1
)
 

 
(0.1
)
 

 
0.1

 
(0.1
)
Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Reclassification adjustment to net income for amortization of actuarial losses
0.4

 

 
0.4

 

 
(0.4
)
 
0.4

Reclassification adjustment to net income for amortization of net prior service credits
(0.4
)
 

 
(0.4
)
 

 
0.4

 
(0.4
)
Total other comprehensive (loss) income
(27.3
)
 

 
(30.7
)
 
3.4

 
27.3

 
(27.3
)
Total comprehensive (loss) income
$
(10.3
)
 
$
(0.3
)
 
$
(106.1
)
 
$
20.9

 
$
85.5

 
$
(10.3
)

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the 39 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
$
168.0

 
$
(0.7
)
 
$
(34.2
)
 
$
173.7

 
$
(138.8
)
 
$
168.0

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
18.6

 

 
18.6

 

 
(18.6
)
 
18.6

Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
0.3

 

 

 
0.3

 
(0.3
)
 
0.3

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
2.7

 

 
2.7

 

 
(2.7
)
 
2.7

Reclassification adjustment for gains to net income
(3.1
)
 

 
(3.1
)
 

 
3.1

 
(3.1
)
Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Actuarial loss
(0.9
)
 

 
(0.9
)
 

 
0.9

 
(0.9
)
Reclassification adjustment to net income for amortization of actuarial losses
1.8

 

 
1.8

 

 
(1.8
)
 
1.8

Reclassification adjustment to net income for amortization of net prior service credits
(1.1
)
 

 
(1.1
)
 

 
1.1

 
(1.1
)
Net curtailment gain and settlement loss
(3.0
)
 

 
(3.0
)
 
 
 
3.0

 
(3.0
)
Total other comprehensive income
15.3

 

 
15.0

 
0.3

 
(15.3
)
 
15.3

Total comprehensive income (loss)
$
183.3

 
$
(0.7
)
 
$
(19.2
)
 
$
174.0

 
$
(154.1
)
 
$
183.3



Condensed Consolidated Statement of Comprehensive Income (Loss)
For the 39 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
$
245.7

 
$
(0.6
)
 
$
136.7

 
$
252.4

 
$
(388.5
)
 
$
245.7

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
(38.0
)
 

 
(45.2
)
 
7.2

 
38.0

 
(38.0
)
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
0.2

 

 

 
0.2

 
(0.2
)
 
0.2

Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain
8.2

 

 
8.2

 

 
(8.2
)
 
8.2

Reclassification adjustment for losses to net income
1.6

 

 
1.6

 

 
(1.6
)
 
1.6

Pension plan:
 
 
 
 
 
 
 
 
 
 
 
Reclassification adjustment to net income for amortization of actuarial losses
1.0

 

 
1.0

 

 
(1.0
)
 
1.0

Reclassification adjustment to net income for amortization of net prior service credits
(1.2
)
 

 
(1.2
)
 

 
1.2

 
(1.2
)
Total other comprehensive (loss) income
(28.2
)
 

 
(35.6
)
 
7.4

 
28.2

 
(28.2
)
Total comprehensive income (loss)
$
217.5

 
$
(0.6
)
 
$
101.1

 
$
259.8

 
$
(360.3
)
 
$
217.5

Condensed Consolidated Balance Sheet
October 28, 2017
(Unaudited)
(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
0.4

 
$
0.1

 
$
59.1

 
$
53.8

 
$

 
$
113.4

Accounts receivable, net

 

 
638.7

 
1.4

 

 
640.1

Intra-entity receivables, net
85.6

 
7.6

 

 
262.1

 
(355.3
)
 

Other receivables

 

 
55.6

 
24.7

 

 
80.3

Other current assets

 

 
140.0

 
5.0

 

 
145.0

Income taxes

 

 
17.3

 

 

 
17.3

Inventories

 

 
2,392.6

 
73.5

 

 
2,466.1

Total current assets
86.0

 
7.7

 
3,303.3

 
420.5

 
(355.3
)
 
3,462.2

Non-current assets:
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net

 

 
847.5

 
7.6

 

 
855.1

Goodwill

 

 
515.0

 
352.1

 

 
867.1

Intangible assets, net

 

 
410.4

 

 

 
410.4

Investment in subsidiaries
2,693.7

 

 
834.5

 
346.2

 
(3,874.4
)
 

Intra-entity receivables, net

 
400.0

 

 
2,835.0

 
(3,235.0
)
 

Other assets

 

 
136.9

 
32.2

 

 
169.1

Deferred tax assets

 

 
1.2

 
0.1

 

 
1.3

Retirement benefit asset

 

 
35.5

 

 

 
35.5

Total assets
$
2,779.7

 
$
407.7

 
$
6,084.3

 
$
3,993.7

 
$
(7,464.7
)
 
$
5,800.7

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

 
$
(0.7
)
 
$
292.5

 
$

 
$

 
$
291.8

Accounts payable

 

 
291.0

 
33.9

 

 
324.9

Intra-entity payables, net

 

 
355.3

 

 
(355.3
)
 

Accrued expenses and other current liabilities
27.6

 
7.1

 
372.1

 
23.7

 

 
430.5

Deferred revenue

 

 
259.6

 
10.7

 

 
270.3

Income taxes

 
(0.2
)
 
(24.3
)
 
24.5

 

 

Total current liabilities
27.6

 
6.2

 
1,546.2

 
92.8

 
(355.3
)
 
1,317.5

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
395.0

 
301.8

 

 

 
696.8

Intra-entity payables, net

 

 
3,235.0

 

 
(3,235.0
)
 

Other liabilities

 

 
238.8

 
5.6

 

 
244.4

Deferred revenue

 

 
646.1

 

 

 
646.1

Deferred tax liabilities

 

 
143.6

 
0.2

 

 
143.8

Total liabilities
27.6

 
401.2

 
6,111.5

 
98.6

 
(3,590.3
)
 
3,048.6

Series A redeemable convertible preferred shares
613.1

 

 

 

 

 
613.1

Total shareholders’ equity (deficit)
2,139.0

 
6.5

 
(27.2
)
 
3,895.1

 
(3,874.4
)
 
2,139.0

Total liabilities, preferred shares and shareholders’ equity
$
2,779.7

 
$
407.7

 
$
6,084.3

 
$
3,993.7

 
$
(7,464.7
)
 
$
5,800.7

Condensed Consolidated Balance Sheet
January 28, 2017

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1.7

 
$
0.1

 
$
70.3

 
$
26.6

 
$

 
$
98.7

Accounts receivable, net

 

 
1,858.0

 

 

 
1,858.0

Intra-entity receivables, net
12.7

 

 
145.1

 

 
(157.8
)
 

Other receivables

 

 
71.1

 
24.8

 

 
95.9

Other current assets

 

 
131.4

 
4.9

 

 
136.3

Income taxes

 

 
4.4

 

 

 
4.4

Inventories

 

 
2,371.8

 
77.5

 

 
2,449.3

Total current assets
14.4

 
0.1

 
4,652.1

 
133.8

 
(157.8
)
 
4,642.6

Non-current assets:
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net

 

 
818.5

 
4.4

 

 
822.9

Goodwill

 

 
514.0

 
3.6

 

 
517.6

Intangible assets, net

 

 
417.0

 

 

 
417.0

Investment in subsidiaries
3,117.6

 

 
721.6

 
590.9

 
(4,430.1
)
 

Intra-entity receivables, net

 
402.9

 

 
3,647.1

 
(4,050.0
)
 

Other assets

 

 
134.8

 
30.3

 

 
165.1

Deferred tax assets

 

 
0.6

 
0.1

 

 
0.7

Retirement benefit asset

 

 
31.9

 

 

 
31.9

Total assets
$
3,132.0

 
$
403.0

 
$
7,290.5

 
$
4,410.2

 
$
(8,637.9
)
 
$
6,597.8

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

 
$
(0.7
)
 
$
91.8

 
$

 
$

 
$
91.1

Accounts payable

 

 
248.2

 
7.5

 

 
255.7

Intra-entity payables, net

 

 

 
157.8

 
(157.8
)
 

Accrued expenses and other current liabilities
29.9

 
2.5

 
429.2

 
16.6

 

 
478.2

Deferred revenue

 

 
275.5

 
1.4

 

 
276.9

Income taxes

 
(0.2
)
 
115.5

 
(13.5
)
 

 
101.8

Total current liabilities
29.9

 
1.6

 
1,160.2

 
169.8

 
(157.8
)
 
1,203.7

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
394.3

 
323.6

 
600.0

 

 
1,317.9

Intra-entity payables, net

 

 
4,050.0

 

 
(4,050.0
)
 

Other liabilities

 

 
208.7

 
5.0

 

 
213.7

Deferred revenue

 

 
659.0

 

 

 
659.0

Deferred tax liabilities

 

 
101.4

 

 

 
101.4

Total liabilities
29.9

 
395.9

 
6,502.9

 
774.8

 
(4,207.8
)
 
3,495.7

Series A redeemable convertible preferred shares
611.9

 

 

 

 

 
611.9

Total shareholders’ equity
2,490.2

 
7.1

 
787.6

 
3,635.4

 
(4,430.1
)
 
2,490.2

Total liabilities, preferred shares and shareholders’ equity
$
3,132.0

 
$
403.0

 
$
7,290.5

 
$
4,410.2

 
$
(8,637.9
)
 
$
6,597.8



Condensed Consolidated Balance Sheet
October 29, 2016
(Unaudited)
(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
0.2

 
$
0.1

 
$
55.7

 
$
26.7

 
$

 
$
82.7

Accounts receivable, net

 

 
1,581.1

 

 

 
1,581.1

Intra-entity receivables, net
50.4

 

 

 
278.9

 
(329.3
)
 

Other receivables

 

 
52.0

 
22.2

 

 
74.2

Other current assets

 

 
140.3

 
6.5

 

 
146.8

Income taxes

 
0.1

 
35.6

 
(14.9
)
 

 
20.8

Inventories

 

 
2,578.3

 
71.1

 

 
2,649.4

Total current assets
50.6

 
0.2

 
4,443.0

 
390.5

 
(329.3
)
 
4,555.0

Non-current assets:
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net

 

 
786.4

 
4.7

 

 
791.1

Goodwill

 

 
513.4

 
3.6

 

 
517.0

Intangible assets, net

 

 
419.8

 

 

 
419.8

Investment in subsidiaries
2,812.5

 

 
586.7

 
474.4

 
(3,873.6
)
 

Intra-entity receivables, net

 
407.6

 

 
3,647.4

 
(4,055.0
)
 

Other assets

 

 
126.2

 
31.3

 

 
157.5

Deferred tax assets

 

 

 

 

 

Retirement benefit asset

 

 
47.1

 

 

 
47.1

Total assets
$
2,863.1

 
$
407.8

 
$
6,922.6

 
$
4,551.9

 
$
(8,257.9
)
 
$
6,487.5

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

 
$
(0.7
)
 
$
289.5

 
$

 
$

 
$
288.8

Accounts payable

 

 
376.4

 
5.8

 

 
382.2

Intra-entity payables, net

 

 
329.3

 

 
(329.3
)
 

Accrued expenses and other current liabilities
20.2

 
7.1

 
360.1

 
15.5

 

 
402.9

Deferred revenue

 

 
256.7

 

 

 
256.7

Income taxes

 

 
3.9

 
0.5

 

 
4.4

Total current liabilities
20.2

 
6.4

 
1,615.9

 
21.8

 
(329.3
)
 
1,335.0

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
394.1

 
330.1

 
600.0

 

 
1,324.2

Intra-entity payables, net

 

 
4,055.0

 

 
(4,055.0
)
 

Other liabilities

 

 
213.7

 
6.2

 

 
219.9

Deferred revenue

 

 
632.1

 

 

 
632.1

Deferred tax liabilities

 

 
133.5

 
(0.1
)
 

 
133.4

Total liabilities
20.2

 
400.5

 
6,980.3

 
627.9

 
(4,384.3
)
 
3,644.6

Series A redeemable convertible preferred shares
611.7

 

 

 

 

 
611.7

Total shareholders’ equity (deficit)
2,231.2

 
7.3

 
(57.7
)
 
3,924.0

 
(3,873.6
)
 
2,231.2

Total liabilities, preferred shares and shareholders’ equity
$
2,863.1

 
$
407.8

 
$
6,922.6

 
$
4,551.9

 
$
(8,257.9
)
 
$
6,487.5

Condensed Consolidated Statement of Cash Flows
For the 39 weeks ended October 28, 2017
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash provided by operating activities
$
617.1

 
$
4.6

 
$
1,467.2

 
$
511.4

 
$
(1,118.0
)
 
$
1,482.3

Investing activities
 
 
 
 
 
 
 
 
 
 
 
Purchase of property, plant and equipment

 

 
(165.7
)
 
(0.4
)
 

 
(166.1
)
Purchase of available-for-sale securities

 

 

 
(1.7
)
 

 
(1.7
)
Proceeds from available-for-sale securities

 

 

 
0.9

 

 
0.9

Acquisition of R2Net Inc., net of cash acquired

 

 
(332.4
)
 

 

 
(332.4
)
Net cash used in investing activities

 

 
(498.1
)
 
(1.2
)
 

 
(499.3
)
Financing activities
 
 
 
 
 
 
 
 
 
 
 
Dividends paid on common shares
(57.7
)
 

 

 

 

 
(57.7
)
Dividends paid on redeemable convertible preferred shares
(26.9
)
 

 

 

 

 
(26.9
)
Intra-entity dividends paid

 

 
(800.0
)
 
(318.0
)
 
1,118.0

 

Proceeds from term and bridge loans

 

 
350.0

 

 

 
350.0

Repayments of term and bridge loans

 

 
(365.7
)
 

 

 
(365.7
)
Proceeds from securitization facility

 

 

 
1,745.9

 

 
1,745.9

Repayments of securitization facility

 

 

 
(2,345.9
)
 

 
(2,345.9
)
Proceeds from revolving credit facility

 

 
605.0

 

 

 
605.0

Repayments of revolving credit facility

 

 
(405.0
)
 

 

 
(405.0
)
Repurchase of common shares
(460.0
)
 

 

 

 

 
(460.0
)
Repayments of bank overdrafts

 

 
(5.9
)
 

 

 
(5.9
)
Other financing activities
(3.1
)
 

 
(1.4
)
 

 

 
(4.5
)
Intra-entity activity, net
(70.7
)
 
(4.6
)
 
(359.7
)
 
435.0

 

 

Net cash used in financing activities
(618.4
)
 
(4.6
)
 
(982.7
)
 
(483.0
)
 
1,118.0

 
(970.7
)
Cash and cash equivalents at beginning of period
1.7

 
0.1

 
70.3

 
26.6

 

 
98.7

(Decrease) increase in cash and cash equivalents
(1.3
)
 

 
(13.6
)
 
27.2

 

 
12.3

Effect of exchange rate changes on cash and cash equivalents

 

 
2.4

 

 

 
2.4

Cash and cash equivalents at end of period
$
0.4

 
$
0.1

 
$
59.1

 
$
53.8

 
$

 
$
113.4


Condensed Consolidated Statement of Cash Flows
For the 39 weeks ended October 29, 2016
(Unaudited)

(in millions)
Signet
Jewelers
Limited
 
Signet UK
Finance plc
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash provided by operating activities
$
558.7

 
$
4.9

 
$
385.1

 
$
391.4

 
$
(979.2
)
 
$
360.9

Investing activities
 
 
 
 
 
 
 
 
 
 
 
Purchase of property, plant and equipment

 

 
(195.6
)
 

 

 
(195.6
)
Investment in subsidiaries
(91.0
)
 

 

 

 
91.0

 

Purchase of available-for-sale securities

 

 

 
(10.4
)
 

 
(10.4
)
Proceeds from available-for-sale securities

 

 

 
10.0

 

 
10.0

Net cash used in investing activities
(91.0
)
 

 
(195.6
)
 
(0.4
)
 
91.0

 
(196.0
)
Financing activities
 
 
 
 
 
 
 
 
 
 
 
Dividends paid on common shares
(57.5
)
 

 

 

 

 
(57.5
)
Dividends paid on redeemable convertible preferred shares

 

 

 

 

 

Intra-entity dividends paid

 

 
(650.0
)
 
(329.2
)
 
979.2

 

Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
611.6

 

 

 

 

 
611.6

Repayments of term loan

 

 
(12.0
)
 

 

 
(12.0
)
Proceeds from securitization facility

 

 

 
1,837.1

 

 
1,837.1

Repayments of securitization facility

 

 

 
(1,837.1
)
 

 
(1,837.1
)
Proceeds from revolving credit facility

 

 
598.0

 

 

 
598.0

Repayments of revolving credit facility

 

 
(339.0
)
 

 

 
(339.0
)
Repurchase of common shares
(1,000.0
)
 

 

 

 

 
(1,000.0
)
Repayments of bank overdrafts

 

 
(13.3
)
 

 

 
(13.3
)
Other financing activities
(4.4
)
 

 
90.0

 
(0.6
)
 
(91.0
)
 
(6.0
)
Intra-entity activity, net
(19.1
)
 
(4.9
)
 
91.6

 
(67.6
)
 

 

Net cash used in financing activities
(469.4
)
 
(4.9
)
 
(234.7
)
 
(397.4
)
 
888.2

 
(218.2
)
Cash and cash equivalents at beginning of period
1.9

 
0.1

 
102.0

 
33.7

 

 
137.7

(Decrease) increase in cash and cash equivalents
(1.7
)
 

 
(45.2
)
 
(6.4
)
 

 
(53.3
)
Effect of exchange rate changes on cash and cash equivalents

 

 
(1.1
)
 
(0.6
)
 

 
(1.7
)
Cash and cash equivalents at end of period
$
0.2

 
$
0.1

 
$
55.7

 
$
26.7

 
$

 
$
82.7

Organization and principal accounting policies - Additional information (Details)
9 Months Ended
Oct. 28, 2017
segment
Property, Plant and Equipment [Line Items]
 
Number of reportable segments
Seasonal revenues, first quarter sales, percent
20.00% 
Seasonal revenues, second quarter sales, percent
20.00% 
Seasonal revenues, third quarter sales, percent
20.00% 
Seasonal revenues, fourth quarter sales, percent
40.00% 
UK Jewelry and Zales Jewelry |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Operating income expected in fourth quarter, Percent
45.00% 
UK Jewelry and Zales Jewelry |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Operating income expected in fourth quarter, Percent
55.00% 
Sterling Jewelers |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Operating income expected in fourth quarter, Percent
40.00% 
Sterling Jewelers |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Operating income expected in fourth quarter, Percent
45.00% 
Credit transaction, net - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 1 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Securitization Facility
Oct. 28, 2017
Securitization Facility
Oct. 28, 2017
Consumer Portfolio Segment
Oct. 29, 2016
Consumer Portfolio Segment
Oct. 28, 2017
Sterling Jewelers, Inc.
Consumer Portfolio Segment
Oct. 28, 2017
Genesis Financial Solution
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
Reversal of allowance on receivables previously held for sale
 
 
$ (30.9)
$ 0 
 
 
$ 20.7 
$ 0 
 
 
Net proceeds
 
 
 
 
 
 
 
 
960.2 
 
Beneficial interest asset
 
 
 
 
 
 
 
 
10.2 
 
Credit transaction, net
(12.2)
2.6 
 
(28.3)
 
 
 
 
Repayments of secured debt
 
 
 
 
$ 600.0 
 
 
 
 
 
Initial credit term (years)
 
 
 
7 years 
 
 
 
 
 
 
Credit renewal term (years)
 
 
 
2 years 
 
 
 
 
 
 
Servicing agreement, term (years)
 
 
 
 
 
 
 
 
 
5 years 
Acquisition - Additional Information (Detail) (R2Net Inc., USD $)
In Millions, unless otherwise specified
0 Months Ended 9 Months Ended
Sep. 12, 2017
Oct. 28, 2017
Sep. 12, 2017
Business Acquisition [Line Items]
 
 
 
Base-line purchase price
$ 332.4 
 
 
Cash and cash equivalents
 
 
47.3 
Acquisition related costs
 
9.4 
 
Bridge Loan
 
 
 
Business Acquisition [Line Items]
 
 
 
Total consideration transferred
$ 350 
 
 
Acquisition - Assets Acquired and Liabilities Assumed (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Jan. 30, 2016
Sep. 12, 2017
R2Net Inc.
Business Acquisition [Line Items]
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
$ 47.3 
Inventories
 
 
 
 
12.1 
Other current assets
 
 
 
 
9.7 
Property, plant and equipment
 
 
 
 
3.5 
Current liabilities
 
 
 
 
(41.4)
Fair value of net assets acquired
 
 
 
 
31.2 
Goodwill
867.1 
517.6 
517.0 
515.5 
348.5 
Total consideration transferred
 
 
 
 
$ 379.7 
Segment information - Additional Information (Details)
9 Months Ended
Oct. 28, 2017
segment
province
state
Segment Reporting [Abstract]
 
Number of reportable segments
Number of states in which entity operates
50 
Number of provinces in which entity operates
Segment information - Summary of Activity by Segment (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Jan. 28, 2017
Segment Reporting Information [Line Items]
 
 
 
 
 
Sales
$ 1,156.9 
$ 1,186.2 
$ 3,959.9 
$ 4,138.5 
 
Operating income (loss)
5.5 
32.1 
256.4 
364.0 
 
Reversal of allowance on receivables previously held for sale
 
 
(30.9)
 
Total assets
5,800.7 
6,487.5 
5,800.7 
6,487.5 
6,597.8 
Sterling Jewelers
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Sales
698.7 
712.5 
2,437.8 
2,532.3 
 
Operating income (loss)
73.7 
78.6 
362.6 
417.8 
 
Total assets
3,260.0 
3,715.6 
3,260.0 
3,715.6 
4,015.4 
Zale Jewelry
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Sales
268.2 
282.4 
933.7 
994.8 
 
Operating income (loss)
(15.7)
(19.3)
(12.4)
(0.5)
 
Total assets
1,885.0 
2,061.7 
1,885.0 
2,061.7 
1,940.7 
Piercing Pagoda
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Sales
55.4 
53.4 
187.4 
179.4 
 
Operating income (loss)
(4.2)
(5.4)
2.2 
 
Total assets
139.8 
136.1 
139.8 
136.1 
141.6 
UK Jewelry
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Sales
128.4 
130.3 
382.8 
419.5 
 
Operating income (loss)
(1.7)
(1.9)
3.0 
 
Total assets
404.8 
407.1 
404.8 
407.1 
372.6 
Other
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Sales
6.2 
7.6 
18.2 
12.5 
 
Operating income (loss)
(46.6)
(21.8)
(91.9)
(58.5)
 
Total assets
111.1 
167.0 
111.1 
167.0 
127.5 
Consumer Portfolio Segment
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Reversal of allowance on receivables previously held for sale
 
 
20.7 
 
Consumer Portfolio Segment |
Sterling Jewelers
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Reversal of allowance on receivables previously held for sale
10.2 
 
20.7 
 
 
Consumer Portfolio Segment |
Other
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Transaction costs
(22.4)
 
(28.3)
 
 
R2Net Inc.
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Acquisition related costs
 
 
9.4 
 
 
R2Net Inc. |
Other
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Acquisition related costs
8.1 
 
 
 
 
Chief Executive Officer |
Other
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Transition costs
 
 
$ 3.4 
 
 
Redeemable preferred shares - Additional Information (Details) (USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended 3 Months Ended 9 Months Ended
Oct. 5, 2016
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Jan. 28, 2017
Oct. 5, 2016
Temporary Equity [Line Items]
 
 
 
 
 
 
 
Accretion on redeemable convertible preferred shares
 
 
 
$ 24.6 
$ 0.1 
 
 
Series A Redeemable Convertible Preferred Stock
 
 
 
 
 
 
 
Temporary Equity [Line Items]
 
 
 
 
 
 
 
Redeemable convertible preferred stock, shares issued
625,000 
 
 
 
 
 
 
Preferred stock, purchase price
625.0 
 
 
 
 
 
 
Shares issued, price per share
 
 
 
 
 
 
$ 1,000 
Preferred stock, dividend rate, percentage
 
 
 
5.00% 
 
 
 
Payments of stock issuance costs
13.7 
 
 
 
 
 
 
Accumulated accretion of dividends
 
1.8 
0.1 
1.8 
0.1 
0.6 
 
Accretion on redeemable convertible preferred shares
 
$ 0.4 
$ 0.1 
$ 1.2 
$ 0.1 
 
 
Redeemable preferred shares - Redeemable Preferred Shares (Details) (Series A Redeemable Convertible Preferred Stock, USD $)
In Millions, except Per Share data, unless otherwise specified
0 Months Ended
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Series A Redeemable Convertible Preferred Stock
 
 
 
 
 
 
Temporary Equity [Line Items]
 
 
 
 
 
 
Conversion ratio
10.7707 
10.6529 
10.6529 
 
 
 
Conversion price (USD per share)
$ 92.8445 
$ 93.8712 
$ 93.8712 
 
 
 
Conversion of stock, shares issued
 
 
 
6.7 
6.7 
6.7 
Liquidation preference
 
 
 
$ 632.8 
$ 636.3 
$ 627.1 
Shareholders' equity - Additional Information (Detail) (USD $)
1 Months Ended
Aug. 31, 2016
2016 Program
Oct. 28, 2017
2016 Program
Feb. 29, 2016
2016 Program
Oct. 28, 2017
2017 Program
Jun. 30, 2017
2017 Program
Class of Stock [Line Items]
 
 
 
 
 
Amount authorized
$ 1,375,000,000 
$ 1,375,000,000 
$ 750,000,000 
$ 650,600,000 
$ 600,000,000 
Increase in authorized share repurchase program amount
$ 625,000,000 
 
 
 
 
Shareholders' equity - Share Repurchase (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Aug. 31, 2016
Feb. 29, 2016
Class of Stock [Line Items]
 
 
 
 
Shares repurchased (shares)
8.1 
9.9 
 
 
Amount repurchased
$ 460,000,000 
$ 842,500,000 
 
 
Average repurchase price per share (usd per share)
$ 56.91 
$ 85.00 
 
 
2016 Program
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
Amount authorized
1,375,000,000 
 
1,375,000,000 
750,000,000 
Shares repurchased (shares)
8.1 
8.7 
 
 
Amount repurchased
460,000,000 
706,900,000 
 
 
Average repurchase price per share (usd per share)
$ 56.91 
$ 81.32 
 
 
Remaining authorized repurchase amount
50,600,000 
 
 
 
2013 Program
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
Amount authorized
 
350,000,000 
 
 
Shares repurchased (shares)
 
1.2 
 
 
Amount repurchased
 
$ 135,600,000 
 
 
Average repurchase price per share (usd per share)
 
$ 111.26 
 
 
Shareholders' equity - Dividends (Details) (USD $)
3 Months Ended 9 Months Ended
Oct. 28, 2017
Jul. 29, 2017
Apr. 29, 2017
Oct. 29, 2016
Jul. 30, 2016
Apr. 30, 2016
Oct. 28, 2017
Oct. 29, 2016
Dividends Payable [Line Items]
 
 
 
 
 
 
 
 
Dividends declared per share (usd per share)
$ 0.31 
$ 0.31 
$ 0.31 
$ 0.26000000 
$ 0.26 
$ 0.26 
$ 0.93 
$ 0.78000000 
Dividends, common stock
$ 18,700,000 
$ 18,700,000 
$ 21,300,000 
$ 18,100,000 
$ 19,700,000 
$ 20,400,000 
$ 58,700,000 
$ 58,200,000 
Cash dividends declared
 
 
2,100,000 
 
 
 
Dividends on redeemable convertible preferred shares
 
 
 
 
 
 
24,600,000 
100,000 
Series A Redeemable Convertible Preferred Stock
 
 
 
 
 
 
 
 
Dividends Payable [Line Items]
 
 
 
 
 
 
 
 
Cash dividends declared
7,800,000 
7,800,000 
7,800,000 
23,400,000 
Dividends on redeemable convertible preferred shares
400,000 
 
 
100,000 
 
 
1,200,000 
100,000 
Accrued Expenses
 
 
 
 
 
 
 
 
Dividends Payable [Line Items]
 
 
 
 
 
 
 
 
Cash dividends declared
 
 
 
 
 
 
7,800,000 
 
Other Liabilities
 
 
 
 
 
 
 
 
Dividends Payable [Line Items]
 
 
 
 
 
 
 
 
Cash dividends declared
 
 
 
 
 
 
 
$ 2,100,000 
Earnings (loss) per common share (“EPS”) - Schedule of Earnings per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Earnings Per Share [Abstract]
 
 
 
 
Net income attributable to common shareholders
$ (12.1)
$ 14.8 
$ 143.4 
$ 243.5 
Dividends on preferred shares
 
 
Net income
$ (12.1)
$ 14.8 
$ 143.4 
$ 243.5 
Basic weighted average number of shares outstanding (shares)
60.1 
73.5 
64.0 
76.4 
Dilutive effect of share awards (shares)
0.1 
0.1 
0.1 
Diluted weighted average number of shares outstanding (shares)
60.1 
73.6 
64.1 
76.5 
Earnings per common share - basic (usd per share)
$ (0.20)
$ 0.20 
$ 2.24 
$ 3.19 
Earnings per common share - diluted (usd per share)
$ (0.20)
$ 0.20 
$ 2.24 
$ 3.18 
Earnings (loss) per common share (“EPS”) - Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share (Details)
In Millions, unless otherwise specified
9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Anti-dilutive shares excluded from the calculation of earnings per share (shares)
7.0 
7.0 
Share awards
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Anti-dilutive shares excluded from the calculation of earnings per share (shares)
0.3 
0.3 
Potential impact of preferred shares
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Anti-dilutive shares excluded from the calculation of earnings per share (shares)
6.7 
6.7 
Accumulated other comprehensive income (loss) - Changes in Accumulated OCI by Component and Reclassifications Out of Accumulated OCI (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 9 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Foreign currency translation
Oct. 28, 2017
Losses on available-for-sale securities, net
Oct. 28, 2017
Gains (losses) on cash flow hedges
Oct. 28, 2017
Accumulated other comprehensive loss
Jan. 28, 2017
Accumulated other comprehensive loss
Oct. 28, 2017
Pension Plan
Actuarial losses
Oct. 28, 2017
Pension Plan
Prior service credits
AOCI Attributable to Parent, Net of Tax [Roll Forward]
 
 
 
 
 
 
 
 
 
Beginning Balance
$ 2,490.2 
$ 2,231.2 
$ (263.4)
$ (0.4)
$ 2.4 
$ (292.4)
$ (307.7)
$ (55.5)
$ 9.2 
Other comprehensive income (“OCI”) before reclassifications
20.7 
 
18.6 
0.3 
2.7 
 
 
(0.9)
Amounts reclassified from AOCI to net income
(5.4)
 
(3.1)
 
 
4.0 
(6.3)
Total other comprehensive (loss) income
15.3 
 
18.6 
0.3 
(0.4)
 
 
3.1 
(6.3)
Ending Balance
$ 2,139.0 
$ 2,231.2 
$ (244.8)
$ (0.1)
$ 2.0 
$ (292.4)
$ (307.7)
$ (52.4)
$ 2.9 
Accumulated other comprehensive income (loss) - Reclassifications out of AOCI (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Cost of sales reclassification adjustment
$ 835.8 
$ 836.2 
$ 2,689.7 
$ 2,723.2 
Interest expense reclassification adjustment
16.6 
12.7 
42.7 
36.4 
Income before income taxes
11.1 
(19.4)
(213.7)
(327.6)
Income taxes
(7.2)
2.4 
45.7 
81.9 
Net income
3.9 
(17.0)
(168.0)
(245.7)
Curtailment gain and settlement loss, net
(3.7)1
1
(3.7)1
1
Amounts reclassified from AOCI
(3.4)
(0.1)
(5.4)
1.4 
Gains (losses) on cash flow hedges |
Reclassification out of Accumulated Other Comprehensive Income
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Income before income taxes
(0.8)
(0.2)
(4.1)
2.4 
Income taxes
0.2 
0.1 
1.0 
(0.8)
Net income
(0.6)
(0.1)
(3.1)
1.6 
Gains (losses) on cash flow hedges |
Reclassification out of Accumulated Other Comprehensive Income |
Foreign currency contracts
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Cost of sales reclassification adjustment
(0.8)
(0.4)
(3.0)
(1.0)
Gains (losses) on cash flow hedges |
Reclassification out of Accumulated Other Comprehensive Income |
Interest rate swaps
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Interest expense reclassification adjustment
0.5 
0.4 
1.7 
Gains (losses) on cash flow hedges |
Reclassification out of Accumulated Other Comprehensive Income |
Commodity contracts
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Cost of sales reclassification adjustment
(0.3)
(1.5)
1.7 
Actuarial losses
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Reclassification adjustment from AOCI, pension and other postretirement benefit plans, before tax
0.7 1
0.4 1
2.2 1
1.2 1
Prior service credits
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Reclassification adjustment from AOCI, pension and other postretirement benefit plans, before tax
(0.4)1
(0.5)1
(1.3)1
(1.5)1
Accumulated Defined Benefit Plans Adjustment Attributable to Parent
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Reclassification adjustment from AOCI, pension and other postretirement benefit plans, before tax
(3.4)
(0.1)
(2.8)
(0.3)
Reclassification adjustment from AOCI, pension and other postretirement benefit plans, tax
0.6 
0.1 
0.5 
0.1 
Amounts reclassified from AOCI
$ (2.8)
$ 0 
$ (2.3)
$ (0.2)
Income taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details)
9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Income Tax Disclosure [Abstract]
 
 
Forecasted annual effective tax rate
21.20% 
25.00% 
Discrete items recognized
0.20% 
0.00% 
Effective tax rate recognized in income statement
21.40% 
25.00% 
Accounts receivable, net - Portfolio of Accounts Receivable (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Accounts receivable, net
$ 640.1 
$ 1,858.0 
$ 1,581.1 
Consumer Portfolio Segment
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Accounts receivable, net
597.7 
 
1,546.3 
Other Accounts Receivable
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Accounts receivable, net
10.1 
11.3 
8.4 
Sterling Jewelers |
Consumer Portfolio Segment
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Accounts receivable, net
597.7 
1,813.3 
1,546.3 
Zale Jewelry |
Consumer Portfolio Segment
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Accounts receivable, net
$ 32.3 
$ 33.4 
$ 26.4 
Accounts receivable, net - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Accounts receivable, net
$ 640.1 
$ 1,858.0 
$ 1,581.1 
Other Accounts Receivable
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Accounts receivable, net
10.1 
11.3 
8.4 
United Kingdom |
Other Accounts Receivable
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Accounts receivable, net
$ 6.7 
$ 11.0 
$ 7.7 
Accounts receivable, net - Allowance for Credit Losses (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
Beginning balance
$ 138.7 
 
$ 108.8 
 
$ 133.0 
Reversal of allowance on receivables previously held for sale
(30.9)
 
 
 
Ending receivable balance evaluated for impairment
706.5 
1,679.3 
 
1,952.0 
 
Sterling Jewelers customer in-house finance receivables, net
640.1 
1,581.1 
 
1,858.0 
 
Consumer Portfolio Segment
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
Beginning balance
138.7 
130.0 
 
 
 
Charge-offs, net
160.9 
143.1 
 
 
 
Recoveries
30.1 
26.8 
 
 
 
Provision
(181.8)
(172.9)
 
 
 
Reversal of allowance on receivables previously held for sale
20.7 
 
 
 
Ending balance
108.8 
133.0 
 
 
 
Ending receivable balance evaluated for impairment
706.5 
1,679.3 
 
 
 
Sterling Jewelers customer in-house finance receivables, net
$ 597.7 
$ 1,546.3 
 
 
 
Accounts receivable, net - Credit Quality Indicator and Age Analysis (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Gross
$ 706.5 
$ 1,952.0 
$ 1,679.3 
Valuation allowance
(108.8)
(138.7)
(133.0)
Gross
100.00% 
100.00% 
100.00% 
Valuation allowance
15.40% 
7.10% 
7.90% 
Current, aged 0 – 30 days |
Performing Financing Receivable
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Gross
586.5 
1,538.2 
1,294.9 
Valuation allowance
(50.3)
(47.2)
(39.3)
Gross
83.00% 
78.80% 
77.20% 
Valuation allowance
8.60% 
3.10% 
3.00% 
Past due, aged 31 – 60 days |
Performing Financing Receivable
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Gross
40.3 
282.0 
250.6 
Valuation allowance
(3.5)
(9.0)
(8.1)
Gross
5.70% 
14.50% 
14.90% 
Valuation allowance
8.70% 
3.20% 
3.20% 
Past due, aged 61 – 90 days |
Performing Financing Receivable
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Gross
27.1 
51.6 
50.7 
Valuation allowance
(2.4)
(2.3)
(2.5)
Gross
3.80% 
2.60% 
3.00% 
Valuation allowance
8.90% 
4.50% 
4.90% 
Past due, aged more than 90 days |
Nonperforming Financing Receivable
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Gross
52.6 
80.2 
83.1 
Valuation allowance
$ (52.6)
$ (80.2)
$ (83.1)
Gross
7.50% 
4.10% 
4.90% 
Valuation allowance
100.00% 
100.00% 
100.00% 
Inventories - Summary of Inventory Components (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Inventory Disclosure [Abstract]
 
 
 
Raw materials
$ 68.2 
$ 60.8 
$ 71.2 
Finished goods
2,397.9 
2,388.5 
2,578.2 
Total inventories
$ 2,466.1 
$ 2,449.3 
$ 2,649.4 
Goodwill and intangibles - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 0 Months Ended
Oct. 28, 2017
Sep. 12, 2017
R2Net Inc.
Finite-Lived Intangible Assets [Line Items]
 
 
Goodwilll, acquired during period
$ 348.5 
$ 348.5 
Goodwill and intangibles - Summary of Goodwill (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Goodwill [Roll Forward]
 
 
 
Beginning Balance
$ 517.6 
$ 515.5 
$ 517.0 
Impact of foreign exchange
1.0 
2.1 
 
Acquisitions
348.5 
 
 
Ending Balance
867.1 
517.6 
517.0 
Sterling Jewelers
 
 
 
Goodwill [Roll Forward]
 
 
 
Beginning Balance
23.2 
23.2 
 
Impact of foreign exchange
 
Ending Balance
371.7 
23.2 
 
Zale Jewelry
 
 
 
Goodwill [Roll Forward]
 
 
 
Beginning Balance
490.8 
488.7 
 
Impact of foreign exchange
1.0 
2.1 
 
Acquisitions
 
 
Ending Balance
491.8 
490.8 
 
Piercing Pagoda
 
 
 
Goodwill [Roll Forward]
 
 
 
Beginning Balance
 
Impact of foreign exchange
 
Acquisitions
 
 
Ending Balance
 
UK Jewelry
 
 
 
Goodwill [Roll Forward]
 
 
 
Beginning Balance
 
Impact of foreign exchange
 
Acquisitions
 
 
Ending Balance
 
Other
 
 
 
Goodwill [Roll Forward]
 
 
 
Beginning Balance
3.6 
3.6 
 
Impact of foreign exchange
 
Acquisitions
 
 
Ending Balance
$ 3.6 
$ 3.6 
 
Goodwill and intangibles - Composition of Finite-Lived Intangibles (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Definite-lived intangible assets:
 
 
 
Gross carrying amount
$ 49.4 
$ 49.0 
$ 48.9 
Accumulated amortization
(45.1)
(36.8)
(33.3)
Net carrying amount
4.3 
12.2 
15.6 
Intangible assets, gross
455.5 
453.8 
453.1 
Total intangible assets, net
410.4 
417.0 
419.8 
Definite-lived intangible liabilities:
 
 
 
Gross carrying amount
(114.1)
(113.9)
(113.7)
Accumulated amortization
83.0 
71.7 
66.8 
Total
(31.1)
(42.2)
(46.9)
Unfavorable leases
 
 
 
Definite-lived intangible liabilities:
 
 
 
Gross carrying amount
(48.5)
(48.3)
(48.1)
Accumulated amortization
45.4 
38.2 
34.7 
Total
(3.1)
(10.1)
(13.4)
Unfavorable contracts
 
 
 
Definite-lived intangible liabilities:
 
 
 
Gross carrying amount
(65.6)
(65.6)
(65.6)
Accumulated amortization
37.6 
33.5 
32.1 
Total
(28.0)
(32.1)
(33.5)
Trade names
 
 
 
Definite-lived intangible assets:
 
 
 
Gross carrying amount
1.5 
1.4 
1.4 
Accumulated amortization
(1.0)
(0.8)
(0.7)
Net carrying amount
0.5 
0.6 
0.7 
Favorable leases
 
 
 
Definite-lived intangible assets:
 
 
 
Gross carrying amount
47.9 
47.6 
47.5 
Accumulated amortization
(44.1)
(36.0)
(32.6)
Net carrying amount
3.8 
11.6 
14.9 
Trade names
 
 
 
Definite-lived intangible assets:
 
 
 
Indefinite-lived trade names
$ 406.1 
$ 404.8 
$ 404.2 
Other assets - Components of Other Assets (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
 
 
 
Deferred ESP selling costs
$ 86.0 
$ 86.1 
$ 81.8 
Investments
28.7 
27.2 
27.5 
Other assets
54.4 
51.8 
48.2 
Total other assets
169.1 
165.1 
157.5 
Deferred costs related to the sale of the extended service plan
$ 29.3 
$ 29.4 
$ 27.6 
Derivatives - Additional Information (Details) (USD $)
3 Months Ended
Mar. 31, 2015
Interest rate swaps
Oct. 28, 2017
Foreign currency contracts
Not Designated as Hedging Instrument
Jan. 28, 2017
Foreign currency contracts
Not Designated as Hedging Instrument
Oct. 29, 2016
Foreign currency contracts
Not Designated as Hedging Instrument
Oct. 28, 2017
Cash Flow Hedging
Oct. 28, 2017
Cash Flow Hedging
Foreign currency contracts
Jan. 28, 2017
Cash Flow Hedging
Foreign currency contracts
Oct. 29, 2016
Cash Flow Hedging
Foreign currency contracts
Oct. 28, 2017
Cash Flow Hedging
Commodity contracts
oz
Jan. 28, 2017
Cash Flow Hedging
Commodity contracts
oz
Oct. 29, 2016
Cash Flow Hedging
Commodity contracts
oz
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Derivative, notional amount
$ 300,000,000 
$ 48,100,000 
$ 117,800,000 
$ 53,200,000 
 
$ 38,400,000 
$ 37,800,000 
$ 27,800,000 
 
 
 
Derivative, remaining maturity
 
 
 
 
 
0 years 11 months 0 days 
0 years 12 months 0 days 
0 years 15 months 0 days 
0 years 9 months 0 days 
0 years 12 months 0 days 
0 years 15 months 0 days 
Derivative, notional amount in gold
 
 
 
 
 
 
 
 
19,000 
94,000 
57,000 
Cash flow hedge gain to be reclassified within twelve months
 
 
 
 
$ 2,000,000 
 
 
 
 
 
 
Derivatives - Fair Value of Presentation of Derivative Assets and Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Derivatives, Fair Value [Line Items]
 
 
 
Fair Value of derivative assets
$ 2.2 
$ 3.6 
$ 4.1 
Fair value of derivative liabilities
(1.3)
(3.6)
(3.1)
Designated as Hedging Instrument
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair Value of derivative assets
2.2 
1.8 
4.1 
Fair value of derivative liabilities
(0.7)
(3.6)
(3.0)
Foreign currency contracts |
Designated as Hedging Instrument |
Other current assets
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair Value of derivative assets
0.2 
1.4 
3.5 
Foreign currency contracts |
Designated as Hedging Instrument |
Other current liabilities
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative liabilities
(0.7)
(0.2)
Foreign currency contracts |
Not Designated as Hedging Instrument |
Other assets
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair Value of derivative assets
1.8 
Foreign currency contracts |
Not Designated as Hedging Instrument |
Other current liabilities
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative liabilities
(0.6)
(0.1)
Commodity contracts |
Designated as Hedging Instrument |
Other current assets
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair Value of derivative assets
0.7 
0.6 
Commodity contracts |
Designated as Hedging Instrument |
Other assets
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair Value of derivative assets
1.3 
0.4 
Commodity contracts |
Designated as Hedging Instrument |
Other current liabilities
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative liabilities
(3.4)
(0.7)
Interest rate swaps |
Designated as Hedging Instrument |
Other liabilities
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative liabilities
$ 0 
$ 0 
$ (2.3)
Derivatives - Derivative Instruments Designated as Cash Flow Hedges in OCI (Details) (Cash Flow Hedging, USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Foreign currency contracts
Oct. 29, 2016
Foreign currency contracts
Oct. 28, 2017
Foreign currency contracts
Oct. 29, 2016
Foreign currency contracts
Oct. 28, 2017
Commodity contracts
Oct. 29, 2016
Commodity contracts
Oct. 28, 2017
Commodity contracts
Oct. 29, 2016
Commodity contracts
Oct. 28, 2017
Interest Rate Contract
Oct. 29, 2016
Interest Rate Contract
Oct. 28, 2017
Interest Rate Contract
Oct. 29, 2016
Interest Rate Contract
Oct. 28, 2017
Interest rate swaps
Jan. 28, 2017
Interest rate swaps
Oct. 29, 2016
Interest rate swaps
Oct. 28, 2017
Cost of Sales
Foreign currency contracts
Oct. 29, 2016
Cost of Sales
Foreign currency contracts
Oct. 28, 2017
Cost of Sales
Foreign currency contracts
Oct. 29, 2016
Cost of Sales
Foreign currency contracts
Oct. 28, 2017
Cost of Sales
Commodity contracts
Oct. 29, 2016
Cost of Sales
Commodity contracts
Oct. 28, 2017
Cost of Sales
Commodity contracts
Oct. 29, 2016
Cost of Sales
Commodity contracts
Oct. 28, 2017
Interest expense, net
Interest Rate Contract
Oct. 29, 2016
Interest expense, net
Interest Rate Contract
Oct. 28, 2017
Interest expense, net
Interest Rate Contract
Oct. 29, 2016
Interest expense, net
Interest Rate Contract
Movement in Accumulated Other Comprehensive Income [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gains (losses) recorded in AOCI, beginning of period
$ 2.8 
$ 2.4 
$ 7.9 
$ 0.6 
$ 3.8 
$ 4.1 
$ 1.4 
$ 1.0 
$ 6.2 
$ (2.1)
$ (3.7)
$ 0.7 
$ (3.8)
$ 0.4 
$ (3.4)
$ 1.3 
$ 0.4 
$ (2.3)
 
 
 
 
 
 
 
 
 
 
 
 
Current period (losses) gains recognized in OCI
 
 
 
0.2 
3.0 
(1.1)
6.0 
0.5 
(2.1)
5.1 
5.8 
0.6 
1.0 
0.5 
(0.6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) losses reclassified from AOCI to net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(0.8)
(0.4)
(3.0)
(1.0)
(0.3)
(1.5)
1.7 
0.5 
0.4 
1.7 
Gains (losses) recorded in AOCI, end of period
$ 2.8 
$ 2.4 
$ 7.9 
$ 0 
$ 6.4 
$ 0 
$ 6.4 
$ 1.5 
$ 3.8 
$ 1.5 
$ 3.8 
$ 1.3 
$ (2.3)
$ 1.3 
$ (2.3)
$ 1.3 
$ 0.4 
$ (2.3)
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives - Derivatives not Designated as Hedging Instruments (Details) (Not Designated as Hedging Instrument, Foreign currency contracts, Other Income, USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Not Designated as Hedging Instrument |
Foreign currency contracts |
Other Income
 
 
 
 
Derivative [Line Items]
 
 
 
 
Foreign currency contracts not designated as hedging
$ (0.1)
$ 1.6 
$ 3.1 
$ 3.2 
Fair value measurements - Fair Value of Assets and Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Quoted prices in active markets for identical assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
$ 11.8 
$ 11.9 
$ 11.9 
Liabilities
Significant other observable inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
19.1 
18.9 
19.7 
Liabilities
(1.3)
(3.6)
(3.1)
US Treasury securities |
Quoted prices in active markets for identical assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
7.7 
8.1 
8.3 
US Treasury securities |
Significant other observable inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
Corporate equity securities |
Quoted prices in active markets for identical assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
4.1 
3.8 
3.6 
Corporate equity securities |
Significant other observable inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
Foreign currency contracts |
Quoted prices in active markets for identical assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
Liabilities
Foreign currency contracts |
Significant other observable inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
0.2 
3.2 
3.5 
Liabilities
(1.3)
(0.2)
(0.1)
Commodity contracts |
Quoted prices in active markets for identical assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
Liabilities
Commodity contracts |
Significant other observable inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
0.7 
0.6 
Liabilities
(3.4)
(0.7)
Interest rate swaps |
Quoted prices in active markets for identical assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
 
Liabilities
Interest rate swaps |
Significant other observable inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
1.3 
0.4 
Liabilities
(2.3)
US government agency securities |
Quoted prices in active markets for identical assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
US government agency securities |
Significant other observable inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
5.4 
4.4 
4.5 
Corporate bonds and notes |
Quoted prices in active markets for identical assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
Corporate bonds and notes |
Significant other observable inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
11.5 
10.9 
11.1 
Carrying Value
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
30.9 
30.8 
31.6 
Liabilities
(1.3)
(3.6)
(3.1)
Carrying Value |
US Treasury securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
7.7 
8.1 
8.3 
Carrying Value |
Corporate equity securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
4.1 
3.8 
3.6 
Carrying Value |
Foreign currency contracts
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
0.2 
3.2 
3.5 
Liabilities
(1.3)
(0.2)
(0.1)
Carrying Value |
Commodity contracts
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
0.7 
0.6 
Liabilities
(3.4)
(0.7)
Carrying Value |
Interest rate swaps
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
1.3 
0.4 
Liabilities
(2.3)
Carrying Value |
US government agency securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
5.4 
4.4 
4.5 
Carrying Value |
Corporate bonds and notes
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Assets
$ 11.5 
$ 10.9 
$ 11.1 
Fair value measurements - Outstanding Debt (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Carrying Value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Outstanding debt
$ 724.3 
$ 1,338.5 
$ 1,342.3 
Fair Value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Outstanding debt
731.7 
1,339.8 
1,343.5 
Senior Notes |
Level 2 |
Carrying Value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Outstanding debt
394.3 
393.7 
393.4 
Senior Notes |
Level 2 |
Fair Value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Outstanding debt
398.8 
391.2 
390.5 
Securitization Facility |
Level 2 |
Carrying Value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Outstanding debt
599.7 
599.6 
Securitization Facility |
Level 2 |
Fair Value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Outstanding debt
600.0 
600.0 
Term Loan |
Level 2 |
Carrying Value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Outstanding debt
330.0 
345.1 
349.3 
Term Loan |
Level 2 |
Fair Value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Outstanding debt
$ 332.9 
$ 348.6 
$ 353.0 
Loans, overdrafts and long-term debt (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Debt Disclosure [Abstract]
 
 
 
Senior unsecured notes due 2024, net of unamortized discount
$ 398.9 
$ 398.8 
$ 398.7 
Securitization facility
600.0 
600.0 
Senior unsecured term loan
332.9 
348.6 
353.0 
Revolving credit facility
256.0 
56.0 
259.0 
Bank overdrafts
8.3 
14.2 
11.1 
Total debt
996.1 
1,417.6 
1,621.8 
Less: Current portion of loans and overdrafts
(291.8)
(91.1)
(288.8)
Less: Unamortized capitalized debt issuance fees
(7.5)
(8.6)
(8.8)
Long-term debt
$ 696.8 
$ 1,317.9 
$ 1,324.2 
Loans, overdrafts and long-term debt - Additional Information (Details) (USD $)
9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Bridge Loan
Oct. 28, 2017
Bridge Loan
Oct. 28, 2017
Credit Facility
Revolving Credit Facility
Oct. 29, 2016
Credit Facility
Revolving Credit Facility
Oct. 28, 2017
Credit Facility
Revolving Credit Facility
Oct. 29, 2016
Credit Facility
Revolving Credit Facility
Jan. 28, 2017
Credit Facility
Revolving Credit Facility
Oct. 28, 2017
Credit Facility
Term Loan
Oct. 29, 2016
Credit Facility
Term Loan
Oct. 28, 2017
Credit Facility
Term Loan
Oct. 29, 2016
Credit Facility
Term Loan
Jan. 28, 2017
Credit Facility
Term Loan
Oct. 28, 2017
Securitization Facility
Oct. 29, 2016
Securitization Facility
Oct. 28, 2017
Securitization Facility
Oct. 29, 2016
Securitization Facility
Jan. 28, 2017
Securitization Facility
Oct. 28, 2017
Signet UK Finance plc
Senior Unsecured Notes Due in 2024
Oct. 29, 2016
Signet UK Finance plc
Senior Unsecured Notes Due in 2024
Oct. 28, 2017
Signet UK Finance plc
Senior Unsecured Notes Due in 2024
Oct. 29, 2016
Signet UK Finance plc
Senior Unsecured Notes Due in 2024
Jan. 28, 2017
Signet UK Finance plc
Senior Unsecured Notes Due in 2024
Sep. 12, 2017
R2Net Inc.
Bridge Loan
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit facility, maximum borrowing capacity
 
 
 
 
$ 700,000,000 
 
$ 700,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Face amount
 
 
 
 
 
 
 
 
 
357,500,000.0 
 
357,500,000.0 
 
 
 
 
 
 
 
400,000,000 
 
400,000,000 
 
 
 
Capitalized fees
 
 
 
 
2,600,000 
 
2,600,000 
 
 
6,200,000 
 
6,200,000 
 
 
3,400,000 
 
3,400,000 
 
 
7,000,000 
 
7,000,000 
 
 
 
Accumulated amortization of noncurrent deferred finance costs
 
 
 
 
1,100,000 
700,000 
1,100,000 
700,000 
800,000 
3,300,000 
2,500,000 
3,300,000 
2,500,000 
2,700,000 
3,400,000 
3,000,000 
3,400,000 
3,000,000 
3,100,000 
2,400,000 
1,700,000 
2,400,000 
1,700,000 
1,900,000 
 
Amortization of financing costs
(3,200,000)
(2,200,000)
 
 
(100,000)
(100,000)
(300,000)
(300,000)
 
200,000 
(200,000)
(600,000)
(700,000)
 
(200,000)
(100,000)
(200,000)
(100,000)
 
200,000 
(200,000)
(500,000)
(500,000)
 
 
Letters of credit outstanding
 
 
 
 
15,700,000 
14,800,000 
15,700,000 
14,800,000 
15,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate
 
 
 
 
2.45% 
1.68% 
2.45% 
1.68% 
 
2.34% 
1.74% 
2.34% 
1.74% 
 
2.50% 
1.98% 
2.50% 
1.98% 
 
 
 
 
 
 
 
Stated interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.70% 
 
4.70% 
 
 
 
Debt instrument, maturity period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 
 
 
 
 
 
 
 
 
Repayments of secured debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
600,000,000 
 
 
 
 
 
 
 
 
 
 
Interest expense, debt
 
 
900,000 
900,000 
 
 
 
 
 
 
 
 
 
 
300,000 
600,000 
300,000 
600,000 
 
 
 
 
 
 
 
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
350,000,000 
Payments of Debt Issuance Costs
 
 
$ 1,400,000 
$ 1,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred revenue (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jul. 29, 2017
Jan. 28, 2017
Oct. 29, 2016
Jul. 30, 2016
Jan. 30, 2016
Deferred Revenue Arrangement [Line Items]
 
 
 
 
 
 
Voucher promotions and other
$ 33.6 
 
$ 30.3 
$ 23.4 
 
 
Total deferred revenue
916.4 
 
935.9 
888.8 
 
 
Current liabilities
270.3 
 
276.9 
256.7 
 
 
Non-current liabilities
646.1 
 
659.0 
632.1 
 
 
Sterling Jewelers
 
 
 
 
 
 
Deferred Revenue Arrangement [Line Items]
 
 
 
 
 
 
ESP deferred revenue
717.6 
732.7 
737.4 
710.2 
720.3 
715.1 
Zale Jewelry
 
 
 
 
 
 
Deferred Revenue Arrangement [Line Items]
 
 
 
 
 
 
ESP deferred revenue
$ 165.2 
 
$ 168.2 
$ 155.2 
 
 
Deferred revenue - Rollforward (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Sterling Jewelers
 
 
 
 
Deferred Revenue Warranty [Roll Forward]
 
 
 
 
ESP deferred revenue, beginning of period
$ 732.7 
$ 720.3 
$ 737.4 
$ 715.1 
Plans sold
47.9 
52.8 
176.7 
190.4 
Revenue recognized
(63.0)
(62.9)
(196.5)
(195.3)
ESP deferred revenue, end of period
717.6 
710.2 
717.6 
710.2 
Zale
 
 
 
 
Deferred Revenue Warranty [Roll Forward]
 
 
 
 
ESP deferred revenue, beginning of period
169.5 
156.2 
168.2 
146.1 
Plans sold
25.0 
28.3 
89.6 
100.8 
Revenue recognized
(29.3)
(29.3)
(92.6)
(91.7)
ESP deferred revenue, end of period
$ 165.2 
$ 155.2 
$ 165.2 
$ 155.2 
Warranty reserve - Rollforward (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
 
 
Balance at beginning of period
$ 39.3 
$ 40.4 
$ 40.0 
$ 41.9 
Warranty expense
3.1 
3.7 
7.9 
9.4 
Utilized
(3.1)
(3.6)
(8.6)
(10.8)
Balance at end of period
$ 39.3 
$ 40.5 
$ 39.3 
$ 40.5 
Warranty reserve (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jul. 29, 2017
Jan. 28, 2017
Oct. 29, 2016
Jul. 30, 2016
Jan. 30, 2016
Product Warranty Liability [Line Items]
 
 
 
 
 
 
Product warranty accrual
$ 39.3 
$ 39.3 
$ 40.0 
$ 40.5 
$ 40.4 
$ 41.9 
Current liabilities
 
 
 
 
 
 
Product Warranty Liability [Line Items]
 
 
 
 
 
 
Current liabilities
12.2 
 
13.0 
12.9 
 
 
Non-current liabilities
 
 
 
 
 
 
Product Warranty Liability [Line Items]
 
 
 
 
 
 
Non-current liabilities
$ 27.1 
 
$ 27.0 
$ 27.6 
 
 
Share-based compensation - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
 
Share-based compensation expense
$ 4.3 
$ 5.2 
$ 11.0 
$ 14.0 
Commitments and contingencies - Additional information (Details)
0 Months Ended 9 Months Ended 1 Months Ended
Apr. 23, 2013
Zale Corporation
lawsuit
Aug. 1, 2016
EPA Collective Action
employee
Oct. 28, 2017
EPA Collective Action
employee
Aug. 31, 2016
S.D.N.Y. Cases
lawsuit
Loss Contingencies [Line Items]
 
 
 
 
Number of employees opted in lawsuit
 
10,314 
9,124 
 
Pending claims
 
 
 
New claims filed, number
 
 
 
Pension plans - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 28, 2017
Foreign Plan
Defined Benefit Plan Disclosure [Line Items]
 
 
Curtailment gain
$ 6.4 
 
Settlement loss
(2.7)
 
Employer contributions
 
2.4 
Estimated future employer contributions in next fiscal year
 
$ 3.3 
Pension plans - Components of Net Periodic Pension Cost (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Retirement Benefits [Abstract]
 
 
 
 
Service cost
$ (0.6)
$ (0.5)
$ (1.6)
$ (1.5)
Interest cost
(1.6)
(1.7)
(4.7)
(5.5)
Expected return on UK Plan assets
2.4 
2.5 
7.1 
8.0 
Amortization of unrecognized actuarial losses
(0.7)
(0.4)
(2.2)
(1.2)
Amortization of unrecognized net prior service credits
0.4 
0.5 
1.3 
1.5 
Net periodic pension (expense) benefit
(0.1)
0.4 
(0.1)
1.3 
Net curtailment gain and settlement loss
3.7 1
1
3.7 1
1
Total recognized in net periodic pension benefit and OCI
$ 3.6 
$ 0.4 
$ 3.6 
$ 1.3 
Condensed consolidating financial information - Narrative (Details)
Oct. 28, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Parent's ownership in guarantor subsidiary (percent)
100.00% 
Condensed consolidating financial information - Condensed consolidated income statement (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Condensed Income Statements, Captions [Line Items]
 
 
 
 
Sales
$ 1,156.9 
$ 1,186.2 
$ 3,959.9 
$ 4,138.5 
Cost of sales
(835.8)
(836.2)
(2,689.7)
(2,723.2)
Gross margin
321.1 
350.0 
1,270.2 
1,415.3 
Selling, general and administrative expenses
(375.9)
(386.5)
(1,237.7)
(1,264.9)
Credit transaction, net
(12.2)
2.6 
Other operating income, net
72.5 
68.6 
221.3 
213.6 
Operating income
5.5 
32.1 
256.4 
364.0 
Intra-entity interest income (expense)
Interest expense, net
(16.6)
(12.7)
(42.7)
(36.4)
(Loss) income before income taxes
(11.1)
19.4 
213.7 
327.6 
Income taxes
7.2 
(2.4)
(45.7)
(81.9)
Equity in income of subsidiaries
Net (loss) income
(3.9)
17.0 
168.0 
245.7 
Dividends on redeemable convertible preferred shares
(8.2)
(2.2)
(24.6)
(2.2)
Net income attributable to common shareholders
(12.1)
14.8 
143.4 
243.5 
Consolidation, Eliminations
 
 
 
 
Condensed Income Statements, Captions [Line Items]
 
 
 
 
Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Credit transaction, net
 
 
Other operating income, net
Operating income
Intra-entity interest income (expense)
Interest expense, net
(Loss) income before income taxes
Income taxes
Equity in income of subsidiaries
120.3 
58.2 
(138.8)
(388.5)
Net (loss) income
120.3 
58.2 
(138.8)
(388.5)
Dividends on redeemable convertible preferred shares
Net income attributable to common shareholders
120.3 
58.2 
(138.8)
(388.5)
Guarantor Subsidiaries |
Reportable Legal Entities
 
 
 
 
Condensed Income Statements, Captions [Line Items]
 
 
 
 
Sales
1,067.0 
1,121.8 
3,714.5 
3,955.0 
Cost of sales
(799.9)
(821.7)
(2,623.1)
(2,688.0)
Gross margin
267.1 
300.1 
1,091.4 
1,267.0 
Selling, general and administrative expenses
(346.4)
(362.0)
(1,144.9)
(1,190.9)
Credit transaction, net
(12.2)
 
2.6 
 
Other operating income, net
72.7 
75.6 
221.6 
227.6 
Operating income
(18.8)
13.7 
170.7 
303.7 
Intra-entity interest income (expense)
(47.0)
(47.8)
(138.8)
(142.2)
Interest expense, net
(7.7)
(4.5)
(16.5)
(12.1)
(Loss) income before income taxes
(73.5)
(38.6)
15.4 
149.4 
Income taxes
28.3 
15.1 
(8.4)
(61.5)
Equity in income of subsidiaries
(71.5)
(51.9)
(41.2)
48.8 
Net (loss) income
(116.7)
(75.4)
(34.2)
136.7 
Dividends on redeemable convertible preferred shares
Net income attributable to common shareholders
(116.7)
(75.4)
(34.2)
136.7 
Non-Guarantor Subsidiaries |
Reportable Legal Entities
 
 
 
 
Condensed Income Statements, Captions [Line Items]
 
 
 
 
Sales
89.9 
64.4 
245.4 
183.5 
Cost of sales
(35.9)
(14.5)
(66.6)
(35.2)
Gross margin
54.0 
49.9 
178.8 
148.3 
Selling, general and administrative expenses
(28.9)
(24.2)
(91.8)
(73.1)
Credit transaction, net
 
 
Other operating income, net
(0.2)
(7.0)
(0.3)
(14.0)
Operating income
24.9 
18.7 
86.7 
61.2 
Intra-entity interest income (expense)
42.3 
43.1 
124.7 
128.1 
Interest expense, net
(3.8)
(3.2)
(11.2)
(9.5)
(Loss) income before income taxes
63.4 
58.6 
200.2 
179.8 
Income taxes
(21.2)
(17.5)
(37.5)
(20.5)
Equity in income of subsidiaries
(45.5)
(23.6)
11.0 
93.1 
Net (loss) income
(3.3)
17.5 
173.7 
252.4 
Dividends on redeemable convertible preferred shares
Net income attributable to common shareholders
(3.3)
17.5 
173.7 
252.4 
Signet Jewelers Limited |
Reportable Legal Entities
 
 
 
 
Condensed Income Statements, Captions [Line Items]
 
 
 
 
Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
(0.6)
(0.3)
(1.0)
(0.9)
Credit transaction, net
 
 
Other operating income, net
Operating income
(0.6)
(0.3)
(1.0)
(0.9)
Intra-entity interest income (expense)
Interest expense, net
(Loss) income before income taxes
(0.6)
(0.3)
(1.0)
(0.9)
Income taxes
Equity in income of subsidiaries
(3.3)
17.3 
169.0 
246.6 
Net (loss) income
(3.9)
17.0 
168.0 
245.7 
Dividends on redeemable convertible preferred shares
8.2 
(2.2)
(24.6)
(2.2)
Net income attributable to common shareholders
(12.1)
14.8 
143.4 
243.5 
Signet UK Finance plc |
Reportable Legal Entities
 
 
 
 
Condensed Income Statements, Captions [Line Items]
 
 
 
 
Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Credit transaction, net
 
 
Other operating income, net
Operating income
Intra-entity interest income (expense)
4.7 
4.7 
14.1 
14.1 
Interest expense, net
(5.1)
(5.0)
(15.0)
(14.8)
(Loss) income before income taxes
(0.4)
(0.3)
(0.9)
(0.7)
Income taxes
0.1 
0.2 
0.1 
Equity in income of subsidiaries
Net (loss) income
(0.3)
(0.3)
(0.7)
(0.6)
Dividends on redeemable convertible preferred shares
Net income attributable to common shareholders
$ (0.3)
$ (0.3)
$ (0.7)
$ (0.6)
Condensed consolidating financial information - Condensed consolidated statement of comprehensive income (loss) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Oct. 28, 2017
Oct. 29, 2016
Condensed Statement of Comprehensive Income [Line Items]
 
 
 
 
Net income
$ (3.9)
$ 17.0 
$ 168.0 
$ 245.7 
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustments
(6.5)
(28.9)
18.6 
(38.0)
Available-for-sale securities:
 
 
 
 
Unrealized loss
(0.2)
(0.2)
0.3 
0.2 
Cash flow hedges:
 
 
 
 
Unrealized gain
0.9 
1.9 
2.7 
8.2 
Reclassification adjustment for losses to net income
(0.6)
(0.1)
(3.1)
1.6 
Pension plan:
 
 
 
 
Actuarial loss
(0.9)
(0.9)
Reclassification adjustment to net income for amortization of actuarial loss
0.6 
0.4 
1.8 
1.0 
Reclassification adjustment to net income for amortization of prior service credits
(0.4)
(0.4)
(1.1)
(1.2)
Net curtailment gain and settlement loss
(3.0)
(3.0)
Total other comprehensive loss
(10.1)
(27.3)
15.3 
(28.2)
Total comprehensive loss
(14.0)
(10.3)
183.3 
217.5 
Consolidation, Eliminations
 
 
 
 
Condensed Statement of Comprehensive Income [Line Items]
 
 
 
 
Net income
120.3 
58.2 
(138.8)
(388.5)
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustments
6.5 
28.9 
(18.6)
38.0 
Available-for-sale securities:
 
 
 
 
Unrealized loss
0.2 
0.2 
(0.3)
(0.2)
Cash flow hedges:
 
 
 
 
Unrealized gain
(0.9)
(1.9)
(2.7)
(8.2)
Reclassification adjustment for losses to net income
0.6 
0.1 
3.1 
(1.6)
Pension plan:
 
 
 
 
Actuarial loss
0.9 
 
0.9 
 
Reclassification adjustment to net income for amortization of actuarial loss
(0.6)
(0.4)
(1.8)
(1.0)
Reclassification adjustment to net income for amortization of prior service credits
0.4 
0.4 
1.1 
1.2 
Net curtailment gain and settlement loss
3.0 
 
3.0 
 
Total other comprehensive loss
10.1 
27.3 
(15.3)
28.2 
Total comprehensive loss
130.4 
85.5 
(154.1)
(360.3)
Guarantor Subsidiaries |
Reportable Legal Entities
 
 
 
 
Condensed Statement of Comprehensive Income [Line Items]
 
 
 
 
Net income
(116.7)
(75.4)
(34.2)
136.7 
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustments
(6.5)
(32.5)
18.6 
(45.2)
Available-for-sale securities:
 
 
 
 
Unrealized loss
Cash flow hedges:
 
 
 
 
Unrealized gain
0.9 
1.9 
2.7 
8.2 
Reclassification adjustment for losses to net income
(0.6)
(0.1)
(3.1)
1.6 
Pension plan:
 
 
 
 
Actuarial loss
(0.9)
 
(0.9)
 
Reclassification adjustment to net income for amortization of actuarial loss
0.6 
0.4 
1.8 
1.0 
Reclassification adjustment to net income for amortization of prior service credits
(0.4)
(0.4)
(1.1)
(1.2)
Net curtailment gain and settlement loss
(3.0)
 
(3.0)
 
Total other comprehensive loss
(9.9)
(30.7)
15.0 
(35.6)
Total comprehensive loss
(126.6)
(106.1)
(19.2)
101.1 
Non-Guarantor Subsidiaries |
Reportable Legal Entities
 
 
 
 
Condensed Statement of Comprehensive Income [Line Items]
 
 
 
 
Net income
(3.3)
17.5 
173.7 
252.4 
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustments
 
3.6 
 
7.2 
Available-for-sale securities:
 
 
 
 
Unrealized loss
(0.2)
(0.2)
0.3 
0.2 
Cash flow hedges:
 
 
 
 
Unrealized gain
Reclassification adjustment for losses to net income
Pension plan:
 
 
 
 
Actuarial loss
 
 
Reclassification adjustment to net income for amortization of actuarial loss
Reclassification adjustment to net income for amortization of prior service credits
Net curtailment gain and settlement loss
 
 
 
Total other comprehensive loss
(0.2)
3.4 
0.3 
7.4 
Total comprehensive loss
(3.5)
20.9 
174.0 
259.8 
Signet Jewelers Limited |
Reportable Legal Entities
 
 
 
 
Condensed Statement of Comprehensive Income [Line Items]
 
 
 
 
Net income
(3.9)
17.0 
168.0 
245.7 
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustments
(6.5)
(28.9)
18.6 
(38.0)
Available-for-sale securities:
 
 
 
 
Unrealized loss
(0.2)
(0.2)
0.3 
0.2 
Cash flow hedges:
 
 
 
 
Unrealized gain
0.9 
1.9 
2.7 
8.2 
Reclassification adjustment for losses to net income
(0.6)
(0.1)
(3.1)
1.6 
Pension plan:
 
 
 
 
Actuarial loss
(0.9)
 
(0.9)
 
Reclassification adjustment to net income for amortization of actuarial loss
0.6 
0.4 
1.8 
1.0 
Reclassification adjustment to net income for amortization of prior service credits
(0.4)
(0.4)
(1.1)
(1.2)
Net curtailment gain and settlement loss
(3.0)
 
(3.0)
 
Total other comprehensive loss
(10.1)
(27.3)
15.3 
(28.2)
Total comprehensive loss
(14.0)
(10.3)
183.3 
217.5 
Signet UK Finance plc |
Reportable Legal Entities
 
 
 
 
Condensed Statement of Comprehensive Income [Line Items]
 
 
 
 
Net income
(0.3)
(0.3)
(0.7)
(0.6)
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustments
Available-for-sale securities:
 
 
 
 
Unrealized loss
Cash flow hedges:
 
 
 
 
Unrealized gain
Reclassification adjustment for losses to net income
Pension plan:
 
 
 
 
Actuarial loss
 
 
Reclassification adjustment to net income for amortization of actuarial loss
Reclassification adjustment to net income for amortization of prior service credits
Net curtailment gain and settlement loss
 
 
Total other comprehensive loss
Total comprehensive loss
$ (0.3)
$ (0.3)
$ (0.7)
$ (0.6)
Condensed consolidating financial information - Condensed consolidated balance sheet (Details) (USD $)
In Millions, unless otherwise specified
Oct. 28, 2017
Jan. 28, 2017
Oct. 29, 2016
Jan. 30, 2016
Current assets:
 
 
 
 
Cash and cash equivalents
$ 113.4 
$ 98.7 
$ 82.7 
$ 137.7 
Accounts receivable, net
640.1 
1,858.0 
1,581.1 
 
Intra-entity receivables, net
 
Other receivables
80.3 
95.9 
74.2 
 
Other current assets
145.0 
136.3 
146.8 
 
Income taxes
17.3 
4.4 
20.8 
 
Inventories
2,466.1 
2,449.3 
2,649.4 
 
Total current assets
3,462.2 
4,642.6 
4,555.0 
 
Non-current assets:
 
 
 
 
Property, plant and equipment, net
855.1 
822.9 
791.1 
 
Goodwill
867.1 
517.6 
517.0 
515.5 
Intangible assets, net
410.4 
417.0 
419.8 
 
Investment in subsidiaries
 
 
Intra-entity receivables, net
 
 
Other assets
169.1 
165.1 
157.5 
 
Deferred tax assets
1.3 
0.7 
 
Retirement benefit asset
35.5 
31.9 
47.1 
 
Total assets
5,800.7 
6,597.8 
6,487.5 
 
Current liabilities:
 
 
 
 
Loans and overdrafts
291.8 
91.1 
288.8 
 
Accounts payable
324.9 
255.7 
382.2 
 
Intra-entity payables, net
 
 
Accrued expenses and other current liabilities
430.5 
478.2 
402.9 
 
Deferred revenue
270.3 
276.9 
256.7 
 
Income taxes
101.8 
4.4 
 
Total current liabilities
1,317.5 
1,203.7 
1,335.0 
 
Non-current liabilities:
 
 
 
 
Long-term debt
696.8 
1,317.9 
1,324.2 
 
Other liabilities
244.4 
213.7 
219.9 
 
Deferred revenue
646.1 
659.0 
632.1 
 
Deferred tax liabilities
143.8 
101.4 
133.4 
 
Total liabilities
3,048.6 
3,495.7 
3,644.6 
 
Shareholders’ equity:
 
 
 
 
Total shareholders’ equity
2,139.0 
2,490.2 
2,231.2 
 
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
5,800.7 
6,597.8 
6,487.5 
 
Consolidation, Eliminations
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
Accounts receivable, net
 
Intra-entity receivables, net
(355.3)
(157.8)
(329.3)
 
Other receivables
 
Other current assets
 
Income taxes
 
Inventories
 
Total current assets
(355.3)
(157.8)
(329.3)
 
Non-current assets:
 
 
 
 
Property, plant and equipment, net
 
 
Goodwill
 
 
Intangible assets, net
 
Investment in subsidiaries
(3,874.4)
(4,430.1)
(3,873.6)
 
Intra-entity receivables, net
(3,235.0)
(4,050.0)
(4,055.0)
 
Other assets
 
 
Deferred tax assets
 
 
Retirement benefit asset
 
 
Total assets
(7,464.7)
(8,637.9)
(8,257.9)
 
Current liabilities:
 
 
 
 
Loans and overdrafts
 
Accounts payable
 
Intra-entity payables, net
(355.3)
(157.8)
(329.3)
 
Accrued expenses and other current liabilities
 
Deferred revenue
 
Income taxes
 
Total current liabilities
(355.3)
(157.8)
(329.3)
 
Non-current liabilities:
 
 
 
 
Long-term debt
 
 
 
Intra-entity payables, net
(3,235.0)
(4,050.0)
(4,055.0)
 
Other liabilities
 
 
 
Deferred revenue
 
 
 
Deferred tax liabilities
 
 
Total liabilities
(3,590.3)
(4,207.8)
(4,384.3)
 
Shareholders’ equity:
 
 
 
 
Total shareholders’ equity
(3,874.4)
(4,430.1)
(3,873.6)
 
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
(7,464.7)
(8,637.9)
(8,257.9)
 
Guarantor Subsidiaries |
Reportable Legal Entities
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
59.1 
70.3 
55.7 
102.0 
Accounts receivable, net
638.7 
1,858.0 
1,581.1 
 
Intra-entity receivables, net
145.1 
 
Other receivables
55.6 
71.1 
52.0 
 
Other current assets
140.0 
131.4 
140.3 
 
Income taxes
17.3 
4.4 
35.6 
 
Inventories
2,392.6 
2,371.8 
2,578.3 
 
Total current assets
3,303.3 
4,652.1 
4,443.0 
 
Non-current assets:
 
 
 
 
Property, plant and equipment, net
847.5 
818.5 
786.4 
 
Goodwill
515.0 
514.0 
513.4 
 
Intangible assets, net
410.4 
417.0 
419.8 
 
Investment in subsidiaries
834.5 
721.6 
586.7 
 
Intra-entity receivables, net
 
 
Other assets
136.9 
134.8 
126.2 
 
Deferred tax assets
1.2 
0.6 
 
Retirement benefit asset
35.5 
31.9 
47.1 
 
Total assets
6,084.3 
7,290.5 
6,922.6 
 
Current liabilities:
 
 
 
 
Loans and overdrafts
292.5 
91.8 
289.5 
 
Accounts payable
291.0 
248.2 
376.4 
 
Intra-entity payables, net
355.3 
 
329.3 
 
Accrued expenses and other current liabilities
372.1 
429.2 
360.1 
 
Deferred revenue
259.6 
275.5 
256.7 
 
Income taxes
(24.3)
115.5 
3.9 
 
Total current liabilities
1,546.2 
1,160.2 
1,615.9 
 
Non-current liabilities:
 
 
 
 
Long-term debt
301.8 
323.6 
330.1 
 
Intra-entity payables, net
3,235.0 
4,050.0 
4,055.0 
 
Other liabilities
238.8 
208.7 
213.7 
 
Deferred revenue
646.1 
659.0 
632.1 
 
Deferred tax liabilities
143.6 
101.4 
133.5 
 
Total liabilities
6,111.5 
6,502.9 
6,980.3 
 
Shareholders’ equity:
 
 
 
 
Total shareholders’ equity
(27.2)
787.6 
(57.7)
 
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
6,084.3 
7,290.5 
6,922.6 
 
Non-Guarantor Subsidiaries |
Reportable Legal Entities
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
53.8 
26.6 
26.7 
33.7 
Accounts receivable, net
1.4 
 
 
Intra-entity receivables, net
262.1 
 
278.9 
 
Other receivables
24.7 
24.8 
22.2 
 
Other current assets
5.0 
4.9 
6.5 
 
Income taxes
 
(14.9)
 
Inventories
73.5 
77.5 
71.1 
 
Total current assets
420.5 
133.8 
390.5 
 
Non-current assets:
 
 
 
 
Property, plant and equipment, net
7.6 
4.4 
4.7 
 
Goodwill
352.1 
3.6 
3.6 
 
Intangible assets, net
 
Investment in subsidiaries
346.2 
590.9 
474.4 
 
Intra-entity receivables, net
2,835.0 
3,647.1 
3,647.4 
 
Other assets
32.2 
30.3 
31.3 
 
Deferred tax assets
0.1 
0.1 
 
Retirement benefit asset
 
 
Total assets
3,993.7 
4,410.2 
4,551.9 
 
Current liabilities:
 
 
 
 
Loans and overdrafts
 
Accounts payable
33.9 
7.5 
5.8 
 
Intra-entity payables, net
157.8 
 
Accrued expenses and other current liabilities
23.7 
16.6 
15.5 
 
Deferred revenue
10.7 
1.4 
 
Income taxes
24.5 
(13.5)
0.5 
 
Total current liabilities
92.8 
169.8 
21.8 
 
Non-current liabilities:
 
 
 
 
Long-term debt
 
600.0 
600.0 
 
Other liabilities
5.6 
5.0 
6.2 
 
Deferred revenue
 
 
 
Deferred tax liabilities
0.2 
(0.1)
 
Total liabilities
98.6 
774.8 
627.9 
 
Shareholders’ equity:
 
 
 
 
Total shareholders’ equity
3,895.1 
3,635.4 
3,924.0 
 
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
3,993.7 
4,410.2 
4,551.9 
 
Signet Jewelers Limited |
Reportable Legal Entities
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
0.4 
1.7 
0.2 
1.9 
Accounts receivable, net
 
Intra-entity receivables, net
85.6 
12.7 
50.4 
 
Other receivables
 
Other current assets
 
 
Income taxes
 
Inventories
 
Total current assets
86.0 
14.4 
50.6 
 
Non-current assets:
 
 
 
 
Property, plant and equipment, net
 
 
Goodwill
 
 
Intangible assets, net
 
Investment in subsidiaries
2,693.7 
3,117.6 
2,812.5 
 
Intra-entity receivables, net
 
 
Other assets
 
 
Deferred tax assets
 
 
Retirement benefit asset
 
 
Total assets
2,779.7 
3,132.0 
2,863.1 
 
Current liabilities:
 
 
 
 
Loans and overdrafts
 
Accounts payable
 
Intra-entity payables, net
 
Accrued expenses and other current liabilities
27.6 
29.9 
20.2 
 
Deferred revenue
 
Income taxes
 
Total current liabilities
27.6 
29.9 
20.2 
 
Non-current liabilities:
 
 
 
 
Long-term debt
 
 
 
Other liabilities
 
 
 
Deferred revenue
 
 
 
Deferred tax liabilities
 
 
Total liabilities
27.6 
29.9 
20.2 
 
Shareholders’ equity:
 
 
 
 
Total shareholders’ equity
2,139.0 
2,490.2 
2,231.2 
 
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
2,779.7 
3,132.0 
2,863.1 
 
Signet UK Finance plc |
Reportable Legal Entities
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
0.1 
0.1 
0.1 
0.1 
Accounts receivable, net
 
Intra-entity receivables, net
7.6 
 
Other receivables
 
Other current assets
 
 
Income taxes
0.1 
 
Inventories
 
Total current assets
7.7 
0.1 
0.2 
 
Non-current assets:
 
 
 
 
Property, plant and equipment, net
 
Goodwill
 
Intangible assets, net
 
Investment in subsidiaries
 
Intra-entity receivables, net
400.0 
402.9 
407.6 
 
Other assets
 
 
Deferred tax assets
 
Retirement benefit asset
 
Total assets
407.7 
403.0 
407.8 
 
Current liabilities:
 
 
 
 
Loans and overdrafts
(0.7)
(0.7)
(0.7)
 
Accounts payable
 
Intra-entity payables, net
 
Accrued expenses and other current liabilities
7.1 
2.5 
7.1 
 
Deferred revenue
 
Income taxes
(0.2)
(0.2)
 
Total current liabilities
6.2 
1.6 
6.4 
 
Non-current liabilities:
 
 
 
 
Long-term debt
395.0 
394.3 
394.1 
 
Intra-entity payables, net
 
 
Other liabilities
 
 
Deferred revenue
 
 
Deferred tax liabilities
 
 
Total liabilities
401.2 
395.9 
400.5 
 
Shareholders’ equity:
 
 
 
 
Total shareholders’ equity
6.5 
7.1 
7.3 
 
Total liabilities, redeemable convertible preferred shares and shareholders’ equity
407.7 
403.0 
407.8 
 
Series A Redeemable Convertible Preferred Stock
 
 
 
 
Non-current liabilities:
 
 
 
 
Series A redeemable convertible preferred shares
613.1 
611.9 
611.7 
 
Series A Redeemable Convertible Preferred Stock |
Consolidation, Eliminations
 
 
 
 
Non-current liabilities:
 
 
 
 
Series A redeemable convertible preferred shares
 
Series A Redeemable Convertible Preferred Stock |
Guarantor Subsidiaries |
Reportable Legal Entities
 
 
 
 
Non-current liabilities:
 
 
 
 
Series A redeemable convertible preferred shares
 
Series A Redeemable Convertible Preferred Stock |
Non-Guarantor Subsidiaries |
Reportable Legal Entities
 
 
 
 
Non-current liabilities:
 
 
 
 
Series A redeemable convertible preferred shares
 
Series A Redeemable Convertible Preferred Stock |
Signet Jewelers Limited |
Reportable Legal Entities
 
 
 
 
Non-current liabilities:
 
 
 
 
Series A redeemable convertible preferred shares
613.1 
611.9 
611.7 
 
Series A Redeemable Convertible Preferred Stock |
Signet UK Finance plc |
Reportable Legal Entities
 
 
 
 
Non-current liabilities:
 
 
 
 
Series A redeemable convertible preferred shares
$ 0 
$ 0 
$ 0 
 
Condensed consolidating financial information - Condensed consolidated statement of cash flows (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 28, 2017
Oct. 29, 2016
Cash flows from operating activities
 
 
Net cash provided by (used in) operating activities
$ 1,482.3 
$ 360.9 
Investing activities
 
 
Purchase of property, plant and equipment
(166.1)
(195.6)
Investment in subsidiaries
 
Purchase of available-for-sale securities
(1.7)
(10.4)
Proceeds from available-for-sale securities
0.9 
10.0 
Acquisition of R2Net Inc., net of cash acquired
(332.4)
Net cash used in investing activities
(499.3)
(196.0)
Financing activities
 
 
Dividends paid on common shares
(57.7)
(57.5)
Dividends paid on redeemable convertible preferred shares
(26.9)
Intra-entity dividends paid
Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
611.6 
Proceeds from long-term debt
1,745.9 
1,837.1 
Proceeds from revolving credit facility
605.0 
598.0 
Repayments of revolving credit facility
(405.0)
(339.0)
Repurchase of common shares
(460.0)
(1,000.0)
Repayments of bank overdrafts
(5.9)
(13.3)
Other financing activities
(4.5)
(6.0)
Intra-entity activity, net
Net cash used in financing activities
(970.7)
(218.2)
Cash and cash equivalents at beginning of period
98.7 
137.7 
Decrease in cash and cash equivalents
12.3 
(53.3)
Effect of exchange rate changes on cash and cash equivalents
2.4 
(1.7)
Cash and cash equivalents at end of period
113.4 
82.7 
Consolidation, Eliminations
 
 
Cash flows from operating activities
 
 
Net cash provided by (used in) operating activities
(1,118.0)
(979.2)
Investing activities
 
 
Purchase of property, plant and equipment
Investment in subsidiaries
 
91.0 
Purchase of available-for-sale securities
Proceeds from available-for-sale securities
Acquisition of R2Net Inc., net of cash acquired
 
Net cash used in investing activities
91.0 
Financing activities
 
 
Dividends paid on common shares
Dividends paid on redeemable convertible preferred shares
Intra-entity dividends paid
1,118.0 
979.2 
Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
 
Proceeds from long-term debt
Proceeds from revolving credit facility
Repayments of revolving credit facility
Repurchase of common shares
Repayments of bank overdrafts
 
Other financing activities
(91.0)
Intra-entity activity, net
Net cash used in financing activities
1,118.0 
888.2 
Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period
Guarantor Subsidiaries |
Reportable Legal Entities
 
 
Cash flows from operating activities
 
 
Net cash provided by (used in) operating activities
1,467.2 
385.1 
Investing activities
 
 
Purchase of property, plant and equipment
(165.7)
(195.6)
Purchase of available-for-sale securities
Proceeds from available-for-sale securities
Acquisition of R2Net Inc., net of cash acquired
(332.4)
 
Net cash used in investing activities
(498.1)
(195.6)
Financing activities
 
 
Dividends paid on common shares
Dividends paid on redeemable convertible preferred shares
Intra-entity dividends paid
(800.0)
(650.0)
Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
 
Proceeds from long-term debt
Proceeds from revolving credit facility
605.0 
598.0 
Repayments of revolving credit facility
(405.0)
(339.0)
Repurchase of common shares
Repayments of bank overdrafts
(5.9)
(13.3)
Other financing activities
(1.4)
90.0 
Intra-entity activity, net
(359.7)
91.6 
Net cash used in financing activities
(982.7)
(234.7)
Cash and cash equivalents at beginning of period
70.3 
102.0 
Decrease in cash and cash equivalents
(13.6)
(45.2)
Effect of exchange rate changes on cash and cash equivalents
2.4 
(1.1)
Cash and cash equivalents at end of period
59.1 
55.7 
Non-Guarantor Subsidiaries |
Reportable Legal Entities
 
 
Cash flows from operating activities
 
 
Net cash provided by (used in) operating activities
511.4 
391.4 
Investing activities
 
 
Purchase of property, plant and equipment
(0.4)
 
Purchase of available-for-sale securities
(1.7)
(10.4)
Proceeds from available-for-sale securities
0.9 
10.0 
Net cash used in investing activities
(1.2)
(0.4)
Financing activities
 
 
Dividends paid on common shares
Dividends paid on redeemable convertible preferred shares
Intra-entity dividends paid
(318.0)
(329.2)
Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
 
Proceeds from long-term debt
1,745.9 
1,837.1 
Proceeds from revolving credit facility
Repayments of revolving credit facility
Repurchase of common shares
Repayments of bank overdrafts
 
Other financing activities
(0.6)
Intra-entity activity, net
435.0 
(67.6)
Net cash used in financing activities
(483.0)
(397.4)
Cash and cash equivalents at beginning of period
26.6 
33.7 
Decrease in cash and cash equivalents
27.2 
(6.4)
Effect of exchange rate changes on cash and cash equivalents
 
(0.6)
Cash and cash equivalents at end of period
53.8 
26.7 
Signet Jewelers Limited |
Reportable Legal Entities
 
 
Cash flows from operating activities
 
 
Net cash provided by (used in) operating activities
617.1 
558.7 
Investing activities
 
 
Purchase of property, plant and equipment
Investment in subsidiaries
 
(91.0)
Purchase of available-for-sale securities
Proceeds from available-for-sale securities
Acquisition of R2Net Inc., net of cash acquired
 
Net cash used in investing activities
(91.0)
Financing activities
 
 
Dividends paid on common shares
(57.7)
(57.5)
Dividends paid on redeemable convertible preferred shares
(26.9)
 
Intra-entity dividends paid
Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
 
611.6 
Proceeds from long-term debt
Proceeds from revolving credit facility
Repayments of revolving credit facility
 
Repurchase of common shares
(460.0)
(1,000.0)
Repayments of bank overdrafts
 
Other financing activities
(3.1)
(4.4)
Intra-entity activity, net
(70.7)
(19.1)
Net cash used in financing activities
(618.4)
(469.4)
Cash and cash equivalents at beginning of period
1.7 
1.9 
Decrease in cash and cash equivalents
(1.3)
(1.7)
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period
0.4 
0.2 
Signet UK Finance plc |
Reportable Legal Entities
 
 
Cash flows from operating activities
 
 
Net cash provided by (used in) operating activities
4.6 
4.9 
Investing activities
 
 
Purchase of property, plant and equipment
Investment in subsidiaries
 
Purchase of available-for-sale securities
Proceeds from available-for-sale securities
Acquisition of R2Net Inc., net of cash acquired
 
Net cash used in investing activities
Financing activities
 
 
Dividends paid on common shares
Dividends paid on redeemable convertible preferred shares
Intra-entity dividends paid
Proceeds from issuance of redeemable convertible preferred shares, net of issuance costs
 
Proceeds from long-term debt
Proceeds from revolving credit facility
Repayments of revolving credit facility
Repurchase of common shares
Repayments of bank overdrafts
Other financing activities
Intra-entity activity, net
(4.6)
(4.9)
Net cash used in financing activities
(4.6)
(4.9)
Cash and cash equivalents at beginning of period
0.1 
0.1 
Decrease in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period
0.1 
0.1 
Term Loan
 
 
Financing activities
 
 
Proceeds from term and bridge loans
350.0 
Repayments of debt
(365.7)
(12.0)
Term Loan |
Consolidation, Eliminations
 
 
Financing activities
 
 
Proceeds from term and bridge loans
 
Repayments of debt
Term Loan |
Guarantor Subsidiaries |
Reportable Legal Entities
 
 
Financing activities
 
 
Proceeds from term and bridge loans
350.0 
 
Repayments of debt
(365.7)
(12.0)
Term Loan |
Non-Guarantor Subsidiaries |
Reportable Legal Entities
 
 
Financing activities
 
 
Proceeds from term and bridge loans
 
Repayments of debt
 
Term Loan |
Signet Jewelers Limited |
Reportable Legal Entities
 
 
Financing activities
 
 
Proceeds from term and bridge loans
 
Repayments of debt
Term Loan |
Signet UK Finance plc |
Reportable Legal Entities
 
 
Financing activities
 
 
Proceeds from term and bridge loans
 
Repayments of debt
Securitization facility
 
 
Financing activities
 
 
Repayments of debt
(2,345.9)
(1,837.1)
Securitization facility |
Consolidation, Eliminations
 
 
Financing activities
 
 
Repayments of debt
Securitization facility |
Guarantor Subsidiaries |
Reportable Legal Entities
 
 
Financing activities
 
 
Repayments of debt
Securitization facility |
Non-Guarantor Subsidiaries |
Reportable Legal Entities
 
 
Financing activities
 
 
Repayments of debt
(2,345.9)
(1,837.1)
Securitization facility |
Signet Jewelers Limited |
Reportable Legal Entities
 
 
Financing activities
 
 
Repayments of debt
Securitization facility |
Signet UK Finance plc |
Reportable Legal Entities
 
 
Financing activities
 
 
Repayments of debt
$ 0 
$ 0