LONDON, UK / ACCESSWIRE / September 15, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Signet Jewelers Ltd (NYSE: SIG), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SIG, following the Company's announcement of its financial results on August 24, 2017, for the second quarter fiscal 2018. The world's largest retailer of diamond jewelry reported that net revenue increased 1.9% on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For three months ended July 29, 2017, Signet Jewelers' net revenue increased 1.9% to $1.40 billion from $1.37 billion in Q2 FY17. During Q2 FY18, the Company's same store sales growth was positive 1.4% compared to negative 2.3% in Q2 FY17. Net revenue surpassed analysts' expectations of $1.34 billion.

During Q2 FY18, Signet Jewelers' gross profit decreased 1.5% to $457.9 million from $464.9 million in Q2 FY17. During Q2 FY18, the Company's gross margin decreased 120 basis points to 32.7% of revenue, from 33.9% of revenue in Q2 FY17. The decrease was due to a strategic shift in promotional activity, which led to lower merchandise margins.

During Q2 FY18, Signet Jewelers' selling, general, and administrative (SG&A) expenses decreased 1.6% to $409.0 million from $415.7 million in Q2 FY17.

For the reported quarter, the Company's operating income increased 13.1% to $135.6 million from $119.9 million in Q2 FY17. For the reported quarter, Signet Jewelers' operating margin increased 100 basis points to 9.7% of revenue from 8.7% of revenue in Q2 FY17.

During Q2 FY18, Signet Jewelers' net income increased 14% to $93.4 million from $81.9 million in Q2 FY17. During Q2 FY18, Signet Jewelers' diluted EPS increased 25.5% to $1.33 from $1.06 in Q2 FY17. The diluted EPS surpassed analysts' expectations of $1.06.

During Q2 FY18, Signet Jewelers' repurchased 8.1 million shares for $460.0 million.

On August 24, 2017, the Company's Board of Directors declared a cash dividend of $0.31 per share payable on November 30, 2017, to shareholders of record on October 27, 2017, with an ex-dividend date of October 26, 2017.

On September 12, 2017, the Company completed the acquisition of R2Net, the owner of fast-growing online jewelry retailer JamesAllen.com and Segoma Imaging Technologies.

Signet Jewelers' Segment Details

Sterling Jewelers - During Q2 FY18, Sterling Jewelers segment's net revenue increased 3.4% to $868.1 million on a y-o-y basis. The segment's operating margin increased 160 basis points to 18.4% of revenue from 16.8% of revenue in Q2 FY17.

Zale Jewelers - During Q2 FY18, Zale Jewelers segment's net revenue increased 1.6% to $394.1 million on a y-o-y basis. The segment's operating margin increased 50 basis points to 0.6% of revenue from 0.1% of revenue in Q2 FY17.

UK Jewelers - During Q2 FY18, UK Jewelers segment's net revenue decreased 9.2% to $131.9 million on a y-o-y basis. The segment's operating margin increased 50 basis points to 1.7% of revenue from 1.2% of revenue in Q2 FY17.

Balance Sheet

As on July 29, 2017, Signet Jewelers' cash and cash equivalents decreased 34 basis points to $119.1 million from $118.7 million in Q2 FY17. During Q2 FY18, the Company's net accounts receivable decreased 59.7% to $664.5 million from $1.65 billion in Q2 FY17.

For the reported quarter, the Company's inventories decreased 5.6% to $2.28 billion from $2.42 billion in Q2 FY17. During Q2 FY18, Signet Jewelers' accounts payable decreased 24% to $148.2 million from $195.1 million in Q2 FY17.

For the reported quarter, the Company's long-term debt decreased 47% to $705.3 million compared to $1.33 billion in Q2 FY17. During H1 FY18, the Company's cash provided by operating activities was $409.8 million compared to $309.2 million in the same period last year.

For the reported quarter, the Company's YTD free cash flow was $304 million compared to $208 million in the same period last year.

Outlook

For FY18, Signet Jewelers expects diluted EPS to be in the range of $7.16 to $7.56 and capital expenditure to be in the range of $260 million to $275 million.

The Company estimates effective tax rate to be 24% for fiscal 2018.

Stock Performance

On Thursday, September 14, 2017, the stock closed the trading session at $68.88, marginally up 0.22% from its previous closing price of $68.73. A total volume of 1.73 million shares have exchanged hands. Signet Jewelers' stock price surged 28.58% in the last one month, 14.97% in the past three months, and 0.03% in the previous six months. The stock is trading at a PE ratio of 11.17 and has a dividend yield of 1.80%. The stock currently has a market cap of $4.39 billion.

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