Signet Jewelers Limited (SIG) has reported a 30.14 percent jump in profit for the quarter ended Jan. 31, 2015. The company has earned $228 million, or $2.84 a share in the quarter, compared with $175.20 million, or $2.18 a share for the same period last year. On an adjusted basis, the company has earned $245.60 million, or $3.06 a share for the quarter.
Revenue during the quarter surged 45.55 percent to $2,276.40 million from $1,564 million in the previous year period. Gross margin for the quarter contracted 142 basis points over the previous year period to 40.07 percent. Total expenses were 85.43 percent of quarterly revenues, up from 82.70 percent for the same period last year. That has resulted in a contraction of 273 basis points in operating margin to 14.57 percent.
Operating income for the quarter was $331.70 million, compared with $270.60 million in the previous year period.
However, the adjusted operating profit for the quarter stood at $361.70 million.
Mark Light, chief executive officer of Signet, said, "We had an outstanding finish to another strong year of growth for Signet. The disciplined execution of our focused strategies drove broad-based success across all of our divisions and store brands. For the quarter, we delivered a 4.2% increase in same store sales, EPS of $2.84, and adjusted EPS of $3.06 -- an increase of 40.4%. For the year, we generated a 4.1% same store sales increase which led to EPS of $4.75 and adjusted EPS of $5.63 -- an increase of 23.5%.
On an adjusted basis, the company projects diluted earnings per share to be in the range of $1.57 to $1.62 for the first-quarter.
Operating cash flow improves
Signet Jewelers Limited has generated cash of $283 million from operating activities during the year, up 20.17 percent or $47.50 million, when compared with the last year. The company has spent $1,652.60 million cash to meet investing activities during the year as against cash outgo of $160.40 million in the last year.
Cash flow from financing activities was $1,320.90 million for the year as against cash outgo of $124.80 million in the last year period. It has made net debt repayment of $1,427 million. It has spent net of $23.70 million on repurchase of common stocks.
Cash and cash equivalents stood at $193.60 million as on Jan. 31, 2015, down 21.81 percent or $54 million from $247.60 million on Feb. 01, 2014.
Working capital increases sharply
Signet Jewelers Limited has recorded an increase in the working capital over the last year. It stood at $3,069 million as at Jan. 31, 2015, up 30.21 percent or $712.10 million from $2,356.90 million on Feb. 01, 2014. Current ratio was at 3.29 as on Jan. 31, 2015, down from 3.62 on Feb. 01, 2014.
Debt increases substantially
Signet Jewelers Limited has witnessed an increase in total debt over the last one year. It stood at $1,461.30 million as on Jan. 31, 2015, up 7,471.50 percent or $1,442 million from $19.30 million on Feb. 01, 2014. Long-term debt stood at $1,363.80 million as on Jan. 31, 2015. Total debt was 23.09 percent of total assets as on Jan. 31, 2015, compared with 0.48 percent on Feb. 01, 2014. Debt to equity ratio was at 0.52 as on Jan. 31, 2015, up from 0.01 as on Feb. 01, 2014. Interest coverage ratio decreased to 41.99 for the quarter from 225.50 for the same period last year.
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