Facets of 2017

Celebrate Life.
Express Love.®

“In Fiscal 2017, we continued to generate strong cash flows and were able to return significant capital to you, our shareholders, by delivering superior products and services with a Customer First mindset.” Mark Light Chief Executive Officer

Signet’s mission is to help our customers Celebrate Life and Express Love.

It is our honor to help our customers express their deepest emotions in celebrating life’s special occasions. We do this by educating and assisting them in purchasing high quality jewelry and watches as gifts for their loved ones. We are able to do this because we buy, sell, and market diamonds and fine jewelry better than anyone else in the world. Our people are essential to achieving this purpose. They have made us an industry leader, and our Customer First commitment is one of the many ways in which we have made a profound impact in the jewelry industry.


Dear Shareholders,

Fiscal 2017 was a challenging year for most retailers and Signet Jewelers was no exception as we experienced declining sales for the first time since the recession of 2008-2009. Despite this decline in sales, we delivered solid EPS growth and operating margin expansion through a combination of disciplined operating expense management and share buybacks.

We also continued to generate strong cash flows and were able to return significant capital to you, our shareholders, by delivering superior products and services with a Customer First mindset. Additionally, we achieved our target annual synergies from the Zale acquisition which helped protect us against a notable slowdown in retail.

In addition to challenges on the retail and commercial fronts, Signet was the focus of comments from various quarters on its quality control, credit business, and workplace practices. While no one and no company is perfect, we believe these comments do not reflect the nature of our Company practices and culture. However, in the spirit of continuous improvement which is a hallmark of our culture, we have sought to learn and improve from these comments. We believe the results are manifest as described in the list of accomplishments below.

At Signet, we recognize that doing the right thing creates value for our employees and their families, our customers, the communities in which we do business and our shareholders. We have been acting consistently on that strategy for more than 100 years! Again, as you read the list of accomplishments on this front related to Fiscal Year 2017, we think you will agree that we are consistent and resilient in this aim.

About Last Year

That said, we acknowledge that in Fiscal 2017 our financial results did not meet our expectations due to a combination of macroeconomic, industry, and company-specific reasons:

  • At a macro level, low energy prices had a lagging unfavorable impact on jewelry spending in energy dependent regional economies (e.g. Texas) during most of Fiscal 2017.
  • The jewelry industry slowed as broader retail sales were pressured in part by declining mall traffic and heightened competition among all retailers for fewer customers. Additionally, the promotional environment was further intensified as independent jewelers were forced to close at levels unseen, since the recession and liquidate inventories at deep discounts.
  • At the company level, our Jared store brand underperformed as we worked to update and improve upon its customer journey execution, marketing message, and merchandise distinctiveness. In addition, a combination of technical infrastructure limitations and search engine optimization issues negatively impacted Jared and Kay’s online performance during the holiday season.


Diluted Earnings Per Share

Chart of Diluted Earnings per Share - FY 2012: 3.73 - FY 2013: 4.35 - FY 2014: 4.56 - FY 2015: 5.87 - FY 2016: 7.08

While Fiscal 2017 certainly had its challenges, we remain confident in our future. Over the past 25 years, while still experiencing cyclical dips every six or seven years, the U.S. jewelry industry has grown at a compound annual growth rate of 4%. Over the last five years Signet experienced a compound annual growth rate in sales of 15% -- significantly above the category.

The progress we made against our strategic priorities in Fiscal Year 2017 combined with the resiliency of the jewelry industry and the solid foundation we have built at Signet, which has proven true throughout cycles, is a clear indication that our Customer First strategy is the right way forward.

During the year, Signet delivered some important accomplishments.

  • Key merchandise brands and categories, such as Ever Us, Neil Lane, Vera Wang LOVE, Endless Brilliance, and Chosen, plus bracelets, necklaces, and earrings, performed very well. Additionally, Piercing Pagoda, our kiosk concept located in malls, had a 6.6% same store sales increase led by diamond jewelry and 14 karat gold. Our Kay stores off-mall performed relatively well too.
  • Good expense management helped us deliver operating margin expansion of 120 basis points.
  • We generated free cash flow of $400 million, representing a $184 million increase over last year. We delivered on our synergy targets from the Zale acquisition and improved our operational efficiency which helped protect us against a notable slowdown in retail.
  • Ending inventory was flat due principally to prudent management including the realization of big improvements within Zale’s merchandise portfolio.
  • We returned significant capital to our shareholders through dividends and share repurchases and, for the sixth year in a row, we increased our quarterly dividend. We ended the year with substantial liquidity and an attractive dividend yield.
  • We received a $625 million strategic investment from the well-regarded investment firm Leonard Green & Partners. The transaction was a significant vote of confidence in the Signet operating model and our long-term prospects for growth.
  • Following our comprehensive review of our credit portfolio, we determined the optimal path forward would be to outsource it. At the time of publication of this letter, we are deeply engaged in negotiations with potential partners and look forward to updating you on the process in the upcoming year.
  • We released our Fiscal 2017 Corporate Social Responsibility (CSR) Report that benchmarks Signet’s industry-leading responsible sourcing and global CSR initiatives. This report underscores our achievements to this point and inspires our commitment to becoming better corporate citizens every day.
  • Signet’s Responsible Sourcing Protocol for Diamonds was launched, requiring suppliers to be in full auditable compliance in 2017. The Protocol is another protection to ensure due diligence on the source of all diamonds delivered to Signet.
  • Since the end of the fiscal year, we finalized the formation of a Special Committee of the Board focused on Respect in the Workplace, further demonstrating our focus and commitment to fair, equal opportunity, integrity and respect in the workplace.

Extensive Customer First OmniChannel Focus


Chart of Sales - Zales: $1,257m / 19% - Jared: $1,228m / 18% - Kay: $2,540m / 39% - All Others: $1,383m / 21%

We remain resolutely focused on addressing our challenges and making improvements for the future building on the solid foundations of our Customer First strategy, our industry-leading talent and best-in-class customer experience. As customers shift towards online channels, Signet is responding to the change by enhancing our capabilities to succeed in this evolving retail landscape.

Going forward, we will continue to sharpen our focus on the mid-market jewelry customer and improving our growth trajectory through a broader and deeper OmniChannel emphasis. Our digital marketing and online presence is more pronounced than ever, and we are continuing to invest in and direct more resources to improve the key elements of the overall customer digital journey. We realigned our executive organizational structure around this imperative, creating a new role of President and Chief Customer Officer, and strengthened our board of directors to enhance our focus on delivering an outstanding multi-channel experience to customers.

Building on this momentum, in Fiscal 2018, we are focused on the following:

  • Immediately improving the customer experience of our Sterling division websites. Technical enhancements are underway. For example, we expect page load speeds to be cut in half as compared to the holiday season – and in-line with retail norms – by Mother’s Day.
  • We have a renewed and targeted focus to improve online traffic. For example, our site architecture enhancements will improve the search engine optimization ranking. And, we will enhance the content of our sites and increase user-generated content.
  • In the summer, the new Zales eCommerce platform will launch. This has been part of our technology upgrade plan for some time and will provide a better user experience and a more efficient operating model for the company.
  • This year, we are substantially increasing investment in digital marketing especially in search. We are investing in enhanced data analytics to achieve a comprehensive view of our current and future customers. We believe we have one of the largest jewelry customer file of emails, customer profiles, and more. We use this information, as well as valuable credit data, to be smart digital marketers.
  • Additional technology investments will be tested this year to enhance the customer journey and experience such as online wish lists and bridal configurators.
  • We will deliver on our commitment to create value through responsibility by becoming better corporate citizens every day.

Going forward, we will be increasingly focused on building a best-in-class digital ecosystem that is able to provide a premier customer experience at every digital touchpoint, exceeding the needs of our customers no matter how, when, and where they wish to engage with us.

Business Opportunities

Signet Store Count

Chart of Signet Store Count - Zales: 751 - H.Samuel: 304 - Jared: 275 - Ernest Jones: 204 - Peoples: 143 - Piercing Pagoda: 616 - Kay: 1192 - Other: 197

In additional to our focus on the delivery to an OmniChannel customer, we have additional initiatives underway to drive growth in Fiscal 2018:

  • From a merchandise perspective, innovation remains a top priority. We have fresh, new merchandise line extensions and redesigns of our best-selling collections. We are building upon successful trends by devoting more resources and store space to hot categories. At the same time, our pipeline of new ideas is full with strong candidates being tested today for possible holiday season rollout.
  • Our clienteling (personalized selling system), which had a great launch in Kay and Jared late last year, should help us generate incremental sales this year and long term across store brands. The electronic tools enable our teams to interact with our customers more intelligently based on customers’ previous purchases and special life occasions.
  • Continued investments in information technology modernization will provide the backbone for operational efficiencies. We expect to implement an enterprise wide finance system, human resource system, and the North American warehouse management system that will enable us to consolidate the Dallas distribution center with Akron.
  • We will improve store operations execution by gathering more useful data about customers’ experiences that will drive action to improve our customer conversion.

Capital Spending and Capital Allocation

In Fiscal 2018, we will continue to prioritize investments in information technology to improve our digital customer experience and create a seamless online experience. We are also implementing key new technology platforms in finance and human resources to better integrate our global enterprise.

At the same time, our capital expenditure expectations are below the prior year. We will reduce our annual spending on new and remodeled stores and will continue to take a disciplined approach to optimize our store footprint to better align with dynamic consumer shopping behavior.

We will accelerate store closings especially within our regional banners to improve the overall profitability of our store base. New store openings will continue to focus on Kay off-mall centers where we have a higher internal rate of return. These actions should favorably mix our diversified real estate portfolio between mall and off-mall locations.

Signet maintains a balanced approach to investing in the growth of its business, as well as returning capital to our shareholders via a growing dividend and share repurchases.

In Closing

On behalf of the Board of Directors and our global team, we thank you for your loyalty and commitment to Signet Jewelers. We value the privilege to be stewards of your investment. Together, we look forward to a year of success helping our customers to Celebrate Life and Express Love.

Signature - H. Todd Stitzer H. Todd Stitzer Chairman
Signature - Mark Light Mark Light Chief Executive Officer

Number 1 in Specialty Jewelry Markets

Our Store Brands



Kay is the largest specialty retail jewelry store brand in the US based on sales. Kay targets middle market customers in the US who are considered style seekers and gifters. Style seekers are customers who seek to express their personal style through affordable and tasteful jewelry from acknowledged designers and brands. Gifters are customers who need assistance with selecting the perfect piece of jewelry as a gift. Kay accounted for 40% of Signet’s sales in Fiscal 2017 and operated 1,192 stores in 50 states as of January 28, 2017.

Kay storefront


Zales operates primarily in shopping malls and targets middle market customers who are considered influencers. Influencers look forward to buying jewelry for others as well as for themselves. They are aware of and care about merchandise brands. They use jewelry to show status. Zales is positioned as “The Diamond Store” given its emphasis on diamond jewelry, especially in bridal and fashion. Zales accounted for 20% of Signet’s sales in Fiscal 2017 and operated a total of 751 stores, including 744 stores in 50 states and 7 stores in Puerto Rico as of January 28, 2017.

Zales storefront


Jared is a leading off-mall destination specialty retail jewelry store chain serving upper middle market customers who seek to express their love and appreciation of the people in their lives with high quality, sentimental gifts. Jared accounted for 19% of Signet’s sales in Fiscal 2017 and operated 275 stores in 41 states as of January 28, 2017. Jared locations are normally free-standing sites with high visibility and traffic flow.

Jared storefront


H.Samuel is the #1 specialty jewelry brand in the UK by number of stores and targets the middle market. H.Samuel accounted for 5% of Signet’s sales in Fiscal 2017 and operated 304 stores as of January 28, 2017.

Ernest Jones

Ernest Jones is the leading upper­middle market jeweler in the UK by number of stores. Ernest Jones accounted for 5% of Signet’s sales in Fiscal 2017 and operated 204 stores as of January 28, 2017.


Peoples is positioned as “Canada’s #1 Diamond Store” emphasizing its diamond business while also offering a wide selection of gold jewelry, gemstone jewelry, and watches. Peoples accounted for 3% of Signet’s sales in Fiscal 2017 and operated 143 stores in nine provinces in Canada as of January 28, 2017.

Piercing Pagoda

Piercing Pagoda operates through mall-based kiosks in the US and Puerto Rico and serves fashion conscious customers of all ages with a focus on the opening price point customer. Piercing Pagoda accounted for 4% of Signet’s sales in Fiscal 2017 and operated a total of 616 stores, including 609 stores in 41 states and 7 stores in Puerto Rico as of January 28, 2017.

Vision and Strategy 2020 and Beyond

Our vision: Be the world’s premier jeweler by relentlessly connecting with customers, earning their trust with every interaction everywhere.

Customer First OmniChannel Experience

Vision and Strategy


2020 and Beyond

Grow In The Mid Market

Signet does business principally in the midmarket jewelry segment. It is our goal to be the leading retailer and to maximize our business directed to mid-market consumers everywhere we do business. The mid-market, in contrast to the luxury and costume jewelry markets, represents our largest growth opportunity. The US total jewelry market is nearly $80 billion. We believe the mid-market accounts for about half of this.

Ring by Ever Us Couple hugging

2020 and Beyond

Best in Bridal

We believe bridal is the closest thing in our industry to a necessity. Bridal is a resilient category and continues to account for approximately 50% of our merchandise sales on an annual basis. We want to be the destination for bridal and to make every guest think about our store brands first when they enter the bridal jewelry marketplace. We have a broad selection of bridal programs which include Neil Lane Bridal, Vera Wang Love, Tolkowsky, the Leo Diamond, and non-branded lines. We are vertically integrated doing business in all parts of the diamond supply chain. We have a diamond liaison office in India, a diamond polishing factory in Botswana, and a design center office in New York. We are also a preferred customer with several leading mines, which helps us source our stores for the long term with the diamonds our customers desire.

Ring by Neil Lane Happy couple

2020 and Beyond

Win Fashion and Gifting

Fashion jewelry and the female shopper are critical to our business. We are focused much more on women customers and the fashion- oriented products that are attractive to females as self-purchasing continues to increase. Our merchandising team is identifying and testing key fashion trends in fine jewelry especially in more affordable price points. We continue to innovate and lean into winning trends and categories such as bolo bracelets, bangles, stackables, ring layering, necklaces, fashion earrings, and studs. We are emphasizing winning with millennials through the products we sell, the channels through which we market, and the messages we communicate.

Rings Two women talking

2020 and Beyond

Digital First and Data Driven

Operating in an evolving retail landscape requires a strategic focus on digital channels and interaction with our guests through a number of media to support our strategic pillar of “Digital First and Data Driven.” Our Customer First OmniChannel approach to educating, selling, and serving of customers is uniquely important in jewelry retail because the purchase of jewelry is personal, intimate, and typically viewed as an important experience. The Internet often represents the first interaction a customer or prospective guest will have with us when a jewelry-buying occasion arises. As trust is the most important factor in why people buy jewelry where they do, customers overwhelmingly complete their purchases in our stores with our trusted knowledgeable sales associates. We continue to place increasing emphasis on data analytics to support our interactions with customers, enable our sales associates, and optimize all aspects of our business. Being best in digital and data driven is a crucial step of our OmniChannel approach.

Ring by Vera Wang Couple Talking to Employee

2020 and Beyond

People, Purpose and Passion

We continue to attract, develop, and retain the best and the brightest individuals in the jewelry and watch industry. Our people are our most valuable assets. In our business, the quality of service is a key competitive factor as nearly every in-store transaction involves team members taking a piece of jewelry out of a display case and presenting it to potential customers. We strive to promote a culture of diversity and collaboration in the workplace to better serve our customers and drive our Company to success. The importance of recruiting and training cannot be overstated. We have the best and most complete training programs in the industry — from one-on-one coaching to multi- day offsite conferences. Our managers are certified diamontologists. We have a customer-driven culture in which our team members are rewarded for driving loyalty and satisfaction. We are essentially a ‘people’ business that sells jewelry.

Ring Couple shopping for a ring

Signet's CSR Pillars

Corporate Social Reponsibility


Corporate Social Responsibility

At Signet we recognize that doing the right things creates value for our employees and their families, our customers, our communities, and our shareholders.

We have been acting on that understanding for more than 100 years and have therefore made our Corporate Social Responsibility efforts an integral part of our global business strategy.

Signet pursues goals and priorities organized around four pillars where we believe we can have significant impact: People, Responsible Sourcing, Environmental Stewardship, and Charitable Giving. We strive to be a leader in making a positive difference in the communities, worldwide, where our Team Members live, work, and do business.

“We live our mission every day through the jewelry we sell and by putting our values into action. Our focus on these values ensures that our jewelry is sourced and made responsibly, we continue our long tradition of giving back to the communities where we live and work, we incorporate environmentally responsible best practices, and we champion our Team Members.” Mark Light Chief Executive Officer
Signets CSR Pillars - Creating Value Through Responsibility. People - Responsible Sourcing - Environmental Stewardship - Charitable Giving

We Live Our Words

Our Core Values


Core Values

We Live Our Words

We Get What We Give

When we live our Core Values, we receive financial rewards and recognition. We’re recognized by and earn deeper respect from our peers. And, we’re given the opportunity to grow professionally through career development and advancement. Our success creates a continuous cycle of benefits for everyone, our Team, our shareholders, the communities where we live and work, and to which we give back.

We Continuously Improve

We’re always looking for better ways to evolve our performance....it’s continuous improvement in action. We’re constantly building in this open, dynamic environment, challenging each other to produce even greater results for our organization, our Team Members and our customers.

We’re Honest and Considerate with Our Words

We say what we mean. We mean what we say. And we do it in a respectful manner. The result creates welcome and helpful dialog that’s shared by everyone in our organization. It’s the way we get things done.

We Do the Right Thing...Even When No One is Looking

Integrity, quite honestly, is a matter of respect. It’s respect for ourselves and who we are as individuals. It’s respect for our colleagues, our organization, our partners and our customers....just plain everyone.

We Put Ourselves in Our Customers’ Shoes

Quite simply, we treat our customers exactly how we want to be treated. Of course we insist on a good selection of quality products, competitively priced. And if we needed help, we’d want problem-solving service, whether big or small. We recognize that what’s important to us, is just as important to our customers.

We Know How Our Customers Feel about Jewelry

Because a jewelry purchase is one of the most important emotional purchases a person can make, it’s up to us to make sure that customers know they can rely on us all throughout their shopping journey. We handle them with care.

We Believe Collaboration Creates Success

Diverse, dedicated, one-of-a-kind individuals come together to make up our organization. We’re united in one goal: to provide our customers with the absolute best jewelry-buying experience and Team Member experience. We collaborate and work as a team, because we know that together we can achieve more.

We are Passionate about Our Profession

We constantly train and learn, grow our knowledge, deepen our confidence, all to be the best for our customers and each other. We believe that’s what defines a professional. And that’s the kind of care and treatment our customers and our fellow Team Members deserve.


Facets of 2017

Financial Highlights


2017 Financial Growth Highlights

financial data

Total Shareholder Return

Chart - Total Shareholder Return

Signet Operating Margin

Chart - Signet Operating Margins

Signet Adjusted Operating Margin

Chart - Signet Adjusted Operating Margins

Adjusted operating margin excludes the impact of
purchase accounting, integration, and severance costs.

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