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A Sparkling Performance: Key Investor Guide to Signet Jewelers

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Business overview

Signet Jewelers Limited (SIG) is the world’s largest retailer of diamond jewelry. The company operates through its 100% owned subsidiaries with a presence in the United States, the United Kingdom, and Canada. Signet operates approximately 3,600 stores under the following name brands:

  • Kay Jewelers
  • Zales
  • Jared The Galleria of Jewelry
  • H. Samuel
  • Ernest Jones
  • Peoples
  • Piercing Pagoda

Signet generates its revenue from the retailing of jewelry, watches, and associated services. The company’s sales are seasonal, with its fourth quarter accounting for almost 40% of its total annual revenue, and all other quarters accounting for approximately 20% each.

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Financial performance

For the fiscal year ending January 31, 2015, or fiscal 2015, Signet saw revenues of $5.7 billion and an EBITDA (earnings before interest, tax, depreciation, and amortization) margin of 12.66%. Over the last five years, Signet has achieved a CAGR (compounded annual growth rate) of 11.9% in sales and 14.2% in EBITDA.

Signet’s increase in revenue in fiscal 2015 was due to the company’s acquisition of Zale Corporation. You can read more about Signet’s Zale division in Part 4 of this series.

Stock price performance

As of November 16, 2015, Signet’s stock had a market cap of $10.9 billion and price of $138.65. In fiscal 2015, Signet’s price appreciated by 5.8%, with total returns of 7.5%.

The company is a component of the S&P 500 Index (SPY) and has exposure in the SPDR S&P Retail ETF (XRT). Signet has a weight of ~1% in XRT.

In this series, we’ll analyze the company’s business fundamentals and investment valuation, comparing the company’s performance to other giants in the industry like Tiffany & Company (TIF) and Fossil Group (FOSL).

Continue to the next part of this series for a breakdown of Signet’s divisions and product offerings.

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