SIGNET JEWELERS LTD, 10-Q filed on 11/20/2012
Quarterly Report
Document and Entity Information
9 Months Ended
Oct. 27, 2012
Nov. 15, 2012
Document Information [Line Items]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Oct. 27, 2012 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q3 
 
Trading Symbol
SIG 
 
Entity Registrant Name
SIGNET JEWELERS LTD 
 
Entity Central Index Key
0000832988 
 
Current Fiscal Year End Date
--02-02 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
80,987,709 
Condensed Consolidated Income Statements (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Sales
$ 716.2 
$ 710.5 
$ 2,470.1 
$ 2,395.4 
Cost of sales
(480.8)
(480.6)
(1,569.8)
(1,521.0)
Gross margin
235.4 
229.9 
900.3 
874.4 
Selling, general and administrative expenses
(222.6)
(219.6)
(727.4)
(707.9)
Other operating income, net
39.7 
32.2 
119.9 
97.0 
Operating income
52.5 
42.5 
292.8 
263.5 
Interest expense, net
(0.9)
(0.4)
(2.5)
(3.8)
Income before income taxes
51.6 
42.1 
290.3 
259.7 
Income taxes
(16.7)
(16.0)
(102.2)
(91.9)
Net income
$ 34.9 
$ 26.1 
$ 188.1 
$ 167.8 
Earnings per share: basic
$ 0.43 
$ 0.30 
$ 2.27 
$ 1.94 
Earnings per share: diluted
$ 0.43 
$ 0.30 
$ 2.26 
$ 1.93 
Weighted average common shares outstanding: basic
80.5 
86.3 
82.9 
86.2 
Weighted average common shares outstanding: diluted
80.9 
87.1 
83.4 
87.0 
Dividends declared per share
$ 0.12 
$ 0.10 
$ 0.36 
$ 0.10 
Condensed Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Net income
$ 34.9 
$ 26.1 
$ 188.1 
$ 167.8 
Other comprehensive income:
 
 
 
 
Foreign currency translation adjustments
4.5 
(4.6)
6.4 
3.1 
Changes in fair value of derivative instruments, net of tax of $1.5 and $8.6, respectively (October 29, 2011: $4.8 and $14.5, respectively)
2.4 
9.6 
(16.1)
25.8 
Pension plan adjustments, net of tax of $0.1 and $0.3, respectively (October 29, 2011: $0.4 and $0.6, respectively)
0.4 
0.1 
1.2 
0.7 
Comprehensive income
$ 42.2 
$ 31.2 
$ 179.6 
$ 197.4 
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Changes in fair value of derivative instruments, tax
$ 1.5 
$ 4.8 
$ 8.6 
$ 14.5 
Pension plan adjustments, tax
$ 0.1 
$ 0.4 
$ 0.3 
$ 0.6 
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Oct. 27, 2012
Jan. 28, 2012
Oct. 29, 2011
Current assets:
 
 
 
Cash and cash equivalents
$ 166.0 
$ 486.8 
$ 349.6 
Accounts receivable, net
998.2 
1,088.2 
891.2 
Other receivables
44.6 
44.3 
27.5 
Other current assets
59.7 
92.0 
97.7 
Deferred tax assets
1.6 
0.9 
0.4 
Inventories
1,508.5 
1,304.1 
1,414.0 
Total current assets
2,778.6 
3,016.3 
2,780.4 
Non-current assets:
 
 
 
Property and equipment, net of accumulated depreciation of $715.3, $681.0, and $678.0, respectively
416.0 
383.4 
385.8 
Other assets
71.5 
71.7 
63.1 
Deferred tax assets
113.5 
108.5 
102.2 
Retirement benefit asset
41.5 
31.5 
32.6 
Total assets
3,421.1 
3,611.4 
3,364.1 
Current liabilities:
 
 
 
Loans and overdrafts
 
 
33.6 
Accounts payable
216.2 
182.6 
195.1 
Accrued expenses and other current liabilities
266.5 
308.4 
261.7 
Deferred revenue
149.1 
154.1 
135.5 
Deferred tax liabilities
138.1 
135.0 
108.3 
Income taxes payable
16.7 
77.9 
30.0 
Total current liabilities
786.6 
858.0 
764.2 
Non-current liabilities:
 
 
 
Other liabilities
107.5 
100.3 
97.4 
Deferred revenue
376.9 
374.0 
354.3 
Total liabilities
1,271.0 
1,332.3 
1,215.9 
Commitments and contingencies
   
   
   
Shareholders' equity:
 
 
 
Common shares of $0.18 par value: authorized 500 shares, 81.0 shares outstanding (January 28, 2012: 86.9 shares outstanding; October 29, 2011: 86.9 shares outstanding)
15.7 
15.6 
15.6 
Additional paid-in capital
235.1 
230.9 
217.2 
Other reserves
235.2 
235.2 
235.2 
Treasury shares at cost: 6.2 shares (January 28, 2012: 0.3 shares; October 29, 2011: 0.0 shares)
(276.8)
(12.7)
 
Retained earnings
2,108.6 
1,969.3 
1,821.4 
Accumulated other comprehensive loss
(167.7)
(159.2)
(141.2)
Total shareholders' equity
2,150.1 
2,279.1 
2,148.2 
Total liabilities and shareholders' equity
$ 3,421.1 
$ 3,611.4 
$ 3,364.1 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
Oct. 27, 2012
Jan. 28, 2012
Oct. 29, 2011
Property, plant and equipment, accumulated depreciation
$ 715.3 
$ 681.0 
$ 678.0 
Common shares, par value
$ 0.18 
$ 0.18 
$ 0.18 
Common shares, authorized
500 
500 
500 
Common shares, outstanding
81.0 
86.9 
86.9 
Treasury shares, shares
6.2 
0.3 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Cash flows from operating activities
 
 
 
 
Net income
$ 34.9 
$ 26.1 
$ 188.1 
$ 167.8 
Adjustments to reconcile net income to cash (used in)/provided by operating activities:
 
 
 
 
Depreciation and amortization of property and equipment
23.7 
22.3 
70.4 
67.3 
Pension
(2.5)
(2.7)
(7.9)
(8.3)
Share-based compensation
4.3 
5.3 
11.4 
12.3 
Deferred taxation
18.8 
4.6 
6.0 
2.2 
Facility amendment fees amortization and charges
0.1 
0.1 
0.3 
1.7 
Other non-cash movements
(0.3)
(0.5)
(1.7)
(1.0)
Loss on disposal of property and equipment
 
0.1 
 
0.1 
Changes in operating assets and liabilities:
 
 
 
 
Decrease in accounts receivable
34.2 
15.4 
90.3 
44.7 
(Increase)/decrease in other receivables and other assets
(3.4)
2.5 
(0.3)
8.6 
Decrease/(increase) in other current assets
13.7 
(5.0)
20.9 
3.4 
Increase in inventories
(190.6)
(205.0)
(207.8)
(211.5)
Increase in accounts payable
79.1 
49.4 
32.6 
60.2 
Increase/(decrease) in accrued expenses and other liabilities
13.5 
28.1 
(39.5)
(17.7)
Decrease in deferred revenue
(1.2)
(5.4)
(2.1)
(9.4)
Decrease in income taxes payable
(40.1)
(14.5)
(61.0)
(8.4)
Effect of exchange rate changes on currency swaps
(0.8)
0.7 
0.5 
1.6 
Net cash (used in)/provided by operating activities
(16.6)
(78.5)
100.2 
113.6 
Investing activities
 
 
 
 
Purchase of property and equipment
(46.1)
(34.7)
(100.9)
(73.0)
Net cash used in investing activities
(46.1)
(34.7)
(100.9)
(73.0)
Financing activities
 
 
 
 
Dividends
(9.6)
 
(28.6)
 
Proceeds from exercise of share options
2.6 
1.2 
8.0 
5.6 
Repurchase of common shares
 
 
(287.2)
 
Net settlement of equity based awards
(0.3)
 
(11.1)
 
Credit facility fees paid
 
(0.1)
 
(1.7)
Proceeds from short-term borrowings
 
20.7 
 
2.4 
Net cash (used in)/provided by financing activities
(7.3)
21.8 
(318.9)
6.3 
Effect of exchange rate changes on cash and cash equivalents
(1.5)
0.8 
(1.2)
0.6 
Cash and cash equivalents at beginning of period
237.5 
440.2 
486.8 
302.1 
(Decrease)/increase in cash and cash equivalents
(70.0)
(91.4)
(319.6)
46.9 
Cash and cash equivalents at end of period
$ 166.0 
$ 349.6 
$ 166.0 
$ 349.6 
Condensed Consolidated Statement of Shareholders' Equity (USD $)
In Millions
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, 2012
$ 2,279.1 
$ 15.6 
$ 230.9 
$ 235.2 
$ (12.7)
$ 1,969.3 
$ (159.2)
Net income
188.1 
 
 
 
 
188.1 
 
Foreign currency translation
6.4 
 
 
 
 
 
6.4 
Changes in fair value of derivative instruments, net
(16.1)
 
 
 
 
 
(16.1)
Pension plan, net
1.2 
 
 
 
 
 
1.2 
Dividend
(29.7)
 
 
 
 
(29.7)
 
Repurchase of common shares
(287.2)
 
 
 
(287.2)
 
 
Net settlement of equity based awards
(11.1)
 
(7.5)
 
15.5 
(19.1)
 
Share options exercised
8.0 
0.1 
0.3 
 
7.6 
 
 
Share-based compensation expense
11.4 
 
11.4 
 
 
 
 
Ending Balance at Oct. 27, 2012
$ 2,150.1 
$ 15.7 
$ 235.1 
$ 235.2 
$ (276.8)
$ 2,108.6 
$ (167.7)
Principal accounting policies and basis of preparation
Principal accounting policies and basis of preparation

1. Principal accounting policies and basis of preparation

Basis of preparation

Signet Jewelers Limited (“Signet” or the “Company”), including its subsidiaries, is a leading retailer of jewelry, watches and associated services. Signet manages its business as two geographical segments, the United States of America (the “US”) and the United Kingdom (the “UK”). The US division operates retail stores under brands including Kay Jewelers, Jared The Galleria Of Jewelry and various regional brands, while the UK division’s retail stores operate under brands including H.Samuel and Ernest Jones.

These condensed consolidated financial statements included herein have been 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 accounting principles generally accepted in the United States of America (“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 year ended January 28, 2012.

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 receivables, inventory and deferred revenue, fair value of derivatives, depreciation and asset impairment, the valuation of employee benefits, income taxes and contingencies.

Fiscal year

The Company’s fiscal year ends on the Saturday nearest to January 31st. Fiscal 2013 is the 53 week year ending February 2, 2013 and Fiscal 2012 is the 52 week year ended January 28, 2012. Within these financial statements, the third quarter and the year to date of the relevant fiscal years 2013 and 2012 refer to the 13 and 39 weeks ended October 27, 2012 and October 29, 2011, respectively.

Seasonality

Signet’s sales are seasonal, with the first and second quarters each normally accounting for slightly more than 20% of annual sales, the third quarter a little under 20% and the fourth quarter for about 40% of sales, with December being by far the most important month of the year. Sales made in November and December are known as the “Holiday Season.” Due to sales leverage, Signet’s operating income is even more seasonal; about 45% to 50% of operating income normally occurs in the fourth quarter, comprised of nearly all of the UK division’s and about 40% to 50% of the US division’s operating income.

New accounting pronouncements adopted during the period

Presentation of comprehensive income

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income” (ASU 2011-05). ASU 2011-05 eliminates the option to present components of other comprehensive income (“OCI”) as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. On December 23, 2011, the FASB issued ASU 2011-12, “Comprehensive Income (Topic 220) – Deferral of the Accumulated Other Comprehensive Income in ASU 2011-05” (ASU 2011-12) to defer the new requirement to present components of reclassifications of other comprehensive income on the face of the financial statements. ASU 2011-05 does not change the current option for presenting components of OCI gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is to be applied retrospectively, with early adoption permitted. Signet adopted this guidance effective for the first quarter ended April 28, 2012 and the implementation of this accounting pronouncement did not have any impact on Signet’s financial position or results of operations.

 

Fair value measurements and disclosures

In May 2011, the FASB issued ASU 2011-04, “Fair Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and International Financial Reporting Standards (“IFRS”).” FASB intends the new guidance to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS. The amended guidance changes certain fair value measurement principles and enhances the disclosure requirements, particularly for Level 3 assets and liabilities for which Signet will be required to disclose quantitative information about the unobservable inputs used in fair value measurements. The amendments are to be applied prospectively and are effective for annual periods beginning after December 15, 2011. Signet adopted this guidance effective for the first quarter ended April 28, 2012 and the adoption of this amendment did not have did not have any impact on Signet’s financial position or results of operations.

Reclassification

Signet has reclassified the presentation of certain prior year information to conform to the current year presentation.

Segment information
Segment information

2. Segment information

Signet’s sales are derived from the retailing of jewelry, watches, other products and services. Signet is managed as two geographical operating segments, being the US and UK divisions. These segments represent channels of distribution that offer similar merchandise and services and have similar marketing and distribution strategies. Both divisions are managed by executive committees, which report through a divisional Chief Executive to Signet’s Chief Executive Officer, who in turn reports to the Board. Each divisional executive committee is responsible for operating decisions within parameters set by the Board. The performance of each segment is regularly evaluated based on sales and operating income. The operating segments do not include certain central costs. There are no material transactions between the operating segments.

 

     13 weeks ended     39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
    October 27,
2012
    October 29,
2011
 

Sales:

        

US

   $ 575.6      $ 563.0      $ 2,029.0      $ 1,944.0   

UK

     140.6        147.5        441.1        451.4   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total sales

   $ 716.2      $ 710.5      $ 2,470.1      $ 2,395.4   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income/(loss):

        

US

   $ 67.9      $ 56.4      $ 322.9      $ 287.0   

UK

     (5.5     (5.0 )     (8.8     (2.4 )

Unallocated(1)

     (9.9     (8.9     (21.3     (21.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income

   $ 52.5      $ 42.5      $ 292.8      $ 263.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(in millions)

   October 27,
2012
     January 28,
2012
     October 29,
2011
 

Total assets:

        

US

   $ 2,876.8       $ 2,747.5       $ 2,660.8   

UK

     474.0         427.3         441.0   

Unallocated(2)

     70.3         436.6         262.3   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 3,421.1       $ 3,611.4       $ 3,364.1   
  

 

 

    

 

 

    

 

 

 

 

(1) Unallocated principally relates to central costs, which include corporate and general administrative functions.
(2) Unallocated principally relates to central assets, which include corporate and general administrative functions. The asset balance in the prior periods has primarily consisted of cash which has subsequently been utilized for the repurchase of common shares.
Foreign currency translation
Foreign currency translation

3. Foreign currency translation

The exchange rates used in these financial statements for the translation of UK pound sterling transactions and balances into US dollars are as follows:

 

     39 weeks
ended
October 27,
2012
     52 weeks
ended
January 28,
2012
     39 weeks
ended
October 29,
2011
 

Income statement (average rate)

     1.58         1.60         1.62   

Balance sheet (period end rate)

     1.61         1.57         1.61   

The year to date average exchange rate is used to prepare the income statement for the 39 weeks ended October 27, 2012 and is calculated from the weekly average exchange rates weighted by sales of the UK division. The income statement for the 13 weeks ended October 27, 2012 is calculated as the difference between the income statement for the 39 weeks ended October 27, 2012 and the previously reported income statement for the 26 weeks ended July 28, 2012. Therefore, the third quarter’s income statement includes the impact of the change in the year to date exchange rates between these quarter ends.

Income taxes
Income taxes

4. Income taxes

Signet has business activity in all states within the US and files income tax returns for the US federal jurisdiction and all applicable states. Signet also files income tax returns in the UK and certain other foreign jurisdictions. Signet is subject to US federal and state examinations by tax authorities for tax years ending after November 1, 2008 and is subject to examination by the UK tax authority for tax years ending after January 31, 2010.

As of January 28, 2012, Signet had approximately $4.8 million of unrecognized tax benefits in respect of uncertain tax positions, all of which would favorably affect the effective income tax rate if resolved in Signet’s favor. These unrecognized tax benefits relate to financing arrangements and intra-group charges which are subject to different and changing interpretations of tax law.

There has been no material change in the amount of unrecognized tax benefits in respect of uncertain tax positions during the 39 weeks ended October 27, 2012.

Signet recognizes accrued interest and, where appropriate, penalties related to unrecognized tax benefits within income tax expense. As of January 28, 2012, Signet had accrued interest of $0.4 million and there has been no material change in the amount of accrued interest as of October 27, 2012.

Over the next twelve months management believes that it is reasonably possible that there could be a reduction of substantially all of the unrecognized tax benefits as of January 28, 2012, due to settlement of the uncertain tax positions with the tax authorities.

Shareholders' equity and earnings per share
Shareholders' equity and earnings per share

5. Shareholders’ equity and earnings per share

Share repurchase

On October 26, 2011, the Board of Directors announced that it had authorized a program to repurchase up to $300 million of Signet’s common shares (the “Repurchase Program”). The Repurchase Program will be funded through Signet’s existing cash reserves and liquidity sources. Repurchased shares may be used by Signet for general corporate purposes. Repurchases may be made from time to time in the open market, through block trades or otherwise. The timing, manner, price and amount of any repurchases will be determined by Signet in its discretion, and will be subject to economic and market conditions, stock prices, applicable legal requirements and other factors. The Repurchase Program may be suspended or discontinued at any time, or from time to time, without notice. The Repurchase Program became effective on January 16, 2012, and lasts 24 months. On July 17, 2012, Signet announced that its Board of Directors had authorized a $50 million increase in the existing Repurchase Program, bringing the total authorization to $350 million, of which $50.1 million remained available as of October 27, 2012 and set to expire in January 2014.

The Company repurchased 6,425,296 shares at an average price of $44.70 in the 39 weeks ended October 27, 2012 under the Repurchase Program, which are being held as treasury shares. The Company did not repurchase any shares held as treasury in the 39 weeks ended October 29, 2011.

 

Earnings per share

 

     13 weeks ended      39 weeks ended  

(in millions, except per share amounts)

   October 27,
2012
     October 29,
2011
     October 27,
2012
     October 29,
2011
 

Net income

   $ 34.9       $ 26.1       $ 188.1       $ 167.8   
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic weighted average number of shares

     80.5         86.3         82.9         86.2   

Dilutive effect of share options

     0.4         0.8         0.5         0.8   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average number of shares

     80.9         87.1         83.4         87.0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per share – basic

   $ 0.43       $ 0.30       $ 2.27       $ 1.94   

Earnings per share – diluted

   $ 0.43       $ 0.30       $ 2.26       $ 1.93   

The basic weighted average number of shares excludes non-vested time-based restricted shares, shares held by the Employee Stock Ownership Trust and treasury shares. Such shares are not considered outstanding and do not qualify for dividends, except for time-based restricted shares for which dividends are earned and payable by the Company subject to full vesting. The effect of excluding these shares is to reduce the average number of shares in the 13 and 39 week periods ended October 27, 2012 by 6,711,229 and 4,309,714 shares, respectively (13 and 39 week periods ended October 29, 2011: 586,724 and 568,182 shares, respectively). The calculation of fully diluted earnings per share for the 13 and 39 week periods ended October 27, 2012 excludes options to purchase 274,023 and 240,548 shares, respectively (13 and 39 week periods ended October 29, 2011: 614,508 and 412,664 shares, respectively) on the basis that their effect on earnings per share was anti-dilutive.

Dividends

For the third quarter of Fiscal 2013, a cash dividend of $0.12 per share on Signet’s Common Shares was approved on September 7, 2012 for payment on November 26, 2012 to shareholders of record on October 26, 2012. As a result, $9.7 million has been recorded in accrued expenses and other current liabilities reflecting this dividend, which is not presented in the condensed consolidated statement of cash flows as it is a non-cash transaction as of October 27, 2012. For the first and second quarters of Fiscal 2013, a cash dividend of $0.12 per share on Signet’s Common Shares was paid on May 29, 2012 and August 28, 2012, respectively.

Accounts receivable, net
Accounts receivable, net

6. Accounts receivable, net

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. The allowance is an estimate of the losses as of the balance sheet date, and is calculated using a proprietary model that analyzes factors such as delinquency rates and recovery rates. A 100% allowance is made for any amount that is more than 90 days aged on a recency basis, as well as an allowance for those amounts 90 days aged and under, based on historical loss information and payment performance. The calculation is reviewed by management to assess whether, based on economic events, additional analyses are required to appropriately estimate losses inherent in the portfolio.

 

(in millions)

   October 27,
2012
     January 28,
2012
     October 29,
2011
 

Accounts receivable by portfolio segment, net:

        

US customer in-house finance receivables

   $ 987.6       $ 1,077.4       $ 882.2   

Other accounts receivable

     10.6         10.8         9.0   
  

 

 

    

 

 

    

 

 

 

Total accounts receivable, net

   $ 998.2       $ 1,088.2       $ 891.2   
  

 

 

    

 

 

    

 

 

 

Signet grants credit to customers based on a variety of credit quality indicators, including customer 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.

Other accounts receivable is comprised of gross accounts receivable relating to the insurance loss replacement business in the UK division of $11.2 million (January 28, 2012 and October 29, 2011: $11.3 million and $9.6 million, respectively) with a corresponding valuation allowance of $0.6 million (January 28, 2012 and October 29, 2011: $0.5 million and $0.6 million, respectively).

 

Allowance for Credit Losses on US Customer In-House Finance Receivables:

 

(in millions)

   39 weeks
ended
October 27,
2012
    52 weeks
ended
January 28,
2012
    39 weeks
ended
October 29,
2011
 

Beginning balance

   $ (78.1   $ (67.8   $ (67.8

Charge-offs

     79.3        92.8        66.3   

Recoveries

     16.6        19.3        14.8   

Provision

     (98.0     (122.4     (85.5
  

 

 

   

 

 

   

 

 

 

Ending balance

     (80.2     (78.1     (72.2

Ending receivable balance evaluated for impairment

     1,067.8        1,155.5        954.4   
  

 

 

   

 

 

   

 

 

 

US customer in-house finance receivables, net

   $ 987.6      $ 1,077.4      $ 882.2   
  

 

 

   

 

 

   

 

 

 

Credit Quality Indicator and Age Analysis of Past Due US Customer In-House Finance Receivables:

 

     October 27,
2012
    January 28,
2012
    October 29,
2011
 

(in millions)

   Gross      Valuation
allowance
    Gross      Valuation
allowance
    Gross      Valuation
allowance
 

Performing:

               

Current, aged 0-30 days

   $ 841.8       $ (25.8   $ 932.6       $ (28.9   $ 758.4       $ (23.6

Past due, aged 31-90 days

     178.1         (6.5     180.2         (6.5     153.0         (5.6

Non Performing:

               

Past due, aged more than 90 days

     47.9         (47.9     42.7         (42.7     43.0         (43.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
   $ 1,067.8       $ (80.2   $ 1,155.5       $ (78.1   $ 954.4       $ (72.2
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
Deferred revenue and warranty reserve
Deferred revenue and warranty reserve

7. Deferred revenue and warranty reserve

Deferred revenue

Deferred revenue is comprised primarily of extended service plans (“ESP”) and voucher promotions and other as follows:

 

(in millions)

   October 27,
2012
     January 28,
2012
     October 29,
2011
 

ESP deferred revenue

   $ 517.7       $ 511.7       $ 484.5   

Voucher promotions and other

     8.3         16.4         5.3   
  

 

 

    

 

 

    

 

 

 

Total deferred revenue

   $ 526.0       $ 528.1       $ 489.8   
  

 

 

    

 

 

    

 

 

 

Disclosed as:

        

Current liabilities

   $ 149.1       $ 154.1       $ 135.5   

Non-current liabilities

     376.9         374.0         354.3   
  

 

 

    

 

 

    

 

 

 

Total deferred revenue

   $ 526.0       $ 528.1       $ 489.8   
  

 

 

    

 

 

    

 

 

 

In addition, other current assets include deferred direct costs in relation to the sale of ESP of $21.0 million as of October 27, 2012 (January 28, 2012 and October 29, 2011: $20.2 million and $19.1 million, respectively). Other assets include the long-term portion of these deferred direct costs of $52.8 million as of October 27, 2012 (January 28, 2012 and October 29, 2011: $52.8 million and $49.8 million, respectively).

     13 weeks ended     39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
    October 27,
2012
    October 29,
2011
 

ESP deferred revenue, beginning of period

   $ 523.7      $ 490.5      $ 511.7      $ 481.1   

Plans sold

     36.0        33.3        130.2        119.9   

Revenues recognized

     (42.0     (39.3     (124.2     (116.5
  

 

 

   

 

 

   

 

 

   

 

 

 

ESP deferred revenue, end of period

   $ 517.7      $ 484.5      $ 517.7      $ 484.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

Warranty reserve

The warranty reserve for diamond and gemstone guarantees provided by the US division, included in accrued expenses and other current liabilities, is as follows:

 

     13 weeks ended     39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
    October 27,
2012
    October 29,
2011
 

Warranty reserve, beginning of period

   $ 17.6      $ 12.7      $ 15.1      $ 13.0   

Warranty expense

     1.6        2.8        7.7        5.2   

Utilized

     (1.6     (1.6     (5.2     (4.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Warranty reserve, end of period

   $ 17.6      $ 13.9      $ 17.6      $ 13.9   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(in millions)

   October 27,
2012
     January 28,
2012
     October 29,
2011
 

Disclosed as:

        

Current liabilities

   $ 6.6       $ 5.9       $ 5.5   

Non-current liabilities

     11.0         9.2         8.4   
  

 

 

    

 

 

    

 

 

 

Total warranty reserve

   $ 17.6       $ 15.1       $ 13.9   
  

 

 

    

 

 

    

 

 

 
Financial instruments and fair value
Financial instruments and fair value

8. Financial instruments and fair value

Signet’s principal financial instruments are comprised of cash, cash deposits/investments and overdrafts, accounts receivable and payable, derivatives and a revolving credit facility. Signet does not enter into derivative transactions for trading purposes. Derivative transactions are used by Signet for risk management purposes to address risks inherent in Signet’s business operations and sources of finance. The main risks arising from Signet’s operations are market risk including foreign currency risk and commodity risk, liquidity risk and interest rate risk. Signet uses these financial instruments to manage and mitigate these risks under policies reviewed and approved by the Board.

Market risk

Signet generates revenues and incurs expenses in US dollars and pounds sterling. As a portion of Signet’s UK division purchases are denominated in US dollars, Signet enters into foreign currency forward exchange contracts, foreign currency option contracts and foreign currency swaps to manage this exposure to the US dollar.

Signet holds a fluctuating amount of pounds sterling cash reflecting the cash generative characteristics of the UK division. Signet’s objective is to minimize net foreign exchange exposure to the income statement on pound sterling denominated items through managing this level of cash, pound sterling denominated intercompany balances and US dollar to pound sterling swaps. In order to manage the foreign exchange exposure and minimize the level of pound sterling cash held by Signet, the pound sterling denominated subsidiaries pay dividends regularly to their immediate holding companies and excess pounds sterling 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. In particular, Signet undertakes some hedging of its requirement for gold through the use of options, 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. Cash generated from operations and external financing are the main sources of funding supplementing Signet’s resources in meeting liquidity requirements.

The main external source of funding is a $400 million senior unsecured multi-currency five year revolving credit facility, under which there were no borrowings as of October 27, 2012, January 28, 2012, or October 29, 2011.

Interest rate risk

Signet may enter into various interest rate protection agreements in order to limit the impact of movements in interest rates on its cash or borrowings. There were no interest rate protection agreements outstanding as of October 27, 2012, January 28, 2012 or October 29, 2011.

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 6. 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.

Derivatives

Signet enters into forward foreign currency exchange contracts and foreign currency option contracts, principally in US dollars, in order to limit the impact of movements in foreign exchange rates on its forecast foreign currency purchases. The total notional amount of these foreign currency contracts outstanding as of October 27, 2012 was $75.9 million (January 28, 2012 and October 29, 2011: $48.9 million and $44.5 million, respectively). These contracts have been designated as cash flow hedges and will be settled over the next 15 months (January 28, 2012 and October 29, 2011: 13 months and 18 months, respectively).

Signet enters into forward purchase contracts and option purchase contracts for commodities in order to reduce its exposure to significant movements in the price of the underlying precious metal raw material. The total notional amount of commodity contracts outstanding as of October 27, 2012 was $219.6 million (January 28, 2012 and October 29, 2011: $211.2 million and $241.4 million, respectively). These contracts have been designated as cash flow hedges and will be settled over the next 14 months (January 28, 2012 and October 29, 2011: 12 months and 16 months, respectively).

For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same period in which the hedged item affects net income or loss. Gains and losses on derivatives that do not qualify for hedge accounting, together with any hedge ineffectiveness, are recognized immediately in other operating income.

Foreign currency contracts not designated as cash flow hedges are used 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 bank counterparties to the derivative contracts 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 27, 2012, 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:

     Derivative assets  
          Fair value  

(in millions)

   Balance sheet
location
   October 27,
2012
    January 28,
2012
    October 29,
2011
 

Derivatives designated as hedging instruments:

         

Foreign currency contracts

   Other current assets    $ 0.4      $ 1.1      $ 0.2   

Foreign currency contracts

   Other assets      0.1        0.1        0.1   

Commodity contracts

   Other current assets      5.2        16.1        23.9   

Commodity contracts

   Other assets      —          —          1.2   
     

 

 

   

 

 

   

 

 

 
        5.7        17.3        25.4   
     

 

 

   

 

 

   

 

 

 

Derivatives not designated as hedging instruments:

         

Foreign currency contracts

   Other current assets      —          —          0.1   
     

 

 

   

 

 

   

 

 

 
        —          —          0.1   
     

 

 

   

 

 

   

 

 

 

Total derivative assets

      $ 5.7      $ 17.3      $ 25.5   
     

 

 

   

 

 

   

 

 

 
     Derivative liabilities  
          Fair value  

(in millions)

   Balance sheet
location
   October 27,
2012
    January 28,
2012
    October 29,
2011
 

Derivatives designated as hedging instruments:

         

Foreign currency contracts

   Other current liabilities    $ (0.7   $ (0.2   $ (0.4

Foreign currency contracts

   Other liabilities      (0.2     —          —     

Commodity contracts

   Other current liabilities      (2.3     (1.0     (0.4

Commodity contracts

   Other liabilities      (0.3     —          (0.3
     

 

 

   

 

 

   

 

 

 
        (3.5     (1.2     (1.1
     

 

 

   

 

 

   

 

 

 

Derivatives not designated as hedging instruments:

         

Foreign currency contracts

   Other current liabilities      (0.5     —          (1.5 )
     

 

 

   

 

 

   

 

 

 
        (0.5     —          (1.5
     

 

 

   

 

 

   

 

 

 

Total derivative liabilities

      $ (4.0   $ (1.2   $ (2.6 )

The following tables summarize the effect of derivative instruments on the condensed consolidated income statements:

 

      Amount of gain/(loss)
recognized in OCI on
derivatives
(Effective  portion)
     Location of
gain/(loss)
reclassified from
accumulated OCI
into income
(Effective portion)
     Amount of gain/(loss) reclassified
from accumulated OCI  into
income
(Effective portion)
 
     13 weeks ended             13 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
            October 27,
2012
     October 29,
2011
 

Derivatives in cash flow hedging relationships:

             

Foreign currency contracts

   $ (1.1 )   $ 1.6         Cost of sales       $ 0.1       $ 0.1   

Commodity contracts

     7.9        16.8         Cost of sales         2.8         4.1   
  

 

 

   

 

 

       

 

 

    

 

 

 

Total

   $ 6.8      $ 18.4          $ 2.9       $ 4.2   
  

 

 

   

 

 

       

 

 

    

 

 

 

 

     Amount of gain/(loss)
recognized in OCI on
derivatives
(Effective  portion)
     Location of
gain/(loss)
reclassified from
accumulated OCI
into income
(Effective portion)
     Amount of gain/(loss) reclassified
from accumulated OCI  into
income
(Effective portion)
 
     39 weeks ended             39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
            October 27,
2012
     October 29,
2011
 

Derivatives in cash flow hedging relationships:

             

Foreign currency contracts

   $ (1.0 )   $ 0.9         Cost of sales       $ 0.3       $ —     

Commodity contracts

     (6.3 )     49.9         Cost of sales         17.1         10.5   
  

 

 

   

 

 

       

 

 

    

 

 

 

Total

   $ (7.3 )   $ 50.8          $ 17.4       $ 10.5   
  

 

 

   

 

 

       

 

 

    

 

 

 

The ineffective portion of hedging instruments taken into other operating income in the 13 and 39 weeks ended October 27, 2012 was $0.0 million (13 and 39 weeks ended October 29, 2011:$0.0 million and $0.4 million gain, respectively).

 

     Amount of gain/(loss)
recognized in income
on derivatives
    Location of gain/(loss)
recognized in income
on derivatives
     Amount of gain/(loss)
recognized in income
on derivatives
 
     13 weeks ended            39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
           October 27,
2012
    October 29,
2011
 

Derivatives not designated as hedging instruments:

           

Foreign currency contracts

   $ (1.6 )   $ (1.0 )     Other operating income, net       $ (0.5 )   $ (0.3 )
  

 

 

   

 

 

      

 

 

   

 

 

 

Total

   $ (1.6 )   $ (1.0 )      $ (0.5 )   $ (0.3
  

 

 

   

 

 

      

 

 

   

 

 

 

Fair value

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 27, 2012     January 28, 2012     October 29, 2011  

(in millions)

   Carrying
Value
    Fair Value
(Level 2)
    Carrying
Value
    Fair Value
(Level 2)
    Carrying
Value
    Fair Value
(Level 2)
 

Assets:

            

Forward foreign currency contracts

   $ 0.5      $ 0.5      $ 1.2      $ 1.2      $ 0.4      $ 0.4   

Forward commodity contracts

     5.2        5.2        16.1        16.1        25.1        25.1   

Liabilities:

            

Forward foreign currency contracts

     (1.4     (1.4     (0.2     (0.2     (1.9     (1.9

Forward commodity contracts

     (2.6 )     (2.6 )     (1.0     (1.0     (0.7     (0.7

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, current foreign currency forward rates or current commodity forward rates. The carrying amounts of cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities approximate fair value because of the short-term maturity of these amounts.

Pensions
Pensions

9. Pensions

Signet operates a defined benefit pension plan in the UK (the “UK Plan”). The components of net periodic pension cost were as follows:

 

     13 weeks ended     39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
    October 27,
2012
    October 29,
2011
 

Components of net periodic pension cost:

        

Service cost

   $ 0.9      $ 1.1      $ 2.7      $ 3.6   

Interest cost

     2.4        2.7        7.1        8.1   

Expected return on UK Plan assets

     (2.9     (3.5     (8.6     (10.5

Amortization of unrecognized prior service credit

     (0.4     (0.2     (1.2     (0.7

Amortization of unrecognized actuarial loss

     0.8        0.7        2.4        2.0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic pension cost

   $ 0.8      $ 0.8      $ 2.4      $ 2.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

In the 39 weeks ended October 27, 2012, Signet contributed $10.3 million to the UK Plan and expects to contribute a minimum aggregate of $13.7 million at current exchange rates to the UK Plan in Fiscal 2013. These contributions are in accordance with a deficit recovery plan that was in response to the funding deficit indicated by the April 5, 2009 actuarial valuation.

Commitments and contingencies
Commitments and contingencies

10. Commitments and contingencies

Legal proceedings

In March 2008, a group of private plaintiffs filed a class action lawsuit for an unspecified amount against Sterling Jewelers Inc. (“Sterling”), a subsidiary of Signet, in the U.S. District Court for the Southern District of New York alleging that US store-level employment practices are discriminatory as to compensation and promotional activities. In June 2008, the District Court referred the matter to private arbitration where the plaintiffs sought to proceed on a class-wide basis. In June 2009, the arbitrator ruled that the arbitration agreements allowed the plaintiff to proceed on a class-wide basis and attempt to seek class certification. Sterling challenged the ruling and the District Court vacated the arbitrator’s decision in July 2010. The plaintiffs appealed that order to the U.S. Court of Appeals for the Second Circuit. In July 2011, the Second Circuit reversed the District Court’s decision and instructed the District Court to confirm the Arbitrator’s Award (i.e., to allow the private plaintiff to move forward with a proposed class claim in arbitration). Sterling filed a petition for rehearing en banc of the Second Circuit panel’s decision, which was denied on September 6, 2011. Sterling appealed the Second Circuit’s decision to the U.S. Supreme Court on December 15, 2011, which was denied on March 19, 2012. The arbitration proceeding is in the early stages, and discovery is ongoing.

On September 23, 2008, the U.S. Equal Employment Opportunity Commission (“EEOC”) filed a lawsuit against Sterling in the U.S. District Court for the Western District of New York. The EEOC’s lawsuit alleges that Sterling engaged in a pattern or practice of gender discrimination with respect to pay and promotions of female retail store employees from January 1, 2003 to the present. The EEOC asserts 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. Discovery is now ongoing in the case.

Sterling denies the allegations of both parties and intends to defend these cases vigorously. At this point, no outcome or amount of loss is able to be estimated.

In addition, in the third quarter of Fiscal 2013, a favorable settlement of $3.9 million relating to the De Beers anti-trust litigation was received and recorded within selling, general and administrative expenses in the US division.

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 or not significant to Signet’s consolidated financial position.

Share-based compensation expense
Share-based compensation expense

11. Share-based compensation expense

Signet recorded share-based compensation expense of $4.3 million and $11.4 million for the 13 and 39 weeks ended October 27, 2012, respectively, related to the Omnibus Plans and Saving Share Plans (13 and 39 weeks ended October 29, 2011: $5.3 million and $12.3 million, respectively).

Loans, overdrafts and long-term debt
Loans, overdrafts and long-term debt

12. Loans, overdrafts and long-term debt

In May 2011, Signet entered into a $400 million senior unsecured multi-currency five year revolving credit facility agreement (the “Credit Facility”). The Credit Facility contains an expansion option that, with the consent of the lenders or the addition of new lenders, and subject to certain conditions, availability under the Credit Facility may be increased by an additional $200 million at the request of Signet. The Credit Facility has a five year term and matures in May 2016, at which time all amounts outstanding under the Credit Facility will be due and payable. The Credit Facility also contains various customary representations and warranties, financial reporting requirements and other affirmative and negative covenants. The Credit Facility requires that Signet maintain at all times a “Leverage Ratio” (as defined in the Credit Facility) to be no greater than 2.50 to 1.00 and a “Fixed Charge Coverage Ratio” (as defined in the Credit Facility) to be no less than 1.40 to 1.00, both determined as of the end of each fiscal quarter of Signet for the trailing twelve months.

At October 27, 2012, January 28, 2012, and October 29, 2011, there were no amounts outstanding under the Credit Facility, with no intra-period borrowings. Signet had stand-by letters of credit of $8.2 million, $8.2 million and $8.5 million as of October 27, 2012, January 28, 2012 and October 29, 2011, respectively.

Subsequent event
Subsequent event

13. Subsequent event

As of October 29, 2012, Signet acquired Ultra Stores, Inc. from Crystal Financial LLC and its other stockholders for $58.4 million in cash, which includes a working capital adjustment of approximately $1.4 million. Ultra Stores is a leading jewelry retailer and operates 107 stores, primarily in outlet centers and through 33 licensed jewelry departments. The primary purpose of the acquisition was to immediately increase Signet’s share of the US outlet channel for jewelry. Prior to closing the Ultra Stores, Inc. acquisition, Signet incurred approximately $2.5 million of acquisition-related expenses for professional services during the third quarter ended October 27, 2012. The results of Ultra Stores, Inc. will be reported as a component of the results of the US division.

Principal accounting policies and basis of preparation (Policies)

Basis of preparation

Signet Jewelers Limited (“Signet” or the “Company”), including its subsidiaries, is a leading retailer of jewelry, watches and associated services. Signet manages its business as two geographical segments, the United States of America (the “US”) and the United Kingdom (the “UK”). The US division operates retail stores under brands including Kay Jewelers, Jared The Galleria Of Jewelry and various regional brands, while the UK division’s retail stores operate under brands including H.Samuel and Ernest Jones.

These condensed consolidated financial statements included herein have been 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 accounting principles generally accepted in the United States of America (“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 year ended January 28, 2012.

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 receivables, inventory and deferred revenue, fair value of derivatives, depreciation and asset impairment, the valuation of employee benefits, income taxes and contingencies.

Fiscal year

The Company’s fiscal year ends on the Saturday nearest to January 31st. Fiscal 2013 is the 53 week year ending February 2, 2013 and Fiscal 2012 is the 52 week year ended January 28, 2012. Within these financial statements, the third quarter and the year to date of the relevant fiscal years 2013 and 2012 refer to the 13 and 39 weeks ended October 27, 2012 and October 29, 2011, respectively.

Seasonality

Signet’s sales are seasonal, with the first and second quarters each normally accounting for slightly more than 20% of annual sales, the third quarter a little under 20% and the fourth quarter for about 40% of sales, with December being by far the most important month of the year. Sales made in November and December are known as the “Holiday Season.” Due to sales leverage, Signet’s operating income is even more seasonal; about 45% to 50% of operating income normally occurs in the fourth quarter, comprised of nearly all of the UK division’s and about 40% to 50% of the US division’s operating income.

New accounting pronouncements adopted during the period

Presentation of comprehensive income

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income” (ASU 2011-05). ASU 2011-05 eliminates the option to present components of other comprehensive income (“OCI”) as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. On December 23, 2011, the FASB issued ASU 2011-12, “Comprehensive Income (Topic 220) – Deferral of the Accumulated Other Comprehensive Income in ASU 2011-05” (ASU 2011-12) to defer the new requirement to present components of reclassifications of other comprehensive income on the face of the financial statements. ASU 2011-05 does not change the current option for presenting components of OCI gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is to be applied retrospectively, with early adoption permitted. Signet adopted this guidance effective for the first quarter ended April 28, 2012 and the implementation of this accounting pronouncement did not have any impact on Signet’s financial position or results of operations.

 

Fair value measurements and disclosures

In May 2011, the FASB issued ASU 2011-04, “Fair Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and International Financial Reporting Standards (“IFRS”).” FASB intends the new guidance to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS. The amended guidance changes certain fair value measurement principles and enhances the disclosure requirements, particularly for Level 3 assets and liabilities for which Signet will be required to disclose quantitative information about the unobservable inputs used in fair value measurements. The amendments are to be applied prospectively and are effective for annual periods beginning after December 15, 2011. Signet adopted this guidance effective for the first quarter ended April 28, 2012 and the adoption of this amendment did not have did not have any impact on Signet’s financial position or results of operations.

Reclassification

Signet has reclassified the presentation of certain prior year information to conform to the current year presentation.

Segment information (Tables)
Segment Reporting Information, by Segment

     13 weeks ended     39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
    October 27,
2012
    October 29,
2011
 

Sales:

        

US

   $ 575.6      $ 563.0      $ 2,029.0      $ 1,944.0   

UK

     140.6        147.5        441.1        451.4   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total sales

   $ 716.2      $ 710.5      $ 2,470.1      $ 2,395.4   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income/(loss):

        

US

   $ 67.9      $ 56.4      $ 322.9      $ 287.0   

UK

     (5.5     (5.0 )     (8.8     (2.4 )

Unallocated(1)

     (9.9     (8.9     (21.3     (21.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income

   $ 52.5      $ 42.5      $ 292.8      $ 263.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(in millions)

   October 27,
2012
     January 28,
2012
     October 29,
2011
 

Total assets:

        

US

   $ 2,876.8       $ 2,747.5       $ 2,660.8   

UK

     474.0         427.3         441.0   

Unallocated(2)

     70.3         436.6         262.3   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 3,421.1       $ 3,611.4       $ 3,364.1   
  

 

 

    

 

 

    

 

 

 

 

(1) Unallocated principally relates to central costs, which include corporate and general administrative functions.
(2) Unallocated principally relates to central assets, which include corporate and general administrative functions. The asset balance in the prior periods has primarily consisted of cash which has subsequently been utilized for the repurchase of common shares.
Foreign currency translation (Tables)
Exchange Rates Used In Financial Statements

The exchange rates used in these financial statements for the translation of UK pound sterling transactions and balances into US dollars are as follows:

 

     39 weeks
ended
October 27,
2012
     52 weeks
ended
January 28,
2012
     39 weeks
ended
October 29,
2011
 

Income statement (average rate)

     1.58         1.60         1.62   

Balance sheet (period end rate)

     1.61         1.57         1.61   
Shareholders' equity and earnings per share (Tables)
Earnings Per Share, Basic And Diluted

Earnings per share

 

     13 weeks ended      39 weeks ended  

(in millions, except per share amounts)

   October 27,
2012
     October 29,
2011
     October 27,
2012
     October 29,
2011
 

Net income

   $ 34.9       $ 26.1       $ 188.1       $ 167.8   
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic weighted average number of shares

     80.5         86.3         82.9         86.2   

Dilutive effect of share options

     0.4         0.8         0.5         0.8   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average number of shares

     80.9         87.1         83.4         87.0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per share – basic

   $ 0.43       $ 0.30       $ 2.27       $ 1.94   

Earnings per share – diluted

   $ 0.43       $ 0.30       $ 2.26       $ 1.93   
Accounts receivable, net (Tables)

(in millions)

   October 27,
2012
     January 28,
2012
     October 29,
2011
 

Accounts receivable by portfolio segment, net:

        

US customer in-house finance receivables

   $ 987.6       $ 1,077.4       $ 882.2   

Other accounts receivable

     10.6         10.8         9.0   
  

 

 

    

 

 

    

 

 

 

Total accounts receivable, net

   $ 998.2       $ 1,088.2       $ 891.2   
  

 

 

    

 

 

    

 

 

 

Allowance for Credit Losses on US Customer In-House Finance Receivables:

 

(in millions)

   39 weeks
ended
October 27,
2012
    52 weeks
ended
January 28,
2012
    39 weeks
ended
October 29,
2011
 

Beginning balance

   $ (78.1   $ (67.8   $ (67.8

Charge-offs

     79.3        92.8        66.3   

Recoveries

     16.6        19.3        14.8   

Provision

     (98.0     (122.4     (85.5
  

 

 

   

 

 

   

 

 

 

Ending balance

     (80.2     (78.1     (72.2

Ending receivable balance evaluated for impairment

     1,067.8        1,155.5        954.4   
  

 

 

   

 

 

   

 

 

 

US customer in-house finance receivables, net

   $ 987.6      $ 1,077.4      $ 882.2   
  

 

 

   

 

 

   

 

 

 

Credit Quality Indicator and Age Analysis of Past Due US Customer In-House Finance Receivables:

 

     October 27,
2012
    January 28,
2012
    October 29,
2011
 

(in millions)

   Gross      Valuation
allowance
    Gross      Valuation
allowance
    Gross      Valuation
allowance
 

Performing:

               

Current, aged 0-30 days

   $ 841.8       $ (25.8   $ 932.6       $ (28.9   $ 758.4       $ (23.6

Past due, aged 31-90 days

     178.1         (6.5     180.2         (6.5     153.0         (5.6

Non Performing:

               

Past due, aged more than 90 days

     47.9         (47.9     42.7         (42.7     43.0         (43.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
   $ 1,067.8       $ (80.2   $ 1,155.5       $ (78.1   $ 954.4       $ (72.2
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
Deferred revenue and warranty reserve (Tables)

Deferred revenue is comprised primarily of extended service plans (“ESP”) and voucher promotions and other as follows:

 

(in millions)

   October 27,
2012
     January 28,
2012
     October 29,
2011
 

ESP deferred revenue

   $ 517.7       $ 511.7       $ 484.5   

Voucher promotions and other

     8.3         16.4         5.3   
  

 

 

    

 

 

    

 

 

 

Total deferred revenue

   $ 526.0       $ 528.1       $ 489.8   
  

 

 

    

 

 

    

 

 

 

Disclosed as:

        

Current liabilities

   $ 149.1       $ 154.1       $ 135.5   

Non-current liabilities

     376.9         374.0         354.3   
  

 

 

    

 

 

    

 

 

 

Total deferred revenue

   $ 526.0       $ 528.1       $ 489.8   
  

 

 

    

 

 

    

 

 

 
     13 weeks ended     39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
    October 27,
2012
    October 29,
2011
 

ESP deferred revenue, beginning of period

   $ 523.7      $ 490.5      $ 511.7      $ 481.1   

Plans sold

     36.0        33.3        130.2        119.9   

Revenues recognized

     (42.0     (39.3     (124.2     (116.5
  

 

 

   

 

 

   

 

 

   

 

 

 

ESP deferred revenue, end of period

   $ 517.7      $ 484.5      $ 517.7      $ 484.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

The warranty reserve for diamond and gemstone guarantees provided by the US division, included in accrued expenses and other current liabilities, is as follows:

 

     13 weeks ended     39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
    October 27,
2012
    October 29,
2011
 

Warranty reserve, beginning of period

   $ 17.6      $ 12.7      $ 15.1      $ 13.0   

Warranty expense

     1.6        2.8        7.7        5.2   

Utilized

     (1.6     (1.6     (5.2     (4.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Warranty reserve, end of period

   $ 17.6      $ 13.9      $ 17.6      $ 13.9   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(in millions)

   October 27,
2012
     January 28,
2012
     October 29,
2011
 

Disclosed as:

        

Current liabilities

   $ 6.6       $ 5.9       $ 5.5   

Non-current liabilities

     11.0         9.2         8.4   
  

 

 

    

 

 

    

 

 

 

Total warranty reserve

   $ 17.6       $ 15.1       $ 13.9   
  

 

 

    

 

 

    

 

 

 
Financial instruments and fair value (Tables)

The following table summarizes the fair value and presentation of derivative instruments in the condensed consolidated balance sheets:

     Derivative assets  
          Fair value  

(in millions)

   Balance sheet
location
   October 27,
2012
    January 28,
2012
    October 29,
2011
 

Derivatives designated as hedging instruments:

         

Foreign currency contracts

   Other current assets    $ 0.4      $ 1.1      $ 0.2   

Foreign currency contracts

   Other assets      0.1        0.1        0.1   

Commodity contracts

   Other current assets      5.2        16.1        23.9   

Commodity contracts

   Other assets      —          —          1.2   
     

 

 

   

 

 

   

 

 

 
        5.7        17.3        25.4   
     

 

 

   

 

 

   

 

 

 

Derivatives not designated as hedging instruments:

         

Foreign currency contracts

   Other current assets      —          —          0.1   
     

 

 

   

 

 

   

 

 

 
        —          —          0.1   
     

 

 

   

 

 

   

 

 

 

Total derivative assets

      $ 5.7      $ 17.3      $ 25.5   
     

 

 

   

 

 

   

 

 

 
     Derivative liabilities  
          Fair value  

(in millions)

   Balance sheet
location
   October 27,
2012
    January 28,
2012
    October 29,
2011
 

Derivatives designated as hedging instruments:

         

Foreign currency contracts

   Other current liabilities    $ (0.7   $ (0.2   $ (0.4

Foreign currency contracts

   Other liabilities      (0.2     —          —     

Commodity contracts

   Other current liabilities      (2.3     (1.0     (0.4

Commodity contracts

   Other liabilities      (0.3     —          (0.3
     

 

 

   

 

 

   

 

 

 
        (3.5     (1.2     (1.1
     

 

 

   

 

 

   

 

 

 

Derivatives not designated as hedging instruments:

         

Foreign currency contracts

   Other current liabilities      (0.5     —          (1.5 )
     

 

 

   

 

 

   

 

 

 
        (0.5     —          (1.5
     

 

 

   

 

 

   

 

 

 

Total derivative liabilities

      $ (4.0   $ (1.2   $ (2.6
     

 

 

   

 

 

   

 

 

 

The methods Signet uses to determine fair value on an instrument-specific basis are detailed below:

 

     October 27, 2012     January 28, 2012     October 29, 2011  

(in millions)

   Carrying
Value
    Fair Value
(Level 2)
    Carrying
Value
    Fair Value
(Level 2)
    Carrying
Value
    Fair Value
(Level 2)
 

Assets:

            

Forward foreign currency contracts

   $ 0.5      $ 0.5      $ 1.2      $ 1.2      $ 0.4      $ 0.4   

Forward commodity contracts

     5.2        5.2        16.1        16.1        25.1        25.1   

Liabilities:

            

Forward foreign currency contracts

     (1.4     (1.4     (0.2     (0.2     (1.9     (1.9

Forward commodity contracts

     (2.6 )     (2.6 )     (1.0     (1.0     (0.7     (0.7

The following tables summarize the effect of derivative instruments on the condensed consolidated income statements:

 

      Amount of gain/(loss)
recognized in OCI on
derivatives
(Effective  portion)
     Location of
gain/(loss)
reclassified from
accumulated OCI
into income
(Effective portion)
     Amount of gain/(loss) reclassified
from accumulated OCI  into
income
(Effective portion)
 
     13 weeks ended             13 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
            October 27,
2012
     October 29,
2011
 

Derivatives in cash flow hedging relationships:

             

Foreign currency contracts

   $ (1.1 )   $ 1.6         Cost of sales       $ 0.1       $ 0.1   

Commodity contracts

     7.9        16.8         Cost of sales         2.8         4.1   
  

 

 

   

 

 

       

 

 

    

 

 

 

Total

   $ 6.8      $ 18.4          $ 2.9       $ 4.2   
  

 

 

   

 

 

       

 

 

    

 

 

 

 

     Amount of gain/(loss)
recognized in OCI on
derivatives
(Effective  portion)
     Location of
gain/(loss)
reclassified from
accumulated OCI
into income
(Effective portion)
     Amount of gain/(loss) reclassified
from accumulated OCI  into
income
(Effective portion)
 
     39 weeks ended             39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
            October 27,
2012
     October 29,
2011
 

Derivatives in cash flow hedging relationships:

             

Foreign currency contracts

   $ (1.0 )   $ 0.9         Cost of sales       $ 0.3       $ —     

Commodity contracts

     (6.3 )     49.9         Cost of sales         17.1         10.5   
  

 

 

   

 

 

       

 

 

    

 

 

 

Total

   $ (7.3 )   $ 50.8          $ 17.4       $ 10.5   
  

 

 

   

 

 

       

 

 

    

 

 

 

The ineffective portion of hedging instruments taken into other operating income in the 13 and 39 weeks ended October 27, 2012 was $0.0 million (13 and 39 weeks ended October 29, 2011:$0.0 million and $0.4 million gain, respectively).

 

     Amount of gain/(loss)
recognized in income
on derivatives
    Location of gain/(loss)
recognized in income
on derivatives
     Amount of gain/(loss)
recognized in income
on derivatives
 
     13 weeks ended            39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
           October 27,
2012
    October 29,
2011
 

Derivatives not designated as hedging instruments:

           

Foreign currency contracts

   $ (1.6 )   $ (1.0 )     Other operating income, net       $ (0.5 )   $ (0.3 )
  

 

 

   

 

 

      

 

 

   

 

 

 

Total

   $ (1.6 )   $ (1.0 )      $ (0.5 )   $ (0.3
  

 

 

   

 

 

      

 

 

   

 

 

 
Pensions (Tables)
Components Of Net Periodic Pension Cost

The components of net periodic pension cost were as follows:

 

     13 weeks ended     39 weeks ended  

(in millions)

   October 27,
2012
    October 29,
2011
    October 27,
2012
    October 29,
2011
 

Components of net periodic pension cost:

        

Service cost

   $ 0.9      $ 1.1      $ 2.7      $ 3.6   

Interest cost

     2.4        2.7        7.1        8.1   

Expected return on UK Plan assets

     (2.9     (3.5     (8.6     (10.5

Amortization of unrecognized prior service credit

     (0.4     (0.2     (1.2     (0.7

Amortization of unrecognized actuarial loss

     0.8        0.7        2.4        2.0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic pension cost

   $ 0.8      $ 0.8      $ 2.4      $ 2.5   
  

 

 

   

 

 

   

 

 

   

 

 

 
Principal Accounting Policies and Basis of Preparation - Additional Information (Detail)
9 Months Ended
Oct. 27, 2012
Principal Accounting Policies and Basis of Preparation [Line Items]
 
Approximate percentage of first quarter sales to annual sales
Slightly more than 20% 
Approximate percentage of second quarter sales to annual sales
Slightly more than 20% 
Approximate percentage of third quarter sales to annual sales
Little under 20% 
Approximate percentage of fourth quarter sales to annual sales
40.00% 
Minimum
 
Principal Accounting Policies and Basis of Preparation [Line Items]
 
Approximate percentage of operating income in fourth quarter
45.00% 
Minimum |
US
 
Principal Accounting Policies and Basis of Preparation [Line Items]
 
Approximate percentage of operating income in fourth quarter
40.00% 
Maximum
 
Principal Accounting Policies and Basis of Preparation [Line Items]
 
Approximate percentage of operating income in fourth quarter
50.00% 
Maximum |
US
 
Principal Accounting Policies and Basis of Preparation [Line Items]
 
Approximate percentage of operating income in fourth quarter
50.00% 
Segment Reporting Information, by Segment (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Jan. 28, 2012
Segment Reporting Information [Line Items]
 
 
 
 
 
Total sales
$ 716.2 
$ 710.5 
$ 2,470.1 
$ 2,395.4 
 
Total operating income
52.5 
42.5 
292.8 
263.5 
 
Total assets
3,421.1 
3,364.1 
3,421.1 
3,364.1 
3,611.4 
US
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total sales
575.6 
563.0 
2,029.0 
1,944.0 
 
Total operating income
67.9 
56.4 
322.9 
287.0 
 
Total assets
2,876.8 
2,660.8 
2,876.8 
2,660.8 
2,747.5 
UK
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total sales
140.6 
147.5 
441.1 
451.4 
 
Total operating income
(5.5)
(5.0)
(8.8)
(2.4)
 
Total assets
474.0 
441.0 
474.0 
441.0 
427.3 
Unallocated Amount to Segment
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total operating income
(9.9)1
(8.9)1
(21.3)1
(21.1)1
 
Total assets
$ 70.3 2
$ 262.3 2
$ 70.3 2
$ 262.3 2
$ 436.6 2
Exchange Rates Used In Financial Statements (Detail)
9 Months Ended 12 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Jan. 28, 2012
Intercompany Foreign Currency Balance [Line Items]
 
 
 
Income statement (average rate)
1.58 
1.62 
1.60 
Balance sheet (period end rate)
1.61 
1.61 
1.57 
Income Taxes - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jan. 28, 2012
Oct. 27, 2012
US
Oct. 27, 2012
UK
Income Taxes [Line Items]
 
 
 
Tax years subject to examination
 
Tax years ending after November 1, 2008 
Tax years ending after January 31, 2010 
Unrecognized tax benefits
$ 4.8 
 
 
Accrued interest related to unrecognized tax benefits
$ 0.4 
 
 
Shareholders' Equity and Earnings Per Share - Additional Information (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
1 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Jul. 28, 2012
Jan. 16, 2012
Oct. 26, 2011
Oct. 27, 2012
Jul. 28, 2012
Apr. 28, 2012
Oct. 27, 2012
Jul. 17, 2012
Oct. 27, 2012
Restricted Stock
Oct. 29, 2011
Restricted Stock
Oct. 27, 2012
Restricted Stock
Oct. 29, 2011
Restricted Stock
Oct. 27, 2012
Stock Options
Oct. 29, 2011
Stock Options
Oct. 27, 2012
Stock Options
Oct. 29, 2011
Stock Options
Shareholders Equity and Earnings Per Share [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock repurchase program, authorized amount
$ 350 
 
$ 300 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repurchase Program, period
 
24 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock repurchase program, increase in the existing Repurchase Program
 
 
 
 
 
 
 
50 
 
 
 
 
 
 
 
 
Stock repurchase program, remaining available amount
 
 
 
 
 
 
50.1 
 
 
 
 
 
 
 
 
 
Stock repurchase program, expired period
 
 
 
 
 
 
January 2014 
 
 
 
 
 
 
 
 
 
Shares repurchased
 
 
 
 
 
 
6,425,296 
 
 
 
 
 
 
 
 
 
Stock repurchased average price
 
 
 
 
 
 
$ 44.70 
 
 
 
 
 
 
 
 
 
Effect of shares excluded from basic weighted average number of shares
 
 
 
 
 
 
 
 
6,711,229 
586,724 
4,309,714 
568,182 
 
 
 
 
Anti-dilutive shares excluded from the calculation of earnings per share
 
 
 
 
 
 
 
 
 
 
 
 
274,023 
614,508 
240,548 
412,664 
Dividends payable, date of record
 
 
 
Oct. 26, 2012 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends payable, date declared
 
 
 
Sep. 07, 2012 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends payable, amount per share
$ 0.12 
 
 
$ 0.12 
$ 0.12 
$ 0.12 
$ 0.12 
 
 
 
 
 
 
 
 
 
Accrued expenses and other current liabilities
 
 
 
$ 9.7 
 
 
$ 9.7 
 
 
 
 
 
 
 
 
 
Dividend, paid date
 
 
 
Nov. 26, 2012 
Aug. 28, 2012 
May 29, 2012 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share, Basic And Diluted (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Shareholders Equity and Earnings Per Share [Line Items]
 
 
 
 
Net income
$ 34.9 
$ 26.1 
$ 188.1 
$ 167.8 
Basic weighted average number of shares
80.5 
86.3 
82.9 
86.2 
Dilutive effect of share options
0.4 
0.8 
0.5 
0.8 
Diluted weighted average number of shares
80.9 
87.1 
83.4 
87.0 
Earnings per share - basic
$ 0.43 
$ 0.30 
$ 2.27 
$ 1.94 
Earnings per share - diluted
$ 0.43 
$ 0.30 
$ 2.26 
$ 1.93 
Accounts receivable, net - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 27, 2012
D
Oct. 27, 2012
UK
Jan. 28, 2012
UK
Oct. 29, 2011
UK
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Percentage allowance on losses
100.00% 
 
 
 
Losses allowance maturity date, (in days)
90 
 
 
 
Finance receivable age, (in days)
90 
 
 
 
Gross accounts receivable
 
$ 11.2 
$ 11.3 
$ 9.6 
Valuation of allowance
 
$ 0.6 
$ 0.5 
$ 0.6 
Accounts Receivable by Portfolio Segment, Net (Detail) (USD $)
In Millions, unless otherwise specified
Oct. 27, 2012
Jan. 28, 2012
Oct. 29, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Total accounts receivable, net
$ 998.2 
$ 1,088.2 
$ 891.2 
US Customer In-House Finance Receivables
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Total accounts receivable, net
987.6 
1,077.4 
882.2 
Other
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Total accounts receivable, net
$ 10.6 
$ 10.8 
$ 9.0 
Allowance For Credit Losses On US Customer In-House Finance Receivables (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Jan. 28, 2012
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
Ending balance
$ (80.2)
$ (72.2)
$ (78.1)
Ending receivable balance evaluated for impairment
1,067.8 
954.4 
1,155.5 
Accounts receivable, net
998.2 
891.2 
1,088.2 
US Customer In-House Finance Receivables
 
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
Beginning balance
(78.1)
(67.8)
(67.8)
Charge-offs
79.3 
66.3 
92.8 
Recoveries
16.6 
14.8 
19.3 
Provision
(98.0)
(85.5)
(122.4)
Ending balance
(80.2)
(72.2)
(78.1)
Ending receivable balance evaluated for impairment
1,067.8 
954.4 
1,155.5 
Accounts receivable, net
$ 987.6 
$ 882.2 
$ 1,077.4 
Credit Quality Indicator and Age Analysis of Past Due US Customer In-House Finance Receivables (Detail) (USD $)
In Millions, unless otherwise specified
Oct. 27, 2012
Jan. 28, 2012
Oct. 29, 2011
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
Gross
$ 1,067.8 
$ 1,155.5 
$ 954.4 
Valuation Allowance
(80.2)
(78.1)
(72.2)
Performing Financing Receivable |
Current |
Aged 0-30 Days
 
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
Gross
841.8 
932.6 
758.4 
Valuation Allowance
(25.8)
(28.9)
(23.6)
Performing Financing Receivable |
Past Due |
Aged 31 - 90 Days
 
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
Gross
178.1 
180.2 
153.0 
Valuation Allowance
(6.5)
(6.5)
(5.6)
Nonperforming Financing Receivable |
Past Due |
Aged More Than 90 Days
 
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
Gross
47.9 
42.7 
43.0 
Valuation Allowance
$ (47.9)
$ (42.7)
$ (43.0)
Deferred Revenue (Detail) (USD $)
In Millions, unless otherwise specified
Oct. 27, 2012
Jul. 28, 2012
Jan. 28, 2012
Oct. 29, 2011
Jul. 30, 2011
Jan. 29, 2011
Deferred Revenue Arrangement [Line Items]
 
 
 
 
 
 
ESP deferred revenue
$ 517.7 
$ 523.7 
$ 511.7 
$ 484.5 
$ 490.5 
$ 481.1 
Voucher promotions and other
8.3 
 
16.4 
5.3 
 
 
Total deferred revenue
526.0 
 
528.1 
489.8 
 
 
Deferred revenue, current liabilities
149.1 
 
154.1 
135.5 
 
 
Deferred revenue, non-current liabilities
376.9 
 
374.0 
354.3 
 
 
Total deferred revenue
$ 526.0 
 
$ 528.1 
$ 489.8 
 
 
Deferred Revenue and Warranty Reserve - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Oct. 27, 2012
Jan. 28, 2012
Oct. 29, 2011
Deferred Revenue and Warranty Reserve [Line Items]
 
 
 
Current portion of deferred direct costs
$ 21.0 
$ 20.2 
$ 19.1 
Long-term portion of deferred direct costs
$ 52.8 
$ 52.8 
$ 49.8 
Warranty Deferred Revenue (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Deferred Revenue and Warranty Reserve [Line Items]
 
 
 
 
ESP deferred revenue, beginning of period
$ 523.7 
$ 490.5 
$ 511.7 
$ 481.1 
Plans sold
36.0 
33.3 
130.2 
119.9 
Revenues recognized
(42.0)
(39.3)
(124.2)
(116.5)
ESP deferred revenue, end of period
$ 517.7 
$ 484.5 
$ 517.7 
$ 484.5 
Warranty Reserve Included in Accrued Expenses and Other Current Liabilities (Detail) (Warranty Reserves, USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Warranty Reserves
 
 
 
 
Deferred Revenue and Warranty Reserve [Line Items]
 
 
 
 
Warranty reserve, beginning of period
$ 17.6 
$ 12.7 
$ 15.1 
$ 13.0 
Warranty expense
1.6 
2.8 
7.7 
5.2 
Utilized
(1.6)
(1.6)
(5.2)
(4.3)
Warranty reserve, end of period
$ 17.6 
$ 13.9 
$ 17.6 
$ 13.9 
Warranty Reserve (Detail) (Warranty Reserves, USD $)
In Millions, unless otherwise specified
Oct. 27, 2012
Jul. 28, 2012
Jan. 28, 2012
Oct. 29, 2011
Jul. 30, 2011
Jan. 29, 2011
Warranty Reserves
 
 
 
 
 
 
Deferred Revenue and Warranty Reserve [Line Items]
 
 
 
 
 
 
Current liabilities
$ 6.6 
 
$ 5.9 
$ 5.5 
 
 
Non-current liabilities
11.0 
 
9.2 
8.4 
 
 
Total warranty reserve
$ 17.6 
$ 17.6 
$ 15.1 
$ 13.9 
$ 12.7 
$ 13.0 
Financial Instruments and Fair Value - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Y
Oct. 29, 2011
Jan. 28, 2012
Oct. 27, 2012
Foreign Exchange Contract
Jan. 28, 2012
Foreign Exchange Contract
Oct. 29, 2011
Foreign Exchange Contract
Oct. 27, 2012
Commodity Contract
Jan. 28, 2012
Commodity Contract
Oct. 29, 2011
Commodity Contract
Oct. 27, 2012
Cash Flow Hedging
Foreign Exchange Contract
Oct. 29, 2011
Cash Flow Hedging
Foreign Exchange Contract
Jan. 28, 2012
Cash Flow Hedging
Foreign Exchange Contract
Oct. 27, 2012
Cash Flow Hedging
Commodity Contract
Oct. 29, 2011
Cash Flow Hedging
Commodity Contract
Jan. 28, 2012
Cash Flow Hedging
Commodity Contract
Financial Instruments and Fair Value [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of agreement in place for senior unsecured multi-currency five-year revolving credit external funding
 
 
$ 400 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving credit agreement period (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings on unsecured senior revolving credit agreement
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate protection agreements outstanding
 
 
 
 
 
 
 
 
 
 
 
 
Total notional amount
 
 
 
 
 
75.9 
48.9 
44.5 
 
 
 
 
 
 
 
 
 
Cash flow hedges settlement period
 
 
 
 
 
 
 
 
 
 
 
These contracts have been designated as cash flow hedges and will be settled over the next 15 months (January 28, 2012 and October 29, 2011 13 months and 18 months, respectively). 
 
 
These contracts have been designated as cash flow hedges and will be settled over the next 14 months (January 28, 2012 and October 29, 2011 12 months and 16 months, respectively). 
 
 
Contracts maturity period
 
 
 
 
 
 
 
 
 
 
 
15 months 
18 months 
13 months 
14 months 
16 months 
12 months 
Total notional amount
 
 
 
 
 
 
 
 
219.6 
211.2 
241.4 
 
 
 
 
 
 
Ineffective portion of hedging instruments taken into other operating income
$ 0 
$ 0 
$ 0 
$ 0.4 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value and Presentation of Derivative Instruments In Condensed Consolidated Balance Sheets (Detail) (USD $)
In Millions, unless otherwise specified
Oct. 27, 2012
Jan. 28, 2012
Oct. 29, 2011
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative assets
$ 5.7 
$ 17.3 
$ 25.5 
Total derivative liabilities
(4.0)
(1.2)
(2.6)
Designated as Hedging Instrument
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative assets
5.7 
17.3 
25.4 
Total derivative liabilities
(3.5)
(1.2)
(1.1)
Designated as Hedging Instrument |
Other Current Assets |
Foreign Exchange Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative assets
0.4 
1.1 
0.2 
Designated as Hedging Instrument |
Other Current Assets |
Commodity Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative assets
5.2 
16.1 
23.9 
Designated as Hedging Instrument |
Other Assets |
Foreign Exchange Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative assets
0.1 
0.1 
0.1 
Designated as Hedging Instrument |
Other Assets |
Commodity Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative assets
 
 
1.2 
Designated as Hedging Instrument |
Other Current Liabilities |
Foreign Exchange Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative liabilities
(0.7)
(0.2)
(0.4)
Designated as Hedging Instrument |
Other Current Liabilities |
Commodity Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative liabilities
(2.3)
(1.0)
(0.4)
Designated as Hedging Instrument |
Other Liabilities |
Foreign Exchange Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative liabilities
(0.2)
 
 
Designated as Hedging Instrument |
Other Liabilities |
Commodity Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative liabilities
(0.3)
 
(0.3)
Not Designated as Hedging Instrument
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative assets
 
 
0.1 
Total derivative liabilities
(0.5)
 
(1.5)
Not Designated as Hedging Instrument |
Other Current Assets |
Foreign Exchange Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative assets
 
 
0.1 
Not Designated as Hedging Instrument |
Other Current Liabilities |
Foreign Exchange Contract
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Total derivative liabilities
$ (0.5)
 
$ (1.5)
Effect of Derivative Instruments on Condensed Consolidated Income Statements (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of gain/(loss) recognized in OCI on derivatives (Effective portion)
$ 6.8 
$ 18.4 
$ (7.3)
$ 50.8 
Amount of gain/(loss) reclassified from accumulated OCI into income (Effective portion)
2.9 
4.2 
17.4 
10.5 
Amount of gain/(loss) recognized in income on derivatives
(1.6)
(1.0)
(0.5)
(0.3)
Cash Flow Hedging |
Foreign Exchange Contract |
Cost of Sales
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of gain/(loss) recognized in OCI on derivatives (Effective portion)
(1.1)
1.6 
(1.0)
0.9 
Amount of gain/(loss) reclassified from accumulated OCI into income (Effective portion)
0.1 
0.1 
0.3 
 
Cash Flow Hedging |
Commodity Contract |
Cost of Sales
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of gain/(loss) recognized in OCI on derivatives (Effective portion)
7.9 
16.8 
(6.3)
49.9 
Amount of gain/(loss) reclassified from accumulated OCI into income (Effective portion)
2.8 
4.1 
17.1 
10.5 
Not Designated as Hedging Instrument |
Foreign Exchange Contract |
Other operating income, net
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of gain/(loss) recognized in income on derivatives
$ (1.6)
$ (1.0)
$ (0.5)
$ (0.3)
Fair Value of Financial Instruments Held or Issued (Detail) (USD $)
In Millions, unless otherwise specified
Oct. 27, 2012
Jan. 28, 2012
Oct. 29, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Assets, Carrying Value
$ 3,421.1 
$ 3,611.4 
$ 3,364.1 
Liabilities, Carrying Value
(1,271.0)
(1,332.3)
(1,215.9)
Forward Foreign Currency Contracts
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Assets, Carrying Value
0.5 
1.2 
0.4 
Liabilities, Carrying Value
(1.4)
(0.2)
(1.9)
Forward Commodity Contracts
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Assets, Carrying Value
5.2 
16.1 
25.1 
Liabilities, Carrying Value
(2.6)
(1.0)
(0.7)
Fair Value, Inputs, Level 2 |
Forward Foreign Currency Contracts
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Assets, Fair Value
0.5 
1.2 
0.4 
Liabilities, Fair Value
(1.4)
(0.2)
(1.9)
Fair Value, Inputs, Level 2 |
Forward Commodity Contracts
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Assets, Fair Value
5.2 
16.1 
25.1 
Liabilities, Fair Value
$ (2.6)
$ (1.0)
$ (0.7)
Components Of Net Periodic Pension Cost (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Pensions [Abstract]
 
 
 
 
Service cost
$ 0.9 
$ 1.1 
$ 2.7 
$ 3.6 
Interest cost
2.4 
2.7 
7.1 
8.1 
Expected return on UK Plan assets
(2.9)
(3.5)
(8.6)
(10.5)
Amortization of unrecognized prior service credit
(0.4)
(0.2)
(1.2)
(0.7)
Amortization of unrecognized actuarial loss
0.8 
0.7 
2.4 
2.0 
Net periodic benefit cost
$ 0.8 
$ 0.8 
$ 2.4 
$ 2.5 
Pensions - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 27, 2012
Defined Benefit Plan Disclosure [Line Items]
 
Contribution to UK Plan
$ 10.3 
Expected minimum contribution in Fiscal 2013
$ 13.7 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Oct. 27, 2012
Legal Proceedings [Line Items]
 
Favorable settlement relating to De Beers anti-trust litigation
$ 3.9 
Share-Based Compensation Expense - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 27, 2012
Oct. 29, 2011
Oct. 27, 2012
Oct. 29, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Share-based compensation expense
$ 4.3 
$ 5.3 
$ 11.4 
$ 12.3 
Loans, Overdrafts and Long-Term Debt - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
1 Months Ended 9 Months Ended
Oct. 27, 2012
May 24, 2011
Revolving Credit Facility
Oct. 27, 2012
Revolving Credit Facility
Jan. 28, 2012
Revolving Credit Facility
Oct. 29, 2011
Revolving Credit Facility
Oct. 27, 2012
Letter of Credit
Oct. 27, 2012
Financial Standby Letter of Credit
Jan. 28, 2012
Financial Standby Letter of Credit
Oct. 29, 2011
Financial Standby Letter of Credit
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
Credit facility, maximum borrowing capacity
 
$ 400 
 
 
 
 
 
 
 
Debt instruments maturity date
 
June 2013 
 
 
 
May 2016 
 
 
 
Debt instrument, maturity period
 
5 years 
 
 
 
5 years 
 
 
 
Credit facility, increase
 
 
 
 
 
200 
 
 
 
Leverage ratio, maximum
2.50 
 
 
 
 
 
 
 
 
Fixed charge coverage ratio, minimum
1.40 
 
 
 
 
 
 
 
 
Credit facility outstanding amount
 
 
 
 
 
 
Intra-period borrowings
 
 
 
 
 
 
 
 
Letter of credit outstanding amount
 
 
 
 
 
 
$ 8.2 
$ 8.2 
$ 8.5 
Subsequent Event - Additional Information (Detail) (Subsequent Event, USD $)
In Millions, unless otherwise specified
3 Months Ended
Oct. 27, 2012
Oct. 29, 2012
Subsequent Event [Line Items]
 
 
Acquired entity cash paid
 
$ 58.4 
Working capital adjustment
 
1.4 
Acquisition-related expenses
$ 2.5 
 
Outlet Centers
 
 
Subsequent Event [Line Items]
 
 
Number of operating stores
 
107 
Licensed Jewelry Departments
 
 
Subsequent Event [Line Items]
 
 
Number of operating stores
 
33