Signet Jewelers Limited reported significant financial challenges in its latest 10-Q filing for the 13 and 26 weeks ended August 3, 2024. Total sales for the second quarter were $1,491.0 million, a decline of 7.6% from $1,613.6 million in the same period of the previous year. For the first half of Fiscal 2025, sales totaled $3,001.8 million, down 8.5% from $3,281.6 million in the prior year. The North America segment contributed $1,397.6 million in Q2, down from $1,501.1 million, while the International segment saw a sharper decline, with sales of $86.5 million compared to $102.0 million in the prior year.

The company's gross margin for Q2 Fiscal 2025 was $566.3 million, representing 38.0% of sales, slightly up from 37.9% in the previous year. However, the operating loss for the quarter was $(100.9) million, a stark contrast to the operating income of $90.2 million reported in Q2 Fiscal 2024. The net loss for the quarter was $(98.5) million, compared to a net income of $75.1 million in the prior year, leading to a basic earnings per share (EPS) of $(2.28) versus $1.47.

For the first half of Fiscal 2025, the company reported a net loss of $(46.4) million, a significant drop from net income of $172.5 million in the same period last year. This decline was exacerbated by non-cash asset impairment charges totaling $168.6 million, compared to $5.6 million in the prior year. The company’s total assets decreased to $5,613.8 million from $6,087.4 million a year earlier, while total liabilities also fell to $3,473.5 million.

Strategically, Signet has focused on restructuring and transformation initiatives, including the divestiture of its UK prestige watch business for approximately $54 million and the redemption of Preferred Shares totaling $541.0 million. The company has also repurchased $47.2 million of common shares during the first half of Fiscal 2025. Despite these efforts, the company faces ongoing challenges, including competitive pricing pressures, store closures, and macroeconomic impacts on consumer spending.

Looking ahead, Signet anticipates same-store sales to range between -4.5% and +0.5% for the full fiscal year, with expectations of sequential improvements. The company continues to monitor economic conditions and their potential impact on operations, while aiming to execute its "Inspiring Brilliance" strategy for sustainable growth.