First are the face financial statements, shown in Figure 1, below. Revenue and gross margin were both down more than 7 percent, but we were particularly intrigued with that $166 million asset impairment against Signet’s North America segment. 

Hmmm. We next opened the Disclosures & Footnotes Query page to look at Signet’s geographic segments. North America sales went from $1.501 billion in the year-ago period to only $1.398 billion this quarter, a decline of 6.9 percent. (North America accounts for roughly 90 percent of Signet’s total sales.) We then used the Export History feature to track quarterly North America sales for the last four years. See Figure 2, below.

Well, yuck; the cyclical nature of jewelry sales — with a huge spike every fiscal fourth quarter for Signet, which contains Christmas and ends just before Valentine’s Day — doesn’t give us much sense of the overall trend, which allegedly is downward. So we did some quick Excel-ing to recalculate North America sales as annual amounts. See Figure 3, below.

OK, that gives us a much better sense that North America sales jumped sharply in 2022 but have been trending downward since then. Estimating full-year fiscal 2025 sales is tough since we can’t confidently model that Q4 pop (perhaps you can), but clearly the first half of this fiscal year is underwhelming.

So back to that North America asset impairment. We next searched the Goodwill and Intangibles footnote for more information, and found this:

However, during the second quarter of Fiscal 2025, the Company recognized pre-tax impairment charges in the condensed consolidated statement of operations within its North America reportable segment related to the Diamonds Direct trade name, the Digital Banners reporting unit, and the Blue Nile trade name of $7.0 million, $123.0 million and $36.0 million, respectively, as their respective carrying values exceeded their fair values. 

Add those three sums together, and you get to the $166 million in impairments.

Still, why is the North America market stagnating? For that question we bounced to the MD&A section of the 10-Q. There, management cited a drop in the number of engagements during the pandemic, which has yet to recover to pre-pandemic levels:

The Company anticipates same store sales between -4.5% and +0.5% for full year Fiscal 2025, with sequential improvements expected to continue throughout the year, led by the engagement recovery and strength in fashion assortments and services. Although the engagement recovery has been somewhat slower than we expected, management’s data continues to point to multi-year engagement recovery back to pre-pandemic levels… While overall inflation has moderated, the Company anticipates that spending in discretionary categories may continue to be adversely impacted by high prices on consumer necessities and could further impact sales in Fiscal 2025 across all categories. The Company also continues to monitor the impact of a highly promotional competitive environment and the potential impacts on sales and gross margins for the remainder of the year. 

Notice the negative-to-flat growth rate assumption for same-store sales for the rest of the year; that doesn’t portend well for Figure 3 and FY 25’s rather pitiful sales so far. Signet is also beholden to larger trends of people postponing engagements and possible recession. 

Altogether, those forces raise some pointed questions about Signet’s future, questions that analysts might want to ask during the next earnings call. 

Our point is simply to show how Calcbench data and analytics can be put to good use now, sharpening your insights and refining what you want to study when Q3 earnings reports and quarterly filings start arriving next month. We have the data and the tools; the insights are up to you.