SIG Signet Jewelers Ltd

Risks

• The recent outbreak of COVID-19 has had a significant impact on the Company’s business to date in Fiscal 2021, and this outbreak, as well as other public health crises or disease outbreaks, epidemics or pandemics, could adversely impact Signet’s business, financial condition, results of operations and cash flows.
• A decline in consumer spending may unfavorably impact Signet’s future sales and earnings, particularly if such decline occurs during the Holiday Season.
• Any deterioration in consumers’ financial position, changes to the regulatory requirements regarding the granting of credit to customers or disruption in the availability of credit to customers could adversely impact the Company’s sales, earnings and the collectability of accounts receivable.
• Signet’s share price may be volatile due to Signet’s results and financial condition or factors impacting the market overall, which could have a short or long-term adverse impact on an investment in Signet stock.
• The Company’s ability to borrow is important to its operations and financial covenants, credit ratings and interest rate volatility could all impact the availability of such debt and could adversely impact the Company’s financial results.
• Global economic conditions and regulatory changes following the UK’s exit from the European Union could adversely impact Signet’s business and results of operations located in, or closely associated with, the UK.
• Fluctuations in foreign exchange rates could adversely impact the Company’s results of operations and financial condition.
• Fluctuations in the pricing and availability of commodities, particularly polished diamonds and gold, which account for the majority of Signet’s merchandise costs, could adversely impact its earnings and cash availability.
• Pursuant to the Dodd-Frank Act and SEC rules, Signet must file public disclosures regarding the country of origin of certain supplies, which could damage Signet’s reputation or impact the Company’s ability to obtain merchandise if customers or other stakeholders react negatively to Signet’s disclosures.
• Signet’s sales, operating income, cash and inventory levels fluctuate on a seasonal basis.
• Failure to manage inventory levels or to obtain merchandise that customers wish to purchase on a timely basis could have a materially adverse impact on sales and earnings.
• New tariffs, if imposed on goods that the Company imports, could have a material adverse effect on the Company’s results of operations.
• Signet depends on manufacturers and suppliers to provide it with sufficient quantities of quality products in a timely fashion.
• Signet’s pricing compared to competitors, the increased price transparency in the market and the highly fragmented competitive nature of the retail jewelry industry, may have an adverse impact on Signet’s performance.
• An inability to successfully develop and maintain a relevant OmniChannel experience for customers, failure to anticipate changing fashion trends in the jewelry industry, and poor execution of marketing programs and management of social media could result in a loss of confidence by consumers in Signet’s brand names and have an adverse impact on sales.
• Long-term changes in consumer attitudes toward jewelry could be unfavorable and harm jewelry sales.
• The Company’s inability to optimize its real estate footprint could adversely impact sales and earnings.
• The Company’s ability to satisfy the accounting requirements for “hedge accounting,” or the default or insolvency of a counterparty to a hedging contract, as well as changes in estimates, assumptions or applications in other or new accounting policies, could adversely impact results.
• The Company’s ability to recruit, train, motivate and retain suitably qualified sales associates could adversely impact sales and earnings.
• Signet’s success is dependent on the strength and effectiveness of its relationships with its various stakeholders whose behavior may be affected by its management of social, ethical and environmental risks.
• Inadequacies in and disruption to systems could result in lower sales and increased costs or adversely impact the reporting and control procedures.
• Security breaches and other disruptions to Signet’s information technology infrastructure and databases and failure of Signet’s customer-facing technology to function as intended or in accordance with applicable law could interfere with Signet’s operations, and could compromise Signet’s and its customers’ and suppliers’ information or cause other harm, exposing Signet to possible business interruptions and liability, which would have a material adverse effect on Signet’s business and reputation.
• The Company’s exposure to legal proceedings, tax matters, and/or regulatory or other investigations could reduce earnings and cash, as well as negatively impact debt covenants, leverage ratios and its reputation and divert management attention.
• Failure to comply with labor regulations could adversely affect the Company’s business.
• Collective bargaining activity could disrupt the Company’s operations, increase labor costs or interfere with the ability of management to focus on executing business strategies.
• The Company’s ability to comply with laws and regulations and adapt to changes thereto could adversely affect its business.
• Changes in existing taxation laws, rules or practices may adversely affect the Company’s financial results.
• International laws and regulations and foreign taxes could impact Signet’s ability to continue sourcing and manufacturing materials for its products on a global scale.
• Investors may face difficulties in enforcing proceedings against Signet Jewelers Limited as it is domiciled in Bermuda.
• Any difficulty or delay in executing or integrating an acquisition, a business combination or a major business or strategic initiative may result in expected returns and other projected benefits from such an exercise not being realized.
• The Company’s ability to protect intellectual property or its physical assets could have a material adverse impact on its brands, reputation and operating results.
• If the Company’s goodwill or indefinite-lived intangible assets become impaired, the Company may be required to record significant charges to earnings.
• Recent changes in the Company’s executive management team or the loss of additional key executive officers or employees could be disruptive to, or cause uncertainty in, its business or adversely impact performance.
• Signet’s business could be adversely affected by extreme weather conditions, natural disasters, or terrorism and acts of war.