Signet Jewelers Limited (NYSE:SIG) Q2 2020 Earnings Conference Call Transcript
Sep 05, 2019 • 08:30 am ET
Good morning. My name is Lisa, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Signet Jewelers Second Quarter Fiscal 2020 Earnings Conference Call. [Operator Instructions] Thank you.
Randi Abada, Senior Vice President of Investor Relations, you may begin your conference.
Thank you. Lisa. Good morning, and welcome to our second quarter earnings conference call. On the call today are Signet's CEO, Gina Drosos; and CFO, Joan Hilson. During today's presentation, we will make certain forward-looking statements. Any statements that are not historical facts are subject to a number of risks and uncertainties and actual results may differ materially. We urge you to read the risk factors, cautionary language, and other disclosures in our annual report on Form 10-K and quarterly reports on Form 10-Q. Except as required by law, we undertake no obligation to revise or publicly update forward-looking statements in light of new information or future events.
During the call, we will discuss certain non-GAAP financial measures. For further discussion of the non-GAAP financial measures, as well as reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures, investors should review the news release we posted on our website at www.signetjewelers.com/investors.
I'll now turn the call over to Gina.
Virginia C. Drosos
Thank you, Randi. Good morning, everyone, and thank you for joining today's call. To begin, I would like to thank all of our Signet team members, for their support of our customers and for embracing and leading change as we continue to execute our transformation. In my remarks today, I'll start by discussing second quarter results and then preview our holiday plans and the progress toward our transformation. I'll wrap up with some brief comments on our financial guidance.
We continue to execute with diligence on our transformation priorities. In the second quarter, we delivered results above our guidance for same store sales, non-GAAP operating profit and non-GAAP EPS and grew operating profit year-over-year. Also adjusted free cash flow excluding last year's credit proceeds is up $243 million year-to-date due to effective cost control and disciplined inventory management. Despite weak overall retail industry traffic trends, our transformation initiatives for merchandise and targeted digital marketing delivered improved traffic and sales performance as we moved through the quarter. The quarter started off slowly in May and significantly improved in July, with Signet's core North America banners outperforming industry traffic trends for the overall quarter. Importantly, we delivered positive North America same store sales in the July Prime Day promotional week, both in-store and online.
Here are some highlights of our sales performance. Total company same store sales were down 1.5% in the second quarter. North America same store sales were down 1%, inclusive of an 85 basis point unfavorable impact related to a timing change to revenue recognition on service plans and a planned promotional timing shift into Q1 at Jared. E-commerce was up 9.9% in our North America banners, excluding James Allen, and up 4.4% on a consolidated basis.