Signet Jewelers (SIG) risk factors, FY2025 10-K

Risks Related to Global and Economic Conditions

1. 01Many of the factors affecting consumer spending are outside of our control, and a decline in consumer spending may unfavorably impact Signet’s future sales and earnings, particularly if such decline occurs during the Holiday Season
2. 02Any 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 and earnings
3. 03New tariffs, trade embargoes, sanctions or other restrictions on foreign trade, if imposed against entire nations or specific goods, supplies or materials that the Company imports, could have an adverse effect on the Company’s results of operations
4. 04In addition, if taxes, trade embargoes, sanctions or other restrictions on foreign trade are imposed by the US, UK or Canada on goods, supplies or materials that the Company imports from foreign countries, the Company’s ability to obtain the finished goods and commodities it sells at retail could be adversely impacted
5. 05To the extent that COVID-19 has affected and continues to adversely affect the US and global economy, our business, results of operations, cash flows, or financial condition, it has heightened, and may continue to heighten, other risks described herein
6. 06Fluctuations in foreign exchange rates could adversely impact the Company’s results of operations and financial condition
7. 07Our future results of operations may be adversely affected by input cost inflation
8. 08Signet’s business could be adversely affected by extreme weather conditions, natural disasters, or terrorism and acts of war

Risks Related to Our Operations and Seasonality

1. 09The jewelry industry generally is affected by fluctuations in the price and supply of natural and lab-grown diamonds, gold and, to a lesser extent, other precious and semi-precious metals and stones
2. 10of cash and/or additional management skills. Such actions may not resolve supply constraints or result in the expected returns and other projected benefits anticipated by management
3. 11Lab-grown diamonds are a meaningful portion of sales and inventory for Signet and the jewelry industry, and declining costs and retail prices could impact operating results and cause consumer dissatisfaction
4. 12Alrosa, a Russian diamond mining and distribution company, supplies more than 30% of the world’s diamonds. Sanctions against Alrosa specifically or the Russian Oligarchs by the US government or other governments have limited and may further limit the supply of diamonds in the world
5. 13Signet’s sales, operating income, cash and inventory levels fluctuate on a seasonal basis
6. 14Failure 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
7. 15Any difficulty or delay in executing or integrating an acquisition, a business combination or a major business or strategic initiative could have a material adverse impact on expected returns and other projected benefits from such an exercise
8. 16Long-term changes in consumer attitudes toward jewelry could be unfavorable and harm jewelry sales
9. 17Signet depends on manufacturers and suppliers to timely provide it with sufficient quantities of quality products

Risks Related to Technology and Security

1. 18Inadequacies in and disruption to systems could result in lower sales and increased costs or adversely impact the disclosure procedures and controls
2. 19The use of technology based on AI and machine learning (“ML”) presents risks related to confidentiality, creation of inaccurate and flawed outputs, and emerging regulatory risks which may result in reputational harm, competitive harm, or legal liability, and may adversely affect our business and results of operations

Risks Related to Competition and Innovation

1. 20Signet’s pricing compared to that of 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

Risks Related to Asset Management

1. 21The Company’s inability to optimize its real estate footprint could adversely impact sales and earnings
2. 22through cost-effective strategic store closings and targeted, limited store openings, or if there is a disruption in its relationship with its major landlords, sales could be adversely affected
3. 23The Company’s ability to protect its assets, particularly inventory and cash, or intellectual property could have a material adverse impact on its brands, reputation and operating results
4. 24If the Company’s goodwill, indefinite-lived intangible assets or long-lived assets become impaired, the Company may be required to record significant charges to earnings

Risks Related to Our Common Stock and Indebtedness

1. 25Signet’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
2. 26Shareholder activists could cause a disruption to our business
3. 27The 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

Risks Related to Human Capital

1. 28The Company’s ability to recruit, train, motivate and retain suitably qualified sales associates could adversely impact sales and earnings
2. 29Signet’s success is dependent on the strength and effectiveness of its relationships with its various stakeholders. The Company’s management of its 2030 CSGs as well as changing demand for sustainability initiatives and disclosures could result in additional costs or risks
3. 30Collective bargaining activity could disrupt the Company’s operations, increase labor costs or interfere with the ability of management to focus on executing business strategies

Risks Related to Compliance

1. 31The 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
2. 32Failure to comply with labor regulations could adversely affect the Company’s business
3. 33The Company’s ability to comply with laws and regulations and adapt to changes thereto could adversely affect its business
4. 34Changes in existing taxation laws, rules or practices may adversely affect the Company’s financial results
5. 35International laws and regulations and foreign taxes could impact Signet’s ability to continue sourcing and manufacturing materials for its products on a global scale
6. 36Stakeholders may face difficulties in enforcing proceedings against Signet Jewelers Limited as it is domiciled in Bermuda