v3.26.1
Income taxes
 12 Months Ended
Jan. 31, 2026
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
Signet and its Bermuda domiciled subsidiaries were not subject to income tax in Bermuda prior to Fiscal 2026. On December 27, 2023, Bermuda enacted a 15% corporate income tax that became effective for the Company in Fiscal 2026. The legislation includes a provision referred to as the economic transition adjustment (“ETA”) which was intended to provide a fair and equitable transition into the tax regime. The ETA allows companies to establish tax basis in the assets and liabilities at fair value as of September 30, 2023, excluding goodwill, of any entity subject to the tax. As a result of this provision, the Company recorded a $263.3 million deferred tax asset in the fourth quarter of Fiscal 2024 related to the tax basis of certain intangible assets, which it expects to utilize to reduce future cash taxes paid in Bermuda over approximately a 10-year period beginning in Fiscal 2026. The Organisation for Economic Co-operation and Development (“OECD”) issued guidance which would limit the cash benefit recognized under the OECD’s Pillar Two related to the $263.3 million deferred tax asset to the amortization recognized in the first two years of the 10-year period, or approximately $52.7 million.
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted in the US. The Act includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of tax treatment for certain business provisions. Upon enactment during Fiscal 2026, the Act did not have any material impact on the Company’s Fiscal 2026 effective tax rate, consolidated financial condition or results of operations.
Signet has global subsidiaries that are subject to tax in the jurisdictions in which they operate. The primary jurisdictions in which the Company’s subsidiaries are currently subject to tax are Bermuda, the US, Canada, the UK and Ireland.
(in millions)Fiscal 2026
Income before income taxes:
– Domestic (Bermuda)$197.7 
– Foreign200.4 
Total income before income taxes
$398.1 
Current taxation:
– Domestic (Bermuda)$5.9 
– Foreign77.2 
Deferred taxation:
– Domestic (Bermuda)23.7 
– Foreign(3.1)
Total income tax expense$103.7 
(in millions)Fiscal 2025Fiscal 2024
Income before income taxes:
– Domestic (US)$(165.9)$320.5 
– Foreign290.1 319.3 
Total income before income taxes
$124.2 $639.8 
Current taxation:
– Domestic (US)$64.1 $(14.8)
– Foreign29.6 24.5 
Deferred taxation:
– Domestic (US)(28.4)82.0 
– Foreign(2.3)(262.3)
Total income tax expense (benefit)
$63.0 $(170.6)
As described above, the Company is subject to a 15% Bermuda corporate income tax beginning with Fiscal 2026. The differences between the Bermuda federal income tax rate and the effective tax rates for Signet for Fiscal 2026 have been presented below:
(amounts in millions)Fiscal 2026
Bermuda statutory tax rate$59.7 15.0 %
Foreign tax effects:
US
Statutory income tax rate differential3.0 0.8 %
Impairment of goodwill11.0 2.8 %
Base Erosion and Anti-Abuse Tax7.2 1.8 %
US state income tax, net of federal effect9.1 2.3 %
Limitation on executive compensation3.8 0.9 %
Other items0.7 0.1 %
Canada
Canadian provincial income tax3.9 1.0 %
Other items0.3 0.1 %
Other foreign jurisdictions1.7 0.4 %
Worldwide changes in unrecognized tax benefits3.3 0.8 %
Effective tax rate
$103.7 26.0 %
In Fiscal 2026, the Company’s effective tax rate was higher than the Bermuda corporate income tax rate, primarily as a result of the unfavorable impact of foreign rate differences (primarily in the US) and unfavorable discrete tax items during Fiscal 2026, including non-deductible goodwill impairment charges of $53.6 million.
The statutory corporate income tax rate in Bermuda was 0% prior to Fiscal 2026. As such, the differences between the US federal income tax rate and the effective tax rates for Signet for Fiscal 2025 and Fiscal 2024 have been presented below:
Fiscal 2025Fiscal 2024
US federal income tax rates
21.0 %21.0 %
US state income taxes
7.1 %2.7 %
Differences between US federal and foreign statutory income tax rates
1.1 %0.4 %
Expenditures permanently disallowable for tax purposes, net of permanent tax benefits
0.3 %(0.4)%
Impact of global reinsurance arrangements
(32.3)%(5.8)%
Impact of global financing arrangements
(4.7)%(1.5)%
Impairment of goodwill45.7 %— %
Base Erosion and Anti-Abuse Tax7.7 %1.5 %
Unrecognized tax benefits5.7 %(2.4)%
Bermuda ETA— %(41.1)%
Valuation allowance(1.8)%(0.3)%
Other items
0.9 %(0.8)%
Effective tax rate
50.7 %(26.7)%
In Fiscal 2025, the Company’s effective tax rate was higher than the US federal income tax rate primarily as a result of impairment charges of $272.5 million related to non-deductible goodwill, partially offset by the favorable impact from the Company’s global reinsurance and financing arrangements.
In Fiscal 2024, the Company’s effective tax rate was lower than the US federal income tax rate primarily as a result of the favorable impact of the benefit of $263.3 million from the Bermuda ETA described above, as well as an uncertain tax position of $20.5 million which was settled in Fiscal 2024, the favorable impact from the Company’s global reinsurance and financing arrangements, and discrete tax benefits of $13.5 million recognized in Fiscal 2024. Discrete tax benefits relate to the reclassification of remaining taxes on the pension settlement out of AOCI, the excess tax benefit for share-based compensation which vested during the year, and a reversal of a valuation allowance related to capital losses in the UK.
Income taxes paid
The following table provides the components of cash paid for income taxes, net of refunds for Fiscal 2026:
(in millions)Fiscal 2026
Bermuda$5.3 
Foreign:
US35.4 
Ireland14.9 
Botswana5.3 
Other foreign jurisdictions16.9 
Total cash paid for income taxes, net$77.8 
Deferred taxes
The effect of temporary differences and carryforwards giving rise to deferred tax assets (liabilities) as of January 31, 2026 and February 1, 2025 consisted of the following:
January 31, 2026February 1, 2025
(in millions)Assets(Liabilities)TotalAssets(Liabilities)Total
Intangible assets$— $(71.0)$(71.0)$— $(76.0)$(76.0)
US property, plant and equipment5.5 — 5.5 — (12.4)(12.4)
Foreign property, plant and equipment— (0.4)(0.4)— (0.1)(0.1)
Inventory valuation— (231.6)(231.6)— (228.3)(228.3)
Revenue deferral59.2 — 59.2 62.7 — 62.7 
Lease assets— (257.1)(257.1)— (250.3)(250.3)
Lease liabilities275.7 — 275.7 270.3 — 270.3 
Deferred compensation9.3 — 9.3 9.8 — 9.8 
Share-based compensation6.8 — 6.8 6.6 — 6.6 
Other temporary differences18.8 — 18.8 28.3 — 28.3 
Bermuda ETA239.5 — 239.5 263.3 — 263.3 
Net operating loss carryforwards49.0 — 49.0 58.1 — 58.1 
Capital loss carryforwards12.5 — 12.5 11.3 — 11.3 
Total gross deferred tax assets (liabilities)$676.3 $(560.1)$116.2 $710.4 $(567.1)$143.3 
Valuation allowance(14.1)— (14.1)(14.9)— (14.9)
Deferred tax assets (liabilities)$662.2 $(560.1)$102.1 $695.5 $(567.1)$128.4 
Disclosed as:
Non-current assets$277.4 $301.5 
Non-current liabilities(175.3)(173.1)
Deferred tax assets, net$102.1 $128.4 
The following table is a rollforward of the Company’s deferred tax asset valuation allowance for Fiscal 2026, Fiscal 2025 and Fiscal 2024:
(in millions)Fiscal 2026Fiscal 2025Fiscal 2024
Beginning balance$14.9 $18.3 $19.0 
Credited to income tax expense(0.6)(2.2)(2.0)
Increases from acquisitions— — 1.4 
Lapsed due to expiration of benefit(1.5)(1.0)(0.3)
Foreign currency translation1.3 (0.2)0.2 
Ending balance$14.1 $14.9 $18.3 
As of January 31, 2026, Signet had deferred tax assets associated with US Federal and state net operating loss carry forwards of $27.5 million, of which $14.5 million are subject to ownership change limitations rules under Section 382 of the IRC and various US
state regulations. Federal net operating losses can be carried forward indefinitely and state net operating losses expire between 2026 and 2042. Signet had deferred tax assets associated with foreign net operating loss carryforwards of $21.5 million as of January 31, 2026, most of which can be carried forward indefinitely. As of January 31, 2026, Signet had foreign capital loss carryforward deferred tax assets of $12.5 million (Fiscal 2025: $11.3 million), which can be carried forward over an indefinite period and are only available to offset future capital gains.
The decrease in the total valuation allowance in Fiscal 2026 was $0.8 million. The valuation allowance as of January 31, 2026 primarily relates to certain state deferred tax assets and foreign capital loss carry forwards that, in the judgment of management, are not more likely than not to be realized.
Signet believes that it is more likely than not that deferred tax assets not subject to a valuation allowance as of January 31, 2026 will be offset where permissible by deferred tax liabilities or realized on future tax returns, primarily from the generation of future taxable income.
Uncertain tax positions
The following table summarizes the activity related to the Company’s unrecognized tax benefits for US federal, US state and non-US tax jurisdictions for Fiscal 2026, Fiscal 2025 and Fiscal 2024:
(in millions)Fiscal 2026Fiscal 2025Fiscal 2024
Unrecognized tax benefits, beginning of period
$28.1 $26.0 $85.9 
Increases related to current year tax positions0.5 1.4 1.5 
Increases related to prior year tax positions1.6 1.9 — 
Settlements with tax authorities
— — (59.6)
Lapse of statute of limitations(1.7)(1.2)(1.8)
Foreign currency translation0.1 — — 
Unrecognized tax benefits, end of period
$28.6 $28.1 $26.0 
As of January 31, 2026, Signet had approximately $28.6 million of unrecognized tax benefits in respect to uncertain tax positions. Signet recognizes accrued interest and, where appropriate, penalties related to unrecognized tax benefits within income taxes in the consolidated statements of operations. As of January 31, 2026, Signet had accrued interest of $19.6 million and $0.5 million of accrued penalties. If all of these unrecognized tax benefits were settled in Signet’s favor, the effective income tax rate would be favorably impacted by $44.4 million.
Signet has business activity in all states within the US and files income tax returns for the US federal jurisdiction and all applicable states. Signet also files income tax returns in the UK, Canada, Ireland and certain other foreign jurisdictions. Signet is subject to examinations by the US federal and state and Canadian tax authorities for tax years ending after November 1, 2011 and is subject to examination by the UK tax authority for tax years ending after February 1, 2015. The Company has not received any material assessments to date related to open examinations in any of the above jurisdictions; however, the Company has been engaged with various tax authorities related to inquiries in the normal course of their examinations. Should these tax authorities assess the Company for one or more of the tax positions taken within the Company’s income tax filings, and should the tax authorities prevail in such assessments, there could be a material impact on our results of operations and cash flows in future periods.
The Company’s income tax positions are based upon interpretation of the tax laws in effect in the various countries in which Signet operates at the time the position was recognized. If these tax laws, treaties or regulations, including the recent Bermuda Corporate Income Tax Act of 2023 noted above, were to change or any tax authority were to successfully challenge Signet’s assessment of the effects of such laws, treaties and regulations, a higher effective tax rate and/or higher cash tax payments may result, which could have a material adverse effect on the Company’s results of operations or cash flows.