Q1 2025 Signet Jewelers Limited Earnings Call

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Operator: Good morning, and welcome to Signet Jewelers' first quarter fiscal 2025 earnings call. At this time, all lines are in a listen-only mode.

Operator: Good morning, and welcome to Signet Jewelers' first quarter fiscal 2025 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we welcome back a question-and-answer session. If at any time during this call, you require immediate assistance. These stress stars you're over the operator. These note: this event is being recorded. Joining us on the call today are Rob Ballew, Senior Vice President of Investor Relations. Gina Drosos, Chief Executive Officer, and Joan Hilson, Chief Financial, Strategy and Services Officer.

Speaker Change: Good morning, and welcome to Signet Jewelers first quarter fiscal 2025 earnings call. At this time all lines are in a listen only mode. Following the presentation. We will conduct a question and answer session. If at any time. During this call you require immediate assistance. Please press star zero for operator.

Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Please note this event is being recorded. Joining us on the call today are Rob Ballew, Senior Vice President of Investor Relations. Gina Drossos, Chief Executive Officer, and Joan Hilson, Chief Financial Strategy and Services Officer. At this time, I would like to turn this conference over to Mr. Rob Ballew, Senior Vice President of Investor Relations. Please go ahead, sir.

Speaker Change: Please note. This event is being recorded joy.

Speaker Change: Joining us on the call today are Rob Ballew, Senior Vice President of Investor Relations.

Speaker Change: <unk>, Chief Executive Officer, and Joan Hilson, Chief Financial strategy and services officer at this time I would like to turn this conference over to Mr. Robert <unk> Senior Vice President of Investor Relations. Please go ahead Sir.

Robert Ballew: At this time, I would like to turn this conference over to Mr. Rob Ballew, Senior Vice President of Investor Relations.

Robert Ballew: Please go ahead, sir. Good morning, welcome to Signet Jewelers' first quarter fiscal 2025 earnings conference call. During today's discussion, we will make certain forward-looking statements. Any statements that are not historical facts are subject to a number of risks and uncertainties. Actual results may differ materially.

Robert Ballew: Good morning. Welcome to Signet Jewelers' first quarter fiscal 25 earnings conference call. During today's discussion, we will make certain forward-looking statements. Any statements that are not historical facts are subject to a number of risks and uncertainties. The actual results may differ materially.

Speaker Change: Good morning, welcome to the Signet Jewelers first quarter fiscal 'twenty five earnings conference call. During today's discussion we will make certain forward looking statements any statements that are not historical facts are subject to a number of risks and uncertainties.

Speaker Change: Actual results may differ materially.

Robert Ballew: We urge you to read the risk factors, cautionary language, and other disclosures in our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. 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 reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure, investors should review the news release we posted on our website at ir.signetjewelers.com. Additionally, a new investor presentation deck was also posted to our IR website this morning that we believe investors will find helpful. With that, I'll turn the call over to Jenna.

Robert Ballew: We urge you to read the risk factors, cautionary language, and other disclosures in our Annual Report on Form 10-K. Quarterly reports on Form 10-K and current reports on Form 8-K.

Hershey to read the risk factors cautionary language and other disclosures in our annual report on Form 10-K quarterly reports on Form 10-Q, and current reports on form 8-K.

Robert Ballew: 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 reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure, investors should review the news release and posted on our website at IR.SignetJewelers.com.

Speaker Change: 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.

Speaker Change: During the call we will discuss certain non-GAAP financial measures for further discussion of the non-GAAP financial measures as well as a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure investors should review the news release, we posted on our website at IR Signet Jewelers Dot com.

Robert Ballew: Additionally, a new investor presentation deck was also posted to our IR website this morning that we believe investors will find helpful.

Speaker Change: Additionally, a new investor presentation deck was also posted to our IR website. This morning that we believe investors will find helpful with that I'll turn the call over to Jeff.

Virginia C. Drosos: With that, I'll turn the call over to Jim. Thanks, Rob, and good morning, everyone. I'd first like to thank our Signet team for delivering our expectations for the quarter. This continues to be a challenging environment with macro pressure on the consumer and heightened discount activity among many jewelry participants. Our team's tenacity and commitment to our customers is delivering our success and is an inspiration to me every day.

Virginia C. Drosos: Thanks Rob and good morning everyone. I'd first like to thank our Signet team for delivering our expectations for the quarter. This continues to be a challenging environment with macro pressure on the consumer and heightened discount activity among many jewelry participants. Our team's tenacity and commitment to our customers is delivering our success and is an inspiration to me every day. I'd like to leave you with three key takeaways today.

Jeff: Thanks, Rob and good morning, everyone I'd first like to thank our signet team for delivering our expectations for the quarter. This continues to be a challenging environment with macro pressure on the consumer and heightened discount activity among many jewelry participants.

Jeff: Our team's tenacity and commitment to our customers is delivering our success and is an inspiration to me every day.

Gina Drosos: I'd like to leave you with three key takeaways today. First, we deliver quarterly results within our guidance and are seeing momentum in the business driven by the accelerating engagement recovery, the success of our new fashion product offerings, and it continues strong performance in jewelry services. Second, we increase guidance for the year in April and are reaffirming that higher guide, which includes an inflection to positive same store sales in the second half of the year. Third, our flexible operating model is working as designed, driving margin performance, strong free cash flow conversion, and improving our balance sheet.

Jeff: I'd like to leave you with three key takeaways today.

Virginia C. Drosos: First, we delivered quarterly results within our guidance and are seeing momentum in the business driven by the accelerating engagement recovery, the success of our new fashion product offerings, and a continued strong performance in jewelry services. Second, we increased guidance for the year in April and are reaffirming that higher guidance, which includes an inflection to positive same-store sales in the second half of the year. Third, our flexible operating model is working as designed, driving margin performance, strong free cash flow conversion, and improving our balance sheet, all of which are delivering meaningful growth to adjusted diluted EPS. For perspective, our adjusted diluted EPS this quarter is nearly 14 times higher than pre-pandemic. And we've more than doubled our adjusted operating income. I'll now elaborate on each of these important takeaways.

Jeff: First we delivered quarterly results within our guidance and are seeing momentum in the business driven by the accelerating engagement recovery.

Jeff: Success of our new fashion product offerings, and our continued strong performance in jewelry services.

Jeff: Second we increased guidance for the year in April and are reaffirming that higher guide, which includes an inflection to positive same store sales in the second half of the year.

Third our flexible operating model is working as designed driving margin performance strong free cash flow conversion and improving our balance sheet, all of which are delivering meaningful growth to adjusted diluted EPS.

Gina Drosos: All of which are delivering meaningful growth to adjusted diluted EPS. For perspective, our adjusted deluded EPS this quarter is nearly 14 times higher than free pandemic, and we've more than doubled our adjusted operating income.

For perspective, our adjusted diluted EPS. This quarter is nearly 14 times higher than pre pandemic and we've more than doubled our adjusted operating income.

Gina Drosos: I'll now elaborate on each of these important takeaways. This quarter, we delivered $1.5 billion in sales and $58 million in adjusted operating income in the top half of guidance. We call that February with sluggish for retail. We saw trends begin to improve with rate Valentine's Day shopping, and further momentum through March and April, delivering a quarter with meaningful acceleration to Q4. In bridal, we've seen the expected sequential improvement in engagements to last quarter, excluding our digital banners. From low double-digit decline in the fourth quarter, we've seen engagements improved to mid-single-digit decline in Q1, with April and May reflecting low single-digit decline.

I'll now elaborate on each of these important takeaways.

Virginia C. Drosos: This quarter, we delivered $1.5 billion in sales and $58 million in adjusted operating income in the top half of guidance. Recall that February was sluggish for retail. We saw trends begin to improve with late Valentine's Day shopping and further momentum through March and April, delivering a quarter with meaningful acceleration to Q4. In Bridal, we saw the expected sequential improvement in engagements compared to last quarter, excluding our digital banners. From a low double-digit decline in the fourth quarter, we've seen engagements improve to mid-single-digit decline in Q1, with April and May reflecting low single-digit declines.

Jeff: This quarter, we delivered $1.5 billion in sales and $58 million and adjusted operating income in the top half of guidance.

Jeff: We call that February was sluggish for retail we saw trends begin to improve with a late Valentine's day shopping and further momentum through March and April delivering a quarter with meaningful acceleration into Q4.

Jeff: In bridal, we've seen the expected sequential improvement in engagements to last quarter, excluding our digital banners.

Jeff: From low double digit decline in the fourth quarter, we've seen engagements improve to mid single digit decline in Q1 with April and May reflecting a low single digit decline.

Gina Drosos: Our most bridal-focused banner, Diamond Sterect, has already inflicted positive units in April, with Kay and Jared having delivered several weeks of unit growth in recent months. Engagement units, the low $5,000, were flat last year in April. We are seeing slower recovery at price points above $5,000, in part due to the digital banner challenges we discussed last quarter, which contributed to a small decrease in average transaction value or ATV. Engagement continued to improve in May, and we anticipate further improvement as the second quarter progresses. Our proprietary data continues to point to a multi-year recovery, and we believe we remain on track to see engagements in the US, increased 5% to 10% for fiscal 2025.

Virginia C. Drosos: Our most bridal focus spanner, Diamonds Direct, has already inflected to positive units in April, with Kay and Jared having delivered several weeks of unit growth in recent months. Engagement units below $5,000 were flat last year in April.

Jeff: Our most bridal focus scanner diamonds direct has already inflected to positive units in April with Kay and Jared haven't delivered several weeks of unit growth in recent months.

Virginia C. Drosos: We are seeing slower recovery at price points above $5,000, in part due to the digital banner challenges we discussed last quarter, which contributed to a small decrease in average transaction value or ATV. Engagements continue to improve in May, and we anticipate further improvement as the second quarter progresses. Our proprietary data continues to point to a multi-year recovery, and we believe we remain on track to see engagements in the U.S. increase 5 to 10 percent for fiscal 2025. We are continuing to leverage our data on 17 million individuals in a dating relationship to do targeted marketing at the right time to win the bridal recovery.

Jeff: Engagement units below $5000 were flat to last year in April we are seeing slower recovery at price points above $5000 in part due to the digital banner challenges, we discussed last quarter, which contributed to a small decrease in average transaction value or a T V.

Jeff: Engagements continue to improve in May and we anticipate further improvement as the second quarter progresses.

Jeff: Our proprietary data continues to point to a multiyear recovery and we believe we remain on track to see engagements in the U S increased 5% to 10% for fiscal 'twenty 'twenty Fives, we are continuing to leverage our data on 17 million individuals in the data right.

Gina Drosos: We are continuing to leverage our data on 17 million individuals in a dating relationship to do targeted marketing at the right time to win the bridal recovery. Sales of fashion merchandise are also gaining momentum. From March to May, fashion sales improved in nearly 500 basis points, compared to February in the fourth quarter, driven by branding and new merchandise items. We continue to see strong self-rove newness, with new merchandise as a percent of sales, up more than 25% to this time last year in core banners. For example, revenues from the Shy collection at Jared and our Unstoppable Love collection at Kay are both up materially, driven by strong performance of new items in those assortment.

Jeff: Patient ship to do targeted marketing at the right time to win the bridal recovery.

Virginia C. Drosos: Sales of fashion merchandise are also gaining momentum. From March through May, fashion sales improved by nearly 500 basis points compared to February in the fourth quarter, driven by branding and new merchandise items. We continue to see strong sell-through of newness, with new merchandise as a percent of sales up more than 25% compared to this time last year in core banners. For example, revenue from the Shy collection at Jared and our Unstoppable Love collection at Kay are both up materially, driven by the strong performance of new items in those assortments.

Jeff: Sales of fashion merchandise are also gaining momentum from March through May fashion sales improved nearly 500 basis points compared to February in the fourth quarter, driven by branding and new merchandise items, we continue to see strong sell through of newness with new merchandise.

Jeff: As a percent of sales.

Jeff: For more than 25% to this time last year and core banners for example revenue from the shy collection at Jared and our unstoppable Love collection at K are both up materially driven by strong performance of new items and those assortments. Our new product strategy is also working to protect our E T.

Virginia C. Drosos: Our new product strategy is also working to protect our ATV as well as to expand merchandise margins. We leverage our scale to innovate at attractive price points, delivering strong value for our customers. These include items such as lab-created diamond fashion pieces and precious metal jewelry, including gold, silver, and platinum.

Gina Drosos: Our new product strategy is also working to protect our ATV as well as expand merchandise margins. We leverage our scale to innovate at attractive price points, delivering strong value for our customers. These include items such as lab created diamond fashion pieces and precious metal jewelry, including gold, silver, and platinum. For example, the strength of our branded nail link collection held a near flat ATV to this quarter last year, while delivering a 20% increase in units. Further, our value focused fashion banner, Banter by Piercing Kagoda, had flat same store sales in the quarter on the continued strength of our gold assortment.

Jeff: V as well as expand merchandise margins.

Jeff: We've leveraged our scale to innovate at attractive price points delivering strong value for our customers.

Jeff: These include items, such as lab created diamond fashion pieces, and precious metal jewelry, including gold silver and platinum.

Virginia C. Drosos: For example, the strength of our branded Neoling collection held a near flat ATV to this quarter last year while delivering a 20 percent increase in units. Further, our value-focused fashion banner, Banter by Piercing Pagoda, had flat same-store sales in the quarter on the continued strength of our gold assortment. We saw this same trend extend to Peoples in Canada and H. Samuel in the UK.

Jeff: For example, the strength of our branded Neil Lane collection held a near flat H E. B to this quarter last year, while delivering a 20% increase in units.

Jeff: Further our value focused fashion banner banter by piercing pagoda had flat same store sales in the quarter on the continued strength of our gold assortment.

Gina Drosos: We saw the same trends extend the people's in Canada and age Samuel in the UK. Another key driver of fashion is our loyalty program, which delivers a more personalized shopping experience and grows lifetime value. This includes targeted marketing to drive follow-up purchases in fashion. It's working. In Q1, the penetration of active loyalty members purchasing fashion increased 20 points compared to a year ago. We've also extended efforts to win new members to include engagement ring recipients, which has contributed to a more than 25% increase in total members that's fiscal 24 year end. Our targeted marketing provides members value and select merchandise based on their tastes and shopping preferences, and is a key strategy in our merchandise margin expansion plan.

Jeff: We saw the same trends extended peoples in Canada, and H Samuel in the UK another.

Virginia C. Drosos: Another key driver of fashion is our loyalty program, which delivers a more personalized shopping experience and grows lifetime value. This includes targeted marketing to drive follow-up purchases in fashion. And it's working.

Jeff: Another key driver of fashion is our loyalty program, which delivers a more personalized shopping experience and gross lifetime value isn't.

Jeff: This includes targeted marketing to drive follow on purchases in fashion. It's working in Q1, the penetration of active loyalty members purchasing fashion increased 20 points compared to a year ago.

Virginia C. Drosos: In Q1, the penetration of active loyalty members purchasing fashion increased 20 points compared to a year ago. We've also extended efforts to win new members to include engagement ring recipients, which has contributed to a more than 25% increase in total members since fiscal 24 year end. Our targeted marketing provides members value and select merchandise based on their tastes and shopping preferences and is a key strategy in our Merchandise Margin Expansion Plan.

Jeff: We've also extended efforts to win new members to include engagement ring recipients, which has contributed to a more than 25% increase in total numbers since fiscal 'twenty for year end.

Jeff: Our targeted marketing provides members value and select merchandise based on their taste and shopping preferences and is a key strategy in our merchandise margin expansion plan.

Virginia C. Drosos: Before moving on from fashion, I'd like to provide an update on lab-created diamonds, or LCDs. Over the past five years, LCD production has grown more efficient. This has allowed LCD costs in retail to come down, providing attractive options for many price-conscious customers that are looking for larger carat options than they can afford in a natural diamond engagement ring. Our merchandise strategy and trade-up selling has been effective at largely maintaining our ATV, while many engagement ring consumers looking to maintain a long-term value continue to be attracted to natural diamonds for their rarity and uniqueness. In fashion, however, we see meaningful runway for LCD expansion in a segment of the industry that has traditionally seen lower overall penetration of the natural diamond assortment. It's a trade-up opportunity.

Gina Drosos: Before moving on from fashion, I'd like to provide an update on lab-created diamonds or LCDs. Over the past five years, LCD production has grown more efficient. This is allowed. LCD costs and retails to come down, providing attractive options for many price conscious customers that are looking for larger targeted options than they can afford in the natural diamond engagement ring. Our merchandise strategy and trade-up selling has been effective at largely maintaining our ATV, while many engagement ring consumers looking to maintain a long-term value continue to be attracted to natural diamonds for their rarity and uniqueness. In fashion, however, we see meaningful runway for LCD expansion in a segment of the industry that is traditionally seen lower overall penetration of natural diamond assortment.

Jeff: Before moving on from fashion I'd like to provide an update on the lab created diamonds or L. C. DS over the past five years LCD production has grown more efficient.

Jeff: This has allowed LCD costs and retails to come down providing attractive options for many price conscious customers that are looking for larger karat options than they can afford and that natural diamond engagement ring.

Jeff: Our merchandise strategy and trade up selling has been effective at largely maintaining our a T V. While many engagement ring consumers looking to maintain a long term value continue to be attracted to natural diamonds for their rarity and uniqueness.

Jeff: In fashion, However, we've seen meaningful runway for LCD expansion in a segment of the industry that has traditionally seen a lower overall penetration of natural diamond assortment, it's a trade up opportunity.

Gina Drosos: It's a trade-up opportunity. For example, in Q1, we've increased LCD fashion offerings, driving a 14% increase in LCD fashion revenue compared to a year ago. These LCD fashion pieces carry more than two times the ATV of non-LCD pieces at attractive margins for signal.

Virginia C. Drosos: For example, in Q1, we increased our LCD fashion offerings, driving a 14 percent increase in LCD fashion revenue compared to a year ago. These LCD fashion pieces carry more than two times the ATV of non-LCD pieces at attractive margins for Signet. My next takeaway builds off my first.

Jeff: For example in Q1, we've increased OCD fashion offerings, driving a 14% increase in LCD fashion revenue compared to a year ago.

Jeff: L C D fashion pieces carry more than two times, the ATV of non L. C D pieces at attractive margins for Cigna.

Virginia C. Drosos: My next takeaway builds off my first. We remain on track to and flex to positive same store sales in the second half of this year. The building blocks of our Q1 performance will gain strength as the year plays out. We will further increase the penetration of merchandise, newness in our inventory through more frequent deliveries and increased depth of new product offerings. We also believe our competitive advantages, such as scale, consumer insights, and technology, provide significant opportunity to continue to draw fashion and bridal categories in of challenging macro environment. There are two leading indicators that we believe point to sales traction.

Virginia C. Drosos: We remain on track to inflect positive same-store sales in the second half of this year. The building blocks of our Q1 performance will gain strength as the year plays out. We will further increase the penetration of merchandise newness in our inventory through more frequent deliveries and increased depth of new product offerings. We also believe our competitive advantages, such as scale, consumer insights, and technology, provide Signet the opportunity to continue to drive fashion and bridal categories in a challenging macro environment.

Jeff: My next takeaway builds off my first we remain on track to inflect positive same store sales in the second half of this year.

Jeff: The building blocks of our Q1 performance will gain strength as the year plays out.

Jeff: We will further increase the penetration of merchandise newness in our inventory through more frequent deliveries and increased depth of new product offerings. We also believe our competitive advantages such as scale consumer insights and technology provides the opportunity to continue to drive fashion and <unk>.

Jeff: Bridal categories in a challenging macro environment.

Virginia C. Drosos: There are two leading indicators that we believe point to sales traction. First, our largest banner in each country we operate delivered flat or positive comp sales in May. Second, our e-commerce sales, excluding our digital banners, also comped positive in May. Our optimized physical and digital footprints are a competitive advantage with jewelry shoppers. It's the combination of both footprints that provides for connected commerce capabilities like ship from store and virtual jewelry consultants or JC's.

Jeff: There are two leading indicators that we believe point to sales traction.

Gina Drosos: First, our largest banner in each country we operate has delivered flat or positive comp sales in May. Second, our e-commerce sales, excluding our digital dinners, also comp positive in May. Our optimized physical and digital footprints are a competitive advantage with jewelry shoppers. It's the combination of both footprints that provide for connected commerce capabilities like ship from store and virtual jewelry consultants or JC's. More recently, we've introduced social selling capabilities for our JC's, which are showing a positive impact already. Our jewelry consultants are combining their social outreach with personalized store fronts, and we expect social selling will triple its revenue contribution in fiscal 25, or approximately half a point of Signet comp growth this year.

Jeff: Our largest banner in each country, we operate has delivered flat or positive comp sales in may.

Jeff: Our e-commerce sales, excluding our digital banners also comped positive in May.

Our optimized physical and digital footprints are a competitive advantage with jewelry shoppers. It's the combination of both footprints that provides for connected commerce capabilities like ship from store and virtual jewelry consultants or J sees more recently, we've introduced social selling capabilities for our J C.

Virginia C. Drosos: More recently, we've introduced social selling capabilities for our JC's, which are showing a positive impact already. Our jewelry consultants are combining their social outreach with personalized storefronts, and we expect social selling will triple its revenue contribution in fiscal 25, or approximately half a point of Signet comp growth this year. Last quarter, we spoke about the integration challenges with our digital banners.

Jeff: Which are showing a positive impact already our jewelry consultants are combining their social outreach with personalized storefront and we expect social selling will triple its revenue contribution in fiscal 'twenty, five or approximately half a point of signet comp growth this year.

Gina Drosos: Last quarter, we spoke about the integration challenges at our digital banners. Planned interventions are underway and showing progress. For example, we're working to correct or establish inventory API connections with our just-in-time vendors to streamline our supply chain management and improve the speed of our fulfillment. And we've launched a fast shipping program for select wedding bans that we can create in-house. As a reminder, our full-year guidance does not include any improvement in our digital banners.

Jeff: Last quarter, we spoke about the integration challenges at our digital banners.

Virginia C. Drosos: Planned interventions are underway and showing progress. For example, we're working to correct or establish inventory API connections with our just-in-time vendors to streamline our supply chain management and improve the speed of our fulfillment. And we've launched a fast shipping program for select wedding bands that we can create and help. As a reminder, our full year guidance does not include any improvement in our digital banners.

Jeff: Plans interventions are underway and showing progress.

Jeff: For example, we are working to correct or establish inventory API connections with our just in time vendors to streamline our supply chain management and improve the speed of our fulfillment.

Jeff: And we've launched a fast shipping program for select wedding bands that we can create in house.

Jeff: As a reminder, our full year guidance does not include any improvement in our digital banners. We will continue to provide operational updates as the year progresses.

Virginia C. Drosos: We'll continue to provide operational updates as the year progresses. Service revenue growth outpaced merchandise by more than 10 points in the first quarter, driven by a 550 basis point increase in attachment rate. Our newer service offerings, including post-repair extended service agreements, are performing well. As merchandise sales improve, services will also benefit, especially from engagement rings, which have more than 80% in-store attachment.

Gina Drosos: We'll continue to provide operational updates as the year progresses. Service revenue growth outpaced merchandise by more than 10 points in the first quarter, driven by a 550 basis point increase in attachment rate. Our newer service offerings, including post-repair extended service agreements, are performing well. As merchandise sales improve, services will also benefit, especially from engagement rings, which have more than 80% in-store attachment.

Jeff: Service revenue growth outpaced merchandise by more than 10 points in the first quarter driven by a 550 basis point increase in attachment rate.

Jeff: Our newer service offerings, including post repair extended service agreements are performing well.

Jeff: As merchandize sales improve services will also benefit, especially from engagement rings, which have more than 80% in store attachment.

Virginia C. Drosos: Turning to my final takeaway for this quarter, our flexible operating model and strong free cashflow conversion are driving meaningful impact to our adjusted diluted EPS. Recall that we've generated more than $600 million in pro forma free cash flow in each of the last four years, driven by operating margin expansion of approximately 400 basis points to pre-pandemic. This provided the dry powder to reduce our debt outstanding by approximately 70% since fiscal 20 today.

Virginia C. Drosos: Turning to my final takeaway for this quarter, our flexible operating model and strong free cash flow conversion are driving meaningful impact to our adjusted-deluded EPS. We call that we've generated more than $600 million in pro-forma three cash flow in each of the last four years, driven by operating margin expansion of approximately 400 basis points to pre-pandemic. This provided the dry powder to reduce our debt outstanding by approximately 70% since fiscal 20 to date. We increased our EPS guidance in April by 9 to 10%, reflecting the redemption of preferred shares. This will continue to be a positive impact into fiscal 26.

Jeff: Turning to my final takeaway for this quarter, our flexible operating model and strong free cash flow conversion are driving meaningful impact to our adjusted diluted EPS recall that we've generated more than $600 million and pro forma free cash flow in each of the last four.

Years, driven by operating margin expansion of approximately 400 basis points to pre pandemic.

Jeff: This provided the dry powder to reduce our debt outstanding by approximately 70% since fiscal 'twenty to date.

Virginia C. Drosos: We increased our EPS guidance in April by 9 to 10 percent, reflecting the redemption of preferred shares. This will continue to have a positive impact into fiscal 26, as the redemption of the preferreds will reduce our share count by 8.2 million shares from the end of fiscal 2024. We continue to expect strong free cash conversion. With our balance sheet now in great shape, we will focus excess liquidity on investing in the business, returning significant capital to shareholders, and leveraging opportunistic M&A in order to drive shareholder value.

Jeff: We increased our EPS guidance in April by 9% to 10%, reflecting the redemption of preferred shares. This will continue to be a positive impact into fiscal 'twenty six as the redemption of the preferreds will reduce our share count by eight 2 million shares from the end of fiscal 2000.

Gina Drosos: As redemption of the preferred, we'll reduce our share count by 8.2 million shares from the end of fiscal 2024. We continue to expect strong free cash conversion. With our investing in the business, returning significant capital to shareholders, and leveraging opportunistic MNA in order to drive shareholder value.

Jeff: 24.

Jeff: We continue to expect strong free cash conversion with our balance sheet now in great shape, we will focus excess liquidity on investing in the business returning significant capital to shareholders and leveraging opportunistic M&A in order to drive shareholder value.

Virginia C. Drosos: To summarize, the three key takeaways for today are first, we delivered on our commitments again this quarter. Second, we are on track to see an inflection to positive same-source sales in the second half of this year. And third, our flexible operating model is driving EPS growth through higher margins and strong free cash flow. With that, I'll turn it over to Joan.

Gina Drosos: To summarize, the three key takeaways for today are, first, we delivered on our commitment again this quarter. Second, we are on track to see an inflection to positive same source sales in the second half of this year. And third, our flexible operating model is driving EPS growth through higher margins and strong free cash flow.

Jeff: To summarize the three key takeaways for today are first we delivered on our commitments again this quarter.

Jeff: Second we are on track to see an inflection to positive same store sales in the second half of this year and third our flexible operating model is driving EPS growth through higher margins and strong free cash flow.

Joan M. Hilson: With that, I'll turn it over to Jen. Thanks, Jenna, and good morning, everyone. Revenue for the quarter was $1.5 billion, just above the bid point of our guidance. Same source sales were down at 8.9% to last year, including approximately 2 points of pressure from the digital banners, as expected. This also reflects improvements in March and April from the slower start we saw in February.

Speaker Change: With that I'll turn it over to John.

Joan M. Hilson: Thanks, Jenna, and good morning, everyone. Revenue for the quarter was $1.5 billion, just above the midpoint of our guidance. Same-store sales were down 8.9% compared to last year, including approximately two points of pressure from the digital banners, as expected. This also reflects improvements in March and April from the slower start we saw in February. We were able to largely hold ATV even with continued heightened promotions in our industry as North America declined just 1.6% from last year. Lou Stone saw the largest decline in ATV, which disproportionately impacts Jared, Diamonds Direct, and our digital banners. While finished products maintained ATV through branding and product innovation, traffic was down to low single digits.

John: Thanks, Jen and good morning, everyone.

John: Revenue for the quarter was $1 5 billion just above the midpoint of our guidance.

John: Same store sales were down eight 9% to last year, including approximately two points of pressure from the digital banners as expected.

John: It also reflects improvements in March and April from the slower start we saw in February.

John: We were able to largely hold ATV, even with continued heightened promotions that are industry as North America declined just one 6% to last year.

John: Blue stone saw the largest decline in ATV, which disproportionately impacts Jared diamond's direct and our digital banners.

John: Well finished products maintained to ATV through branding and product innovation.

John: Traffic was down low single digits.

Joan M. Hilson: Services grew 1.3%, reflecting an increased attachment rate and pricing on ESAs. We continue to develop training and technology improvements that our jewelry consultants use to educate customers on the lifetime value of our service offering. With an in-store bridal attachment rate of over 80%, we will see tailwinds from the engagement recovery, and we see significant opportunity to further build on the current fashion attachment rate of approximately 40%. We delivered a gross margin of $572 million this quarter, or approximately 38% of sales, in line with the prior year on lower revenue.

Services grew one 3%, reflecting an increased attachment rate and pricing on Esa.

John: We continue to develop training and technology improvements that our jewelry consultants use to educate customers on the lifetime value of our service offerings with them.

John: And in store bridal attachment rate over 80%, we will see tailwind from the engagement recovery and we see significant opportunity to further build on the current fashion the attachment rate of approximately 40%.

John: We delivered gross margin of $572 million this quarter or approximately 38% of sales in line with the prior year on lower revenue.

Joan M. Hilson: Adjusted merchandise margin expanded by 100 basis points, led by growth in services and product newness, including expansion of lab-grown diamonds within fashion, but was offset by deleveraging of occupancy costs on lower sales. Turning to Desk Jeanne, our adjusted expense of $515 million was $9 million lower than last year, even with increased marketing spend for Mother's Day. Adjusted SG&A was 34% of sales, or 270 basis points higher than last year, as we de-leveraged fixed costs on lower revenues. Adjusted operating income was $58 million for the quarter, or 4% of sales, and at the high end of our guidance expectation. Adjusted EPS for the quarter was $1.11 per diluted share.

John: Adjusted merchandise margin expanded by 100 basis points led by growth in services and product newness, including expansion of lab grown diamonds within fashion, but was offset by deleveraging of occupancy costs on lower sales.

John: Turning to SG&A, our adjusted expense of $515 million was $9 million lower than last year, even with increased marketing spend for mother's day.

John: Adjusted SG&A was 34% of sales or 270 basis points higher than last year, as we deleverage fixed costs on lower revenue.

John: Adjusted operating income was $58 million for the quarter or 4% of sales and at the high end of our guidance expectations.

John: Adjusted EPS for the quarter was $1.11 per diluted share.

Joan M. Hilson: With the redemption of half of the preferred shares and the Net Shares Settlement Agreement, we averaged $48 million in fully diluted shares this quarter, a reduction of 10% from the end of Fiscal 24. Turning to inventory, we entered the quarter at $2 billion, down 9% from last year, in line with revenue, even while investing in additional new products. We're optimizing the pace at which we take markdowns and are strategically using clearance to reduce inventory levels of less productive and lower margin products in order to bring in higher margin, more relevant merchandise.

John: With the redemption of half of the preferred shares and the net share settlement agreement, we averaged 48 million fully diluted shares for the quarter a reduction of 10% from the end of fiscal 'twenty four.

John: Turning to inventory, we ended the quarter at $2 billion down 9% to last year in line with revenue, even while investing in additional new products.

John: We're optimizing the pace at which we take markdowns and are strategically using clearance to reduce inventory levels of less productive and lower margin products in order to bring in higher margin more relevant merchandise.

Joan M. Hilson: Turning to leverage, we ended the quarter with gross debt to adjusted EBITDA at 2.2 times turns, with net debt to adjusted EBITDA approximately flat, which reflects the preferred share redemption in April. We will retire our unsecured senior debt in the coming days, and we have the liquidity to address the remaining preferred shares this year. These efforts on our balance sheet have been noted by recent ratings upgrades by both S&P and FIT.

John: Turning to leverage we ended the quarter with gross debt to adjusted EBITDAR at two two times churns, but the net debt to adjusted EBITDA, approximately flat, which reflects the preferred share redemption in April.

John: We will retire our unsecured senior debt in the coming days and we have the liquidity to address the remaining preferred shares this year.

John: These efforts on our balance sheet have been noted by recent ratings upgrades by both S&P and Fitch.

Joan M. Hilson: While we are on track to have zero debt in the coming months, we believe a modest amount of debt in our capital structure is the most efficient way to drive returns for our shareholders. Funded debt is also required to maintain a public credit rating, which is important to provide flexibility in the future.

John: While we are on track to have zero debt in the coming months, we believe a modest amount of debt in our capital structure is the most efficient way to drive returns for our shareholders funded debt is also required to maintain a public credit rating, which is important to provide flexibility in the future.

Joan M. Hilson: As such, we will explore options in the market this year to lower our weighted average cost of capital, boost dry powder for opportunistic investments, and return excess cash to shareholders, all while remaining well below our leverage target. Any amount borrowed will be modest and materially lower than where we ended the year in fiscal 24. On fleet optimization, we closed 23 stores this quarter, primarily under our Ernest Jones banner.

John: As such we will explore options in the market this year to lower our weighted average cost of capital boost dry powder for opportunistic investments and return excess cash to shareholders.

John: All while remaining well below our leverage targets.

John: The amount of borrowings will be modest and materially lower than where we ended the year in fiscal 'twenty four.

John: And fleet optimization, we closed 23 stores this quarter, primarily in our earnest Jones banner.

Joan M. Hilson: We have also materially reduced our overhead costs in the UK going forward. Both were part of our previously announced efforts to improve the performance and margins of our UK business. We remain on track to open 20 to 30 stores and renovate approximately 300 existing stores this year. Looking to guidance, we expect second quarter revenue in the range of $1.46 to $1.52 billion, with same store sales down in the range of 6% and 2%, a material improvement from the first quarter.

We also materially reduced our overhead costs in the UK going forward.

John: Both were part of our previously announced efforts to improve their performance and margins of our UK business.

John: Remain on track to open 20 to 30 stores and renovate approximately 300 existing stores this year.

John: Looking to guidance, we expect second quarter revenue in the range of $1.46 billion to $152 billion with same store sales down in the range of 6% and 2% in material improvement from the first quarter. We believe that engagement will continue to improve.

Joan M. Hilson: We believe that engagement will continue to improve in the second quarter with some AUR pressure in loose stone. We expect flat to higher gross margins with similar SG&A to leverage compared to the first. We expect adjusted operating income between $50 and $75 million and adjusted EBITDA between $98 to $123 million. We are reaffirming our full-year guidance today. However, there are two potential impacts we are watching. First, the potential early redemption of further outstanding preferred shares may lower our diluted share count and reduce our preferred dividends this year, both of which would boost our adjusted diluted EPS.

John: The second quarter with some AUR pressure in loose stones, we expect flat to higher gross margins with similar SG&A deleverage compared to the first quarter.

John: We expect adjusted operating income between 50 and $75 million.

John: And adjusted EBITDA between $98 million to $123 million.

John: We are reaffirming our full year guidance. Today. However, there are two potential impacts we are watching first the potential early redemption of further outstanding preferred shares may lower our diluted share count and reduced our preferred dividends this year.

John: Both of which would boost our adjusted diluted EPS.

Joan M. Hilson: Second, heightened competitive discounting may pressure margins into the back half more than we expected at the beginning of the year. We are monitoring the potential impact of this discounting on our gross margins for the full year, while we work to mitigate that impact in the second half of fiscal 25 through assortment architecture and balanced promotional strategies. We continue to expect engagement incidents to be up 5% to 10% for the year, and we also continue to expect to spend $160 to $180 million in capital expenditures.

John: Second heightened competitive discounting may pressure margins into the back half more than we expected at the beginning of the year. We are monitoring the potential impact of this discounting to our gross margins for the full year, while we work to mitigate that impact in the second half of fiscal 'twenty five through assortment architecture.

John: And balanced promotional strategies, we continue to expect engagement incidents to be up 5% to 10% for the year.

John: <unk> also continued to expect to spend $160 million to $180 million in capital expenditures.

Joan M. Hilson: Before we move on to Q&A, I'd like to thank our Signet team in our stores, in our support centers, our repair shops, and in our distribution centers. Thank you for your commitment to excellence in the execution of our strategy and your devotion to our purpose of inspiring love. Your efforts are a steady source of inspiration for all of us. Operator, let's now go to questions.

Speaker Change: Before we move on to Q&A I'd like to thank our signet team and our stores in our support centers a repair shop, and then our distribution centers.

Speaker Change: For your commitment to excellence in the execution of our strategy and your devotion to our purpose of inspiring.

Speaker Change: Your efforts are a steady source of inspiration for all of us.

Speaker Change: Operator, let's now go to questions.

Operator: Thank you. And, ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press a star followed by the number one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press the star followed by the number two. One moment, please, for your first question. And your first question comes from the line of Lorraine Hutchinson with Bank of America. Please go ahead.

Speaker Change: Thank you and ladies and gentlemen, we will now begin the question and answer session to ask a question you May press star followed by the number one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing any key did withdraw your question. Please press the star followed by the number Q1 moment. Please for your first.

Question.

Speaker Change: And your first question comes from the lineup Lorraine Hutchinson with Bank of America. Please go ahead.

Melanie Gonzalez: Hi, thanks. This is Melanie on behalf of Lorraine.

Melanie: Hi. Thanks. This is Melanie on for Lorraine I, just wanted to touch on the margins a bit specifically for <unk>. They did look a little different than what was expected. So can you just break that apart a little bit more and then what gives you the confidence and getting those better for the second half. Thanks.

Joan M. Hilson: Well, thanks, Melanie. Margins for Q2 are impacted by a few things. One, higher marketing expenses, which we've seen be impactful for us and improve ROAS and just return on ad spend. So that's number one. We see higher staffing costs, as well as some deleverage on our fixed costs within SG&A. We would expect that to abate somewhat over the back half of the year as we inflect to positive costs.

Joan M. Hilson: I just wanted to touch on the margins a bit, specifically for 2Q. They did look, you know, a little different than what was expected. So can you just break that apart a little bit more? And then what gives you the confidence in getting those better for the second half? Well, thanks.

Speaker Change: Well, thanks, Valerie that margins for Q2 are impacted by a few things one higher marketing expense and which we've seen.

Speaker Change: Be impactful for us an improved ROE as and just return on AD spend so that's number one we see higher staffing costs as well as we are seeing some deleverage on our fixed costs within SG&A, we would expect that to abate.

Speaker Change: What over the back half of the year as we inflect to positive comps.

Joan M. Hilson: And then just to follow up on that a bit, just can you talk about the promotionality that you're seeing in the industry? I know you said it's heightened, just what you're doing to respond to that and how you see that trending for the year. So we continued.

Thanks, and then just to follow up on that a bit I'm. Just can you talk about the promotion ality that you're seeing in the industry. I know you said, it's high and just what you're doing to respond to that and how you see that trending for the year. Thanks.

Joan M. Hilson: Sure. So, we've continued to see a highly promotional category. Independent jewelers were significantly over-invented for the last 18 months, but that has now been getting back to a more normalized level. So, we hope to see the competitive environment get back to a level of normalcy, potentially in Q2 and Q3, although we haven't accounted for that in our plans. And I think what we've been doing, I really feel great about. So, we use our scale of newness to really find great values when we are buying gemstones and metals and then offer those great values to our customers and in our fashion assortment.

Speaker Change: Sure. So we've continued to see a highly promotional category.

Speaker Change: Independent jewelers forced significantly over inventoried for the last 18 months.

Speaker Change: That has been now getting back to a more normalized level. So we would hope to see the competitive environment.

Speaker Change: Get back to a level of normalcy.

Speaker Change: Potentially in Q2 and Q3, although we haven't accounted for that in our plans.

And I think what we've been doing I really feel great about so we use our scale in newness to really find great values as we are buying buying gemstones in metals, and then offer those great values to our customers and our fashion assortment. That's been one of the key drivers of our <unk>.

Joan M. Hilson: That's been one of the key drivers of our fashion assortment, which was a great story in the first quarter, up nearly 500 basis points in the last three months compared to Q4 in February. A second strategy for us is our loyalty program. We're increasingly offering targeted value opportunities to the right customers at the right time. That allows us to reduce broad-scale discounting and instead be much more targeted. So we have, we have a number of strategies that we've put in place that we think help us to have the right level of promotionality in this kind of challenging environment. And, and, you know, hopefully we'll see competition also utilize more healthy strategies.

Speaker Change: <unk> assortment, which was a great story in the first quarter up nearly 500 basis points in the last three months compared to Q4 in February.

Speaker Change: Our second strategy for US is our loyalty program, we are increasingly offering targeted value opportunities to the right customers at the right time that allows us to reduce broad scale discounting and instead be much more targeted so we have we have a number of strategies that we've put in place.

Speaker Change: We think help us to have the right level of promotion Ality in this kind of a challenged environment.

Speaker Change: And hopefully, we'll we'll see competition also utilize more healthy strategies.

Speaker Change: Great. Thank you.

Operator: Your next question comes from the line about Polish Way with Citigroup. Please go ahead.

Speaker Change: Your next question comes from the line of Polish Wang with Citigroup. Please go ahead.

Paul Lawrence Lejuez: Hey, thanks, guys. I'm curious as you're seeing engagements recover. Can you talk about the composition of what customers are buying between natural versus lab created? And is the mix any different than what you expected? And then second, can you just talk about the pricing for both natural and lab created on both the engagement piece of the business, as well as the fashion piece? Thanks.

Speaker Change: Okay. Thanks, guys.

Polish Wang: Are you seeing engagements recover can you talk about the composition of what customers are buying between natural versus lab created.

Speaker Change: That's any different than what you expected and then second can you just talk about the pricing in both natural and lab created on both engagement piece of the business as well as the fashion piece.

Virginia C. Drosos: Hey, Paul, thanks for your question. So in engagements, we still are seeing far and away a choice of natural diamonds by customers for engagements. LabCreated has been a good choice for more price-conscious customers. You know, we've had a challenging consumer environment for a while now. And so, you know, I think that it has been a good innovation in that context for people who can't afford to get the size and clarity of stone they'd like in the natural world.

Paul: Hey, Paul Thanks for your question. So any engagement, we still are seeing far and away our choice of natural diamonds by customers for engagement lab created has been a good choice for our more price conscious customers.

Paul: We've had a challenged consumer environment for a while now and so.

Paul: I think that it has been a good innovation in that context for people, who can't afford to get the size and clarity of stone they'd like in natural and so we can you know we continue to offer that choice to customers. Both in our finished product in and our loose diamonds, we have.

Virginia C. Drosos: And so we can, you know, we continue to offer that choice to customers, both in our finished product and in our loose diamonds. We have continued to be able to leverage LabCreated as a trade-up opportunity in engagement, still with a higher AUR on LCD than we have on natural. But I think fashion is the real interesting story here. So one of the things I said in the prepared remarks is that we grew our LCD fashion assortment 14% in the first quarter.

Paul: Can you to be able to leverage lab created as a trade up opportunity in engagement still with a higher AUR on L. C. D than we have on natural but I think fashion is the real interesting story here. So one of the things I said in our prepared remarks.

Paul: Is that we.

Paul: Grew our LCD fashion assortment at 14% in the first quarter.

Virginia C. Drosos: And that's at an ATV more than twice the average ATV of fashion. So, it's really a trade-up opportunity in fashion. At the general price points that we're selling, it's very expensive to have natural diamonds in fashion products. But LCD gives us an opportunity to add bling, you know, to those fashion pieces and then help consumers trade up into, you know, a more expensive and, you know, and sometimes a more beautiful piece.

Paul: And that's it in a T V more than twice the.

Paul: The average HCV fashion, so it's really a trade up opportunity in fashion at the general price points that we're selling it's very expensive to have natural diamonds in fashion product, but LCD gives us an opportunity to add billing.

Paul: You know to those fashion pieces, and then help consumers trade up into.

Paul: You know are more expensive.

Paul: Sometimes a more beautiful piece, obviously, that's at a very healthy margin also for Sigma so little bit of a different story on both but our diamond strategy has worked very effectively both engagement and in fashion and we're seeing continued opportunity.

Virginia C. Drosos: Obviously, that's at a very healthy margin also for Signet. So, a little bit of a different story on both. But our diamond strategy has worked very effectively both in engagement and in fashion, and we're seeing continued opportunity.

Virginia C. Drosos: Yeah, and then just on the pricing, are you seeing year over year declines in natural or lab created? Yeah, so that's our expectation.

Speaker Change: Yes, and then just on the pricing.

Speaker Change: Are you seeing year over year declines.

Speaker Change: In natural or lab created.

Virginia C. Drosos: Yeah, so it's our expectation that the pricing on LabCreated continues to decline. There's significant availability, production has become much more efficient, costs have come down, and retail prices have come down at a slower rate, but they are still pressured. That's why the need for a good strategy on it matters, which is what we've put in place. And as I said, we've been able to continue to use LabCreated as a way to drive a higher AUR, even though the cost per carat has come down to some extent. In natural, we see that kind of getting to a normalized level. There has been pressure in the category in general due to heavy discounting primarily by independent jewelers.

Speaker Change: Yeah. So it's our expectation that the pricing on lab created continues to decline.

Speaker Change: There are significant availability the production has become much more efficient costs have come down retails have come down at a slower rate.

Speaker Change: But still are pressured that's that's why the need for a good strategy on it you know matters.

Speaker Change: What we've we've put in place and as I said, we've been able to continue to use lab created as a way to drive a higher AUR, even though the cost per carat.

Has come down to some extent in natural we see that kind of getting to a normalized level. There has been pressure in general in the category due to heavy discounting primarily by independent jewelers.

Speaker Change: Thank you and good luck.

Speaker Change: Thank you.

Operator: Your next question comes from the line of Ike Boruchow with Wells Fargo. Please go ahead.

Speaker Change: Your next question comes from the line of I can put a child with Wells Fargo. Please go ahead.

Irwin Bernard Boruchow: Hey, good morning, everyone. I have two questions for you. Maybe first for Jenna, just you did some color around May, and you got some interesting details. Jenna, could you just tell us specifically how Mother's Day was? How was the Mother's Day selling season overall for you guys? And just maybe, you know, according to date, where are you guys running relevant to that guide? And then Joan, could you really simplify for us, just on the share count and the preferred dividends, like what, what, what diluted share count we are using for the second quarter and preferreds, as well as, I don't know, if you can get Q3 and Q4, but you know, exiting the year, the diluted share count would also be helpful, just trying to make sure that we all get the model straight. Thank you. Yeah,

Speaker Change: Hey, good morning, everyone two questions from me, maybe first Virginia.

Give some color around may.

Speaker Change: You gave some interesting detail Jenny could you just tell us.

How was mother's day.

Speaker Change: Others in selling season overall for you guys and just really make me.

Speaker Change: Quarter to date, where are you guys running relative to that and then Joan.

Speaker Change: Could you give us to really simplify it for us just on the share count and the preferred dividends like what's what.

Speaker Change: Diluted share count are we using for the second quarter.

Speaker Change: Preferreds as well as well, but we didn't give Q3 and Q4, but exiting the year. The diluted share count would also be helpful. Just trying to make sure that we all get the Marvell story. Thank you yes.

Virginia C. Drosos: Hi Ike, and thanks a lot for your question. I think probably the key word for, you know, this call is momentum. I mean, that is, you know, the word that the Signet team is responding to from the C-suite to every store team member. If you recall, February was a pretty sluggish start to the quarter, not only for Signet but all of retail. We started to see business come back post-Valentine's Day with some late Valentine's Day shopping.

Speaker Change: Hi, I can and thanks, a lot for your question.

Speaker Change: I think probably the key word for this call is momentum I mean that is.

Speaker Change: Worried that the signet team.

Speaker Change: Is resonating with from the C suite to every store team member. If you recall in February was a pretty sluggish start to the quarter not only for cigna, but all of retail we started to see the business come back post Valentine's day with some late Valentine's day shopping we saw.

Virginia C. Drosos: We saw momentum through March and April, and May and Mother's Day actually were in the top half of our Q2 guide. So, significant momentum in the business that we are really leaning into, that is broad scale. So, significant improvement in engagement units, fashion accelerating significantly versus where we were in the fourth quarter and February over the last three months, with May being at the high end of that acceleration. So, we're seeing a lot of momentum in the business right now, and we're leaning into what's working. So, one of those things is newness.

Speaker Change: Momentum through March and April and May and mother's day actually were in the top half of our Q2 guide so significant momentum in the business that we're really leaning into that is broad scale. So significant improvement in engagement units.

Speaker Change: Fashion accelerating significantly versus where we were in the fourth quarter and February over the last three months.

Speaker Change: With may being at the high end of that acceleration. So we're seeing a lot of momentum in the business right now and we're leaning into whats working so one of those things is newness.

Virginia C. Drosos: Our investment in consumer insights and data analytics not only allowed us to predict this COVID lull in engagements that is finally abating and be more prepared for that than anyone in the industry, but it also allows us to predict customer trends. We're seeing a very value-conscious customer right now, and so we are targeting sharp price points with value-engineered products that offer incredible value. And with our scale, a value-conscious customer actually plays to our strength.

Speaker Change: Our investment in consumer insights and data analytics, not only allowed us to predict this COVID-19 lull in engagements that is finally abating.

Speaker Change: And be more prepared for that than anyone in the industry, but it also allows us to predict customer trends. We're seeing are very value conscious customer right now and so we are targeting sharp price points with value engineered product that offers an incredible value and with our scale a value conscious.

Speaker Change: Customer actually plays to our strength, so we're leaning into whats working to keep driving that momentum.

Virginia C. Drosos: So we're leaning into what's working to keep driving that momentum. The second quarter with our guide is shaping up to be our fifth consecutive quarter of same-store sales improvement. So we have a good trend going here, and we're leaning into what's working in Q2.

Speaker Change: The second quarter with our guide.

Speaker Change: Is shaping up to be our fifth consecutive quarter of same store sales improvement. So we have a good trend going here and we're leaning into what's working in Q2.

Joan M. Hilson: With respect to the diluted share count, Q1 was 48 million shares for the full year. We expect the view to be 46.3 million shares, and that's what's considered in the guidance that we've given for the full year.

Speaker Change: With respect to that diluted share count at Q1 was 48 million shares for the full year, we expect the <unk> to be $46 3 million shares that's what's considered in the guidance that we've given for the full year.

Irwin Bernard Boruchow: Any help on the second quarter as well? Just from a point of view.

Speaker Change: Can you help on the second quarter as well.

Joan M. Hilson: Just from a financial point of view, I would think about it as 46 million shares throughout the balance of the year, and you know, stay tuned, as I mentioned in my shared remarks that any earlier redemptions than the retirement date would impact that number.

Speaker Change: Just from a from a view I would think about it as 46 million shares throughout the balance of the year and stay tuned as I mentioned in my shared remarks.

Speaker Change: And that any earlier redemptions van.

Speaker Change: Then the retirement date.

Speaker Change: That number.

Speaker Change: Great very helpful.

Speaker Change: Yeah.

Operator: And your next question comes from the line of Mauricio Serna with UBS. Please go ahead.

Speaker Change: And your next question comes from the line of my Reshoot, sorry, now with UBS. Please go ahead.

Mauricio Serna Vega: Great, good morning, and thanks for taking my questions. First, I would just follow up on that commentary about Mother's Day. Could you talk about what sales have looked like post Mother's Day? Just it seems like, you know, it was a good event, but just trying to understand whether it was like if that momentum has carried. I know you mentioned that, but just wanted to be sure about it. And then on the Q2 sales guidance, what kind of engagement volumes are you considering in the Q2 sales guidance? Thank you.

Greg: Greg Good morning, and thanks for taking my questions first I would like to just follow up on the commentary about mother's day could you talk about what.

Speaker Change: Sales have looked like post mother's day.

Speaker Change: Seems like yes. It was a good event, but just trying to understand whether there was like if that momentum has carried I know you mentioned that but just wanted to make sure about it and then on the Q2 sales guidance, what kind of engagement volumes. Our iron are considered in the Q2 sales guidance. Thank you.

Virginia C. Drosos: Hi Mauricio. So, you know, as I said in answer to Ike's question, Mother's Day week and May overall, we're in the top half of our Q2 guide, so a strong month. We continue to see strong sales in our fashion business. Our newness sell-through was up 25% versus a year ago, and it's a significantly higher percent of our receipts also. So Joan talked in her remarks about the great job that our teams have done managing inventory. Despite all the newness that we've launched, our inventory was down 9% in the quarter. You know, and if you look at it pre-pandemic, I mean, it's down significantly.

Speaker Change: Hi, Mauricio So you know what.

Speaker Change: And in answer to Ike's question mother's day week and May overall were in the top half of our Q2 guide.

Speaker Change: So a strong months, we continue to see strong sales in our fashion business.

Speaker Change: Our newness sell through was up 25% versus year ago.

Speaker Change: And it's a significantly higher percent also of our receipts. So Joan talked in her remarks about the great job that our teams have done managing inventory. Despite all the newness that we've launched in our inventory was down 9% in the quarter.

Virginia C. Drosos: So we're in a very healthy place to be able to lean into particular items that are working to spread those quickly across our fleet. We use our ship from store capabilities so that every jewelry consultant across the country can access those new items from another new store if they sell out in their own store. So that is, I think, something we're really leaning into at this point in time.

Speaker Change:

Speaker Change: You look pre pandemic I mean, it's down significantly so we're in a very healthy place to be able to lean in two particular items that are working to spread those quickly across our fleet. We use our ship from store capabilities. So that every jewelry consultant.

Speaker Change: Across our across the country can access those new items from another new store, if they sold out in their own store.

Speaker Change: So that is I think something where we're really leaning into at this point in time in it and as I mentioned, we think it is a competitive advantage for us because of our scale and the way we construct new items in a value conscious environment like this to really have sharp price points and a great value for our.

Virginia C. Drosos: And as I mentioned, we think it's a competitive advantage for us because of our scale and the way we construct new items in a value-conscious environment like this to really have sharp price points and great value for our customers. The other super interesting thing about fashion is how our loyalty program is kicking in. So we only launched it a couple of years ago, but we are growing it quickly. We had 25% of new users come into the loyalty program just in Q1.

Speaker Change: <unk> the other Super interesting thing on fashion.

Speaker Change: Is how our loyalty program is kicking in so we only launched a couple of years ago, but we're growing it quickly we had 25% new users come into the loyalty program just in Q1.

Virginia C. Drosos: And we had a 50% increase in the number of loyalty members, the active loyalty members who made a purchase. So we're really now able to use this combination of our consumer data platform, our personalized marketing content, and messaging to laser target our customers and provide them opportunities or visibility to items that they might be interested in buying. And that is one of the things that's helping to drive our fashion purchases. So it's another thing that we're really leaning into to achieve that positive inflection in same-store sales that we talked about.

Speaker Change: And we had a 50% increase in the number of loyalty members. The active loyalty members, who made a purchase so we're really now able to use this combination of our consumer data platform, our personalized marketing content and mess.

Speaker Change: Ching to laser target, our customers and provide them opportunities or visibility to items that they might be interested to buy and that is one of the things that is helping to drive our fashion purchases. So it's another thing that we're really leaning into two to achieve that positive inflection to say.

Speaker Change: Store sales that we talked about.

Joan M. Hilson: And with respect to the bridal question, in Q2, we would expect, excluding the digital banners, as we have talked about, up mid-single digit to flat in terms of bridal unit selling. Once again, that's excluding digital, and it reflects the continued momentum and the recovery of engagements throughout the fiscal year. And as we said, we expect the back half of the fiscal year to reflect positively on the high end of our guidance.

Speaker Change: With respect to the bridal question in Q2, we would expect.

Speaker Change: Excluding the digital banners as we have talked about we've.

Speaker Change: We would expect.

Speaker Change: Up mid single digits to flat in terms of bridal units selling once again, that's excluding digital and it's what this reflects is the continued momentum and the recovery of engagements throughout.

Speaker Change: The fiscal year and as we said we expect the back half of the fiscal year to inflect positive in the high end of our guidance.

Joan M. Hilson: sorry, I just want to make sure this was up mid single digits to flat for total bridal units.

Speaker Change: Sorry, I just want to make sure this was up.

Speaker Change: Mid single digit to flat for total bridal units.

Joan M. Hilson: for engagement

Speaker Change: Or engagement units, Okay got it and then diluting digital digital and then just quick follow up on the on the merchandize margin could you talk about what kind of trends you saw.

Joan M. Hilson: Oh, okay. Got it. Including digital. Digital.

Joan M. Hilson: And then just a quick follow-up on the merchandise margin. Could you talk about what kind of trends you saw, like brick and mortar versus online? And one thing just to understand on the last commentary on the risk to the guide, you know, are you expecting higher promotions year over year? And why would that be if it seems like independent jewelers, their independent inventories should be getting in better shape? Shouldn't they?

Joan M. Hilson: Thank you.

Speaker Change: Brick and mortar versus online and one thing just wanted understand on the on the last commentary.

Speaker Change: On the risk to the guide are you expecting higher promotions year over year, and why would that be it seems like independent jewelers.

Speaker Change: Our independent inventories should be getting in better shape, we shouldnt be thank you.

Joan M. Hilson: Yeah, versus what Gina had said. Yes, the inventories are in better shape, but I think, in general, the consumer is cautious, and our guidance incorporates that for the full year. We are cognizant of the promotional environment overall in the industry and in retail, and so we are prepared for that within our guidance. And we are working through a lot of the great newness that the team has brought forward for our customers.

Speaker Change: Yeah versus what Jim had said, yes, the inventories are in better shape, but I think in general the consumer is is cautious and our guidance incorporates flat for the full year. We are cognizant of the promotional environment overall in the industry and we are and in retail.

Speaker Change: And so we are prepared for that within our guidance and we are working through a lot of the great newness that the team have brought forward for our customers, that's helping us to mitigate promotion.

Joan M. Hilson: That's helping us to mitigate promotion, potential promotion impact, as well as services as it continues to ramp up. Mauricio is a key lever for us in our merchandise margin expansion. We saw that in Q1, and we expect to see that for the remainder of the year.

Speaker Change: Potential promotion impact as well as services as it continues to ramp up our ACO is a key lever for us in our merchandize margin expansion, we saw that in Q1, and we expect to see that for the remainder of the year. So it's merchandize, new merchandise and strong margins.

Joan M. Hilson: So, it's new merchandise, adds strong margins, services, and the influence of LCD within the fashion assortment that Gina mentioned is also a contributor for us within the merchandise margin. Between stores and e-commerce, there is not a meaningful difference in merchandise margin. As you know, we have shipped from store, and we were able to really reduce our clearance inventories, which had tended to be more online in prior years. But we are in a very healthy place in terms of inventory hygiene and clearance. So we don't really see a significant difference between the two channels.

Speaker Change: Yes.

Speaker Change: Services and the influence of LCD within the fashion Assortments agenda mentioned is also a contributor for us within the merchandise margin between stores and e-commerce, not a meaningful difference in merchandise margin as you know we have ship from store.

Speaker Change: And we were able to really reduce our clearance inventories, which have tended to be more online in prior years, but we're in a very healthy place from them in terms of inventory hygiene and clearance. So we don't really see a significant difference between the two channels.

Virginia C. Drosos: The one other thing I would say on promotionality, Mauricio, is, you know, remember that it is not our strategy to be the promotion leader in the category. We follow, and we remain competitive. The way we win is by the tenured excellence of our store team, who provide great counsel and advice to our customers, our winning brand equity, our ability to innovate quickly, and the investments in competitive advantage that we've made in digital and data. So we don't lead in promotionality, but we do stay competitive to make sure that we can close sales and bring customers into our Signet family to drive lifetime value at the show.

Speaker Change: The one other thing I would say on promotion Ality Marie C O is.

Speaker Change: Remember that it is not our strategy to be the promotional leader in the category, we follow and we remain competitive the way we win it.

Speaker Change: Is on the tenured excellence of our store team, who provide great counsel and advice to our customers, our winning brand equities, our ability to innovate quickly and the investments in competitive advantage that we've made in digital and data.

Speaker Change: So we don't lead promotional 80, but we do stay competitive to make sure that we can close sales and bring customers into our signet family to drive lifetime value.

Operator: Thank you very much and best of luck.

Speaker Change: Understood. Thanks, so much and best of luck.

Speaker Change: Thank you.

James Jon Sanderson: Your next question comes from the line of James Sanderson with North Coast Research. Please go ahead.

Speaker Change: Your next question comes from the line of Jim Sanderson with Northcoast Research. Please go ahead.

James Jon Sanderson: Hey, good morning. Thanks for the question.

James Jon Sanderson: Hey, good morning. Thanks for the question I wanted to go back to the commentary on average transaction value as being down slightly in the first quarter. What is included in your guidance for the year, how should the ATV.

Joan M. Hilson: I wanted to go back to the commentary on average transaction values being down slightly in the first quarter. What is included in your guidance for the year? How should that ATV progress going forward given the momentum you're experiencing today?

Speaker Change: Going forward given the momentum you're experiencing today.

Joan M. Hilson: Yeah, we would expect to see a similar ATV or average transaction value for the balance of the year in terms of the comp performance of ATV. What Jen had talked about, Jim, is really critical in terms of driving LTD into our fashion product. We are seeing a nice performance in bridal continue to recover. So, between those two factors, we really expect to see an ATV that we're able to hold at a similar level as we saw.

Yes, we would expect to see a similar ATV or average transaction value for the balance of the year in terms of the.

Speaker Change: Comp performance of ATV, what Jim had talked about Jim is really critical in terms of driving LCD and to our fashion products we are seeing.

Speaker Change: Nice performance and bridal continue to recover so between the.

Speaker Change: Those two factors, we really expect to see in <unk>.

Speaker Change: T V that we are able to hold it.

Speaker Change: Similar levels as we saw in <unk>.

Speaker Change: Thanks.

Joan M. Hilson: Okay, okay, so maybe possibly a slight decline, but very, very modest. The right way to look at it.

Speaker Change: Okay.

Possibly a slight decline, but very very modest rate would look at it like.

Joan M. Hilson: Slight decline, yes. And does that include an assumption that you'll maintain those 80% and 40% attach rates on the services, warranties, or the engagement? Great question. Yeah, it's a great question.

Speaker Change: Slight decline yes.

Speaker Change: And does that include an assumption that you'll maintain those 80% and 40% attach rates.

Speaker Change: The services warranties engaged great question.

Speaker Change: Yeah, It's a great question.

Joan M. Hilson: We – yes, definitely in bridal, and we see opportunity with the engagement tailwind to continue to drive revenue growth. But in fashion, you know, with the 40% overall attachment rate, we see opportunity there as price points increase with the infusion of LCD in fashion. We would expect to see an attachment rate increase. Just to make a note, the services are not included in our ATD calc, but it is, you know, a considerable driver for us as we progress through the year. Okay, thank you for that. Just another follow-up question on Lab-created diamonds. Did you provide an estimate of what your sales mix for lab-grown diamonds in the engagement category is for bridal?

Speaker Change: We yes definitely in bridal and we see opportunity with the engagement tailwind to continue to drive revenue growth, but fashion with a 40% overall.

Speaker Change: Overall attachment rate, we see opportunity there as price points increase with the infusion of LCD in fashion, we would expect to see.

Speaker Change: An attachment rate increase just to make a note.

Speaker Change: <unk> services is not included in our ATV calc, but it is.

A considerable driver for us as we progress through the year.

Okay. Thank you for that just another follow up question on glam lab created Diamond did you provide an estimate of what your sales mix for lab grown diamonds in the engagement category is bridal.

Joan M. Hilson: No, we didn't. We continue to offer consumers choice both in finished engagement rings as well as loose diamonds as a choice. We see a lot of consumers who, you know, have a budget to be able to afford it, leaning into natural, which has the specialness and rarity and traditionally holds its value over time, but we didn't provide any kind of a mix.

Speaker Change: No we didn't.

Speaker Change: We continue to offer consumers choice both in finished.

Speaker Change: Engagement rings, as well as loose diamonds as a choice.

Speaker Change: We see a lot of consumers, who have a budget to be able to afford it leaning into natural which has the specialness rarity and traditionally holds its value over time, but we didn't provide any kind of a mix.

Virginia C. Drosos: Okay, last question for me. I think De Beers announced that they will be partnering with you in the United States in the back half of the year with a major training initiative, as I understand it. So I'm wondering what you expect from De Beers as far as their training for your sales team that you haven't been able to offer the U.S. consumer? Thank you. Yes. So, we're very excited.

Speaker Change: Okay last question for me I think the beer has announced that they will be partnering with you in the United States in the back half of the year with a major <unk>.

Speaker Change: Training initiative as I understood it.

Speaker Change: Wondering what do you expect from debeers as far as they are.

Speaker Change: Training incrementally to your sales team that you haven't been able to offer the U S consumer to date. Thank you.

Speaker Change: So we're very excited about partnering with debeers.

Virginia C. Drosos: Yes. We're very excited about partnering with De Beers. It's, you know, it's a great thing when the world's largest specialty retail jeweler of diamonds and the world's largest producer of diamonds get together. We already have a relationship with them, obviously, because we're one of the very few retail site holders who are vertically integrated and buy rough diamonds directly from the mine. So, this is really an extension of that partnership, and it's a return to what I would say was the historical approach of helping customers to understand the specialness, uniqueness, and allure of natural diamonds.

Speaker Change: It's a great thing when the world's largest specialty retail jeweler of Dow.

Speaker Change: <unk> and the world's largest producer of diamonds get together.

Speaker Change: We have already a relationship with them, obviously, because we're one of very few retail site holders, who are vertically integrated and by rough diamonds directly from the mine. So this is really an extension of that partnership and it's a return to what I would say was the historical APA.

Speaker Change: <unk> of helping customers to understand the specialness uniqueness and allure of natural diamonds.

Virginia C. Drosos: I mean, what you know, what forms over a billion years in the center of the Earth's core and the tubes of prehistoric volcanoes is a very rare and special thing with natural diamonds.

Speaker Change: You know what.

Speaker Change: In our forms over a billion years in the center of the Earth core in the tubes are prehistoric volcanoes is a very rare and special thing with natural diamonds, and so we thought it would be a great time to remind our store teams about that specialness to share with them some of the excitement that I myself.

Operator: And so, we thought it would be a great time to remind our store teams about that specialness, to share with them some of the excitement that I myself saw when I was in Botswana, seeing the, you know, wonderful improvements in the economy and the life of the people of that country, you know, to be able to share that with them. So, it's really an educational opportunity for our teams, just like we would train and, you know, coach them on any new item that we would launch.

Soph: Soph when I was in Botswana seeing the you know.

Soph: Wonderful improvements in that economy, and the life of people of that country.

Soph: You know to be able to share that with them. So it's really it's really an educational opportunity for our teams just like we would train and.

Soph: Coach them on any new item that we would launch where kind of treating natural diamond is almost like a new item again like a reminder of that Specialness and uniqueness. So it's a it's a great partnership it will exist not only on the training front, but also on marketing to consumers, we find that one of the key.

Operator: We're kind of treating natural diamonds almost like a new item again, like a reminder of that specialness and uniqueness. So, it's a great partnership. It'll exist not only on the training front but also in marketing to consumers. We find that one of the key questions that young consumers, especially those who are, you know, buying a diamond for the first time, are asking is, "What's the difference?" And so, having our store teams be able to clearly answer that question and also provide education directly to consumers is a goal of the partnership. All right, thank you. And your next question comes from the line of Dana Telsey from the Telsey Group. Please go ahead. Hi. Good morning, everyone. Given the more cautious...

Soph: Key questions that young consumers, especially who are buying a diamond for the first time are asking is what's the difference and so having our store teams to be able to clearly answer that question.

Soph: Also providing education directly to consumers is a goal of the partnership.

Speaker Change: Alright, thank you.

Operator: And your next question comes from the line of Dana Telsey from the Telsey Group. Please go ahead. Hi, good morning, everyone.

Speaker Change: And your next question comes from the line of Dana Telsey from Telsey Group. Please go ahead.

Speaker Change: Hi, good morning, everyone, given the more cautious or just certain in consumer and the promotional levels that are out there is the promotional levels different by banner in terms of what you're seeing and then on the newness that you're offering how has that increased by banner is it different and as the opening price.

Speaker Change: Points changing how are you adjusting them in this environment and that impact on margins. Thank you.

Dana Lauren Telsey: Hi Dana, good morning.

Hi, Dana good morning, So we we have pretty differentiated strategies on our banners across the board, so which customers they're targeting how we think about average price points in our assortments.

Virginia C. Drosos: So, we have pretty differentiated strategies on our banners across the board. So, which customers they're targeting, how we think about average price points in our assortments, even the real estate strategy of how much on the mall or off the mall. So, we don't say a lot about those differentiated strategies, obviously, for competitive reasons. And I think the promotional strategy would be one of those things. But what I can say is that within each banner, we've done some great consumer work to say, what are value conscious customers looking for in this banner?

Speaker Change: Even though.

Speaker Change: The real estate strategy of how much on mall or off mall.

Speaker Change: So we don't we don't say a lot about those differentiated strategies, obviously for competitive reasons and I think the promotional strategy would be one of those things, but what I can say is that within each banner. We've done some some great consumer work to say.

Speaker Change: What our value conscious customers for this banner looking for so a value conscious customer in share it might be quite different from a value conscious customer in band to provide piercing pagoda and the price point that they're looking for would also be different.

Virginia C. Drosos: So, a value-conscious customer in Jared might be quite different from a value-conscious customer in Banter by Piercing Pagoda. And the price point that they're looking for would also be different, the value that they're looking for. So, we have looked at that and designed our assortment to hit price points that we think are really right for those customers. So, take gold as an example. We have done, I think, some really innovative things with a technology we call Sculpted Gold, which creates a very big look at a lower price point.

Speaker Change: Value that theyre looking for so we.

Speaker Change: We have looked at that and designed our assortment to hit price points that we think are really right for those customers. So take gold as an example, we.

Speaker Change: We have done I think some really innovative things with a technology, we call sculpted gold, which creates a very big look at a lower price point and we are able to offer something like that at a higher rent.

Virginia C. Drosos: And we're able to offer something like that at a higher end with more gold in a Jared and at a lower end with a bit less gold in a Banter by Piercing Pagoda. But it still is an innovation that's allowing us to get to a sharp price point in both of those banners.

Speaker Change: With more gold in a Jared and at a lower end with a bit less cold and the banter, probably piercing pagoda, but it's still is an innovation, that's allowing us to get to a sharp price point in both of those banners.

Joan M. Hilson: In addition to your newness, the novelty aspect of it, we've infused newness across all of our banners, and it's a key merchandise strategy for us. And we'll be flowing newness in, and importantly, as we are flowing and increasing the penetration of newness, we are reducing older inventory and getting through that in a meaningful, strategic way for our customers as we progress through the year. So a balanced approach to increasing newness by taking out old inventory but really bringing forth new assortments for our customers across banners. And newness naturally can come with lower promotional activity.

Speaker Change: Okay.

Speaker Change: Thank you your newness the newness aspect of it.

Speaker Change: We infuse newness across all of our banners and it's a key merchandise strategy for us and will be flowing newness in and importantly, we ask we are flowing and increasing the penetration of newness we are reducing.

Speaker Change: <unk> older inventory and.

Speaker Change: Getting through that in a meaningful strategic way for our customers as we progress through the year. So a balanced approach to increasing newness by taking out old inventory, but really bringing forth new assortments for our customer across banners and newness naturally can come with lower promotional witty, it's new it's hot we're designing some.

Joan M. Hilson: And newness naturally can come with lower promotionality. It's new, it's hot, we're designing some of our lines with the intention that they'll sell out. And so you need to get it quickly or, you know, it won't be available, and that then precludes the need for a discount.

Speaker Change: All of our lines with the intention that they'll sell out.

Speaker Change: And so you need to get it quickly or you know it wont be available and that then precludes the need for discounting.

Speaker Change: Thank you.

Joan Hilson: Thank you.

Speaker Change: Yes.

Joan Hilson: And that concludes our question-and-answers session.

Virginia C. Drosos: And that concludes our question and answer session. I would like to turn it back to Gina Drosos for closing remarks.

Speaker Change: And that concludes our question and answer session I would like to turn it back to Jan Arturo sauce for closing remarks.

Gina Drosos: I would like to turn it back to Gianna Drosos for closing remarks. Before we in the call, I'd like to highlight our recently published Corporate Citizenship and Sustainability Report, which provides great insight into our purpose-led accomplishments and goals. Our industry-leading standards for responsible sourcing, which we believe is a key driver of attracting and retaining younger customers in the jewelry category. Another bright spot is our doubling of the rate of recycled materials at our core banners. These are resonating with customers. The full report is now available on our website, and I hope you'll take a look at it.

Virginia C. Drosos: Before we end the call, I'd like to highlight our recently published Corporate Citizenship and Sustainability Report, which provides great insight into our purpose-led accomplishments and goals. And our industry-leading standards for responsible sourcing, which we believe is a key driver of attracting and retaining younger customers in the jewelry category. Another bright spot is our doubling of the rate of recycled materials at our core banners. These are resonating with customers. The full report is now available on our website, and I hope you'll take a look at it. Thank you all for joining our call this morning.

Speaker Change: Before we end the call I'd like to highlight our recently published corporate citizenship and sustainability report, which provides great insight into our purpose, let accomplishments and goals are industry, leading standards for responsible sourcing, which we believe is a key driver of attracting and retaining young.

Speaker Change: Customers in the jewelry category.

Speaker Change: Another bright spot is our doubling of the rate of recycled materials at our core banners. These are resonating with customers. The fourth report is now available on our website and I hope you'll take a look at it. Thank.

Virginia C. Drosos: Thank you all for joining our call this morning.

Speaker Change: Thank you all for joining our call this morning.

Virginia C. Drosos: Goodbye.

Speaker Change: Goodbye.

Operator: Thank you.

Operator: Thank you. And, ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.

Speaker Change: Thank you and ladies and gentlemen. This concludes today's conference call. Thank you all for participating you may now disconnect.

Operator: And ladies and gentlemen, this concludes today's conference call.

Operator: Thank you all for participating in me now. Disconnect.

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