SIG - Earnings call transcript Q2 2023 | Signet Jewelers Limited

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Operator

Good morning, and welcome to the Signet Jewelers Fiscal 2023 Second Quarter Earnings Call. [Operator Instructions] Please note, this event is being recorded. I'd like to turn the conference over to Vinnie Sinisi, Senior Vice President, Investor Relations.

Vincent Sinisi

Good morning, and welcome to our second quarter earnings conference call.

On the call today are Signet's CEO, Gina Drosos; and Chief Financial and Strategy Officer, Joan Hilson.

make statements. we'll presentation, today's certain forward-looking During Any to uncertainties, a are not and are subject historical facts number results differ statements may that actual materially. of risks and to report on XX-K language you We current factors, XX-Q on Form the X-K. reports in annual disclosure on ,quarterly cautionary Form urge our and read Form other and reports risk new Except forward-looking statements update revise or as required publicly by events. law, light we information of undertake future no obligation to or in

measures. will we the financial certain During discuss non-GAAP call,

of financial GAAP the news non-GAAP well Gina. should website reconciliations discussion that, And as further to For at the measures of the with to our I'll most as measures release posted review the measures, on turn non-GAAP www.signetjewelers.com/investors. over we the comparable directly investors call

Virginia Drosos

to customers you today. of Vinny, fulfilling to Thank Their for by everything conditions. our our thanks by our you, want It's to I for the Signet their and with purpose and us passion relationships to thanking and is an team. matter begin to their side. central lifetime I honor joining building we work be every no excellence at inspired agility day, continue do. all

key and our us believe today. my from Signet's growth three things created that do to strategy Here remarks operating the the are we've takeaways advantages enable structural We in model consistently.

another share First, deliver yet an these third, of and expansion; market meaningful invest operating create value. margin; achieve annual was demonstration double-digit advantages. to shareholder QX second,

versus quarter base. in our operating X.X% record-setting last which versus Our 'XX, up year, sales team in down pre-pandemic the was the of delivered income. second Revenue $XXX second $X.X year and XX% non-GAAP billion fiscal was revenue quarter million and

in operating strong year operating 'XX. range rate and delivered XX%, is higher operating than margin original guidance which we income our Xx nearly Importantly, fiscal was Signet's at within non-GAAP

margin now and to flexibility despite our and operating top investments and return leverage deliver have maintain us shareholders to SG&A our in softer we line structural enabled So the double-digit capital a to model in environment, transformation strategic operating QX.

Our strategy working. is

biggest accessible and with diversified our We expanding are our accelerating of services in Banter, portfolio winning businesses leading in digital. luxury,

leaning both able areas business driving shareholder strategically into further value. customer opportunities with are to our and most the We growth be of flexible the

our jewelry primarily me and discretionary with consumers first also share lower items in buying Before lower impact impacted most by our fashion into What category data at that I we're categories. We and incomes results, discretionary context. seeing get lower jewelry let proprietary most points, price directly from are some or is shopping other price fashion macroeconomic are apparel in being discounting pressures. the negative tiers believe seeing deep

is in gifts particularly and like fastest what this decline by $XXX, What's with price is $X,XXX luxury. in below and anniversary impacted. points are Kay, Conversely, $X,XXX higher categories. sentimental items showing below sentimental are luxury items and bands customer tiers, jewelry call being showing our that more we proprietary steep for considered That seeing strength outperforming jewelry are interesting over rings, strength in Zales being is growth also negatively general, point their points engagement accessible purchases. price price the price is So other reflected followed relative research Jared

allowing consumer tearing into differentiation these insights, up accessible lean are around strategies banners Our into and luxury to trends. us

trends, as more almost increased and higher where banners, inventory, versus X% do. reduced XX% nearly $X,XXX headwinds context, at changes biggest how limit assortment X%, let's This biggest to and stores. Diamonds our with quickly range. tailwinds, traffic of revenue excluding price and share clearance. newness in in closer maximize will We to our growth across that efficient us bridal look businesses that We Winning why designed believe a With we're consumer which has take and in we're four core aggregate our profitable advantage our growth. price we margin and competitive long-term building to respond in So moats profile purchases to growth strategies for is our is of year doing approximately our company of our of This We banners and real marketing we in while this is personalized, flexible the driven drove media mix leadership bridal responded advantage, is a to now year, banners, part is and XX% the all in data-driven a range where-to-play the last big was that precisely quarter. We $X,XXX strategy drives XX%. Direct, grew approach. QX services is a plus bridal consumer the our our and now a especially story first these to spend to always-on versus awareness $XX,XXX share enabling by fulfillment. high last estimate lead grew in

is uniquely Our presence our able to readiness want however connected meet that engage. and it are is our digital a and highly with jewelry wherever combination, experiences. whenever, customers' and capabilities optimized in to Relevance our portfolio commerce banners and expanding plus ensures powerful which of needs our we of precisely footprint built the they we've combination differentiated category is brick-and-mortar unrivaled the stores

weddings year the wedding As year. the of XXXX this with million predicted, expected has become X.X

increase in-person great in for wedding-related events, which pre-wedding with opportunities we've are growing, gifting. an addition, and events In seen other

marketing making special campaigns creating throughout made online we party, that ring celebrations, jewelry In and the couple this wedding-related our guides making gifts Because $X.X represents our wedding. of to wedding the on a opportunity shopping are and bridal changes We've billion and all the targeted the the suggests themselves new including services XX% data U.S. entire the assortment, are focused many our now serve capture media of with content, so the events gifts mothers at opportunities. Signet and customers digital and value delights in engagement for of to fact, purchases, all shared most couples their

to than personalized at points. availability strategy accessible luxury in would appointment We've bookings, design increased to Direct. luxury our it to custom ahead from services into this million higher leaning and of acquisition We point increasing are be play also economically quarter, banners. expectations. price Direct strategic challenged assortments grew equation And strong environment, like We've particularly concierge-level Jared more across pieces believe delight higher-income $XXX which our for to offers of where-to-play added customers, our while expand To we in. the we've items Diamonds two Jared we ability we market customers the this quarter more in revenue value share scratch. proving anticipated we the the expanded both Diamonds be, second Foundry, customers. accessible economic is Our of in delivering is acquisition

for how our great basis. example more also the pieces. navigating value all that that their designed our innovative bigger are and new jewelry customers. our plentiful inflation also We've more impact spend, To value-engineer diamonds our cost we shoppers. A for relationships using make lab-created less items affordable leveraging We the scale, value to are a are in have vertical is a on leveraging vendor capabilities pieces diamonds lower pressure of fashion look for of integration and strategic economic and we are our maximize

attachment sales financing services This is our repairs. and new promotional growth offerings, higher revenue by and increases our at warranty rates. and nearly was Charito at financing. versus expanding strategy reflects and Kay from where-to-play NPS is down Zales third up performance team Jared, by based more driven first largely price and research, including driven quarter, digital Further, Accelerating strong launched bundles, attachment the training consumer ago customer services service XX% product to was jewelry second new Finally, visibility. of included our tracking agreements QX a increasing growth and and X%. we've scores, in by driven we our insurance appraisal appealing in theft delivering half on Repair new a protect time, strengthened services a our turnaround up growth Extended mix newer, loss. year several and these X% revenue payment with Kay faster

wedding Bridal showers at We by their day. events, also to a for brides We The to red service bridal from batch service ranging wedding this rental will launched premium believe parties all new their as Rocksbox, power purchases. Signet's increased attracting newly and the of acquired as continue QX, diverse us base illustrating repeat XX% banner. help a in more for well younger customers scale and subscriber Rocksbox expand

be this by members rates loyalty continues of with and and points repeat holiday. of higher growth $XXX example, at future and continue bullish expansion about which We loyalty in Jared our the than Rewards Jared, out pace Volt stores Jared, currently to up in X,XXX be versus a It's meaningful Kay's. for basis to nearly be members. on transaction to Kay to more This is XXX program, among values Zales very non-loyalty source and rolled e-commerce

toward We steadily that billion continue business as see services and progress goal. $X are to a making

Importantly, and service accretive. consistent margins remain

more is is competitors match digital. quarter our Our a much to it difficult and multiplier fourth Digital digital and leader creates given that our for in browsing, play because scale and increasingly e-commerce. ways are data for and means in easier for than in looking the to conversion. fulfilling targeted even and Being of multiplier. makes is strategy investments the shopping powerful most experience the drive It buying most our leverages and who it an made. to It's leading is customers more the advantage multichannel we've capability integrated jewelry leading

every in of our We business capability speed. part industry-leading now technology innovate our to are digital with leveraging and

companion. average booked added more driving important of this XX% In key appointments start XX% conversion walk-in than we've rates quarter, virtual because were our of ago. increase is customer. in increases appointments, example, also for six-fold. a is is Xx This and saw customers for XX% a higher, customer conversion ways checkout try-on to several is which higher a between merchandise rates the transaction We value three and expanded traffic inventory orders, For fulfillment In pick for appointment stores and used for a it second book progress we've customers levels build which the new year engagement. further our more products, or versus online mini QX, easy And toward at-glance delivery, of relationships. drive the same-day quarter year greater rate which last all from store, and store that one to after or This and customers expert These launching of so to up more customer offerings than easy convenience online, XX% applied total of discounts, buy our their jewelry of in both improved shopping views to flexible loyalty mobile see also versus cost new can consultants makes first including options, incentives. ship efficiency. earning our bag more of and

increasingly was ecosystem valuable developed This e-tag e-tags physical at diamonds the at for now proprietary E-tags many reasons. We technology our We innovative level. linking loose experiences. digital Signet. have and tracking XX,XXX and are are store

with a can easily storytelling enabled each about e-TAGS information visible QR diamond. First, code, our because customers access

maximize inventory Second, seconds. a us motion can sales e-TAGS and the expand sensor to pricing an or technology data, by and a other sale real-time a dynamically and margin to Nearly are we We at leveraging on loose every Jared to now offer diamond within banners. e-TAG optimize sales levels will adjust and and give soon the close continuing have incentives across ability products basis. nearly

adding past With essentially of capabilities letting a we're our jewelry we're the company that no innovation beginning digital connected in commerce our digital technology We from of of up. doing. Brilliance way and our is invested Things to not in transformation, e-TAG other system, proprietary a the Internet

expect the marketplace Blue retailer is cohort of digital affluent our younger, highest acquisition Nile of diverse. diamond the Nile and trained customers in with customer has We more revenue expands bringing cost learn while the value Blue a online the both synergies, new year. significantly model later growing showroom from to synergy complete of Nile strengthening our final featured occupancy fleet offerings. and and to this inventory fixed point our make of Blue through factor in optimization than I by want jewelry through a Nile showrooms Our good any pure-play Blue which jewelry purchase in The We've with recent has James It consultant are our to into banner shopping pioneer as financial incredible technology low quarter-to-quarter acquisition Blue shopping, portfolio, educated then recognition online. their we top highly their their end a accessible and position. zero-based is accretive next through and a unique brand performance of is the example. reset to Allen, XX luxury our unique and strength now able can is be and are from no costs reduced propositions, leaned operating significant such store our We QX each of modeled. opportunities Nile see budgeting. that

we with why takes did double-digit scale. time. advantage operating what conditions, our annual invest that is our and which of pull in We've are levers through the most QX. create of committing in we to and over to That's model journeys demonstrated margin customers to the flexibility see market acquisitions. assortment, operating strategic through changing to in precisely value have can strength whether we're using or confident breadth that Our our expansion of several respond we business that's financial ways enable by delighted we competitive shopping in and our of advantage that virtual the We're

allocation on We stated long-term our are consistent priorities. capital value focused and creation

our in First, share. investing acquisitions market expand and strategically core business to

a company. and goal returning levels being of shareholders leverage; dividends dividend appropriate third, a repurchases cash to growth Second, of with through maintaining and

QX our a Signet's are began. message. I results to where close core reason I'll believe strong So

the deliver consistent, stronger. is culture strong hand and and note, growth On have value. clarity, Joan. that meaningful financial strategic advantages, sustainable over shareholder to structural to winning and I'll reliable and We flexibility Signet growing it

Joan Hilson

Thanks, the of sustainability Gina, with our everyone. operating to three you leave morning, want and all messages that I today illustrate model. good

have deliver are innovative market growing operating we to after while annual we margin, the this we consistently reliably. do We share and confident year year. First, structure and culture disciplined can operating double-digit believe

of make investments. shareholder efficiencies, our growth. drive investments to capital health positioned continued the third, sheet with And Second, well we and prioritize are that we alongside balance continue working long-term we returns believe strategic to

delivered is billion X.X% of we example to how QX QX bridal luxury. a almost delivered comp the decline record-setting We down sales and sales the our managing answer second perfect accessible the ago. turning Now of in X/X and top during effectively represented line. are quarter total performance. of performance performance bottom we in offsetting a a year to $X.X quarter, The strong compared

same are our out points, while malls Banter price and we full of growth underperforming in at digital. advantage time, taking explained, Gina bridal of and of the As higher into strength leaning the accelerating moving

compared store soften all value our in across Sales rationalization to per of XX.X% quarter foot square was America As price July, was for previously trends traffic. XX% by result strategy, FY XX%. our fleet connected we that up average comp the our reduced on with weaker second quarter, direct basis. saw said, transaction a with points over a commerce our base 'XX, of in coupled up reported, That North the along

addition, growth. nearly warranty and repair drivers In were in quarter the services and delivered X%

activities. Importantly, we began to see improvement in August as a result of non-comp

Now sales, a of points let's was quarter of lower margin. Non-GAAP the This to on to X.X% gross margin year. which margin. turn comp occupancy carries the basis negative Diamond's of deleverage XXX a compared XX% and impact reflects down second gross relative last Direct,

similar to organic our Importantly, merchandise banners was last margin year.

million was last spite XX% impacted or and quarter. the abatements SG&A of In point in tax technology over of year the prior investments softer year. strategic a XX $XXX this improvement line, gross SG&A basis margin. leveraged sales, we Additionally, absence COVID-related also from top change of

margin and million million note compares sales, million Please operating nearly $X FY XX.X% was year from brands. than our of all spend SG&A managed conditions, sales investments driven which lower team shareholders. financial and income growth response Xx last primarily agreements. or is shifting higher our labor last to our gating of investments, maintaining year. charges Non-GAAP Notably, of by to is while management, in of acquisition-related enhanced approach $XXX performance our by $X.X operating flexible our This driven payroll 'XX. income, from COVID-related Our model to benefits XX% costs million included excludes and priority or returns $XXX services QX that to disciplined market

Looking ago demonstrates into also model. back seven exceeds factored when credit performance operating further, we strength transformed years our margin had mix. our our This this the of

sheet. at look Let's balance now the our strength of

have We invest in efficiencies. because line even a of working top innovate to our the flexibility capital softer environment and

the At cash end million quarter, equivalents. We the continue stated priorities. our consistent to deploy of had $XXX we with and capital in

to million on given common share $XXX enabled dividend of $XX become million is at FY million FY basis also We've our $XXX on to in and efficiencies Our a currently we use cash capital X.Xx leverage augmenting Xx the current confidence 'XX. previously maintain from and to model, luxury portfolio. will which through XX% and to remaining and working X.XXx $XXX repurchases company. our below we're stated nearly well goal in achieve strategic a a cash returned accessible multiple, ratio reflecting nearly operating XX-month our target shareholders have and acquisitions, following Further, We below our EBITDA, paid stands stock's strength our us multiyear since of our below the continue 'XX. to dividends believe within today, approximately goal we authorization. million EBITDA. in reinstatement leverage since our growth And invested tier trailing undervalued, our down with ratio We focus differentiated revising

macroeconomic QX last eight down of quickly reduce is for Penetration Now at change I'd in to inventory Inventory of down last and one a working to improved and last the the we've shifts. compared XX% FY year turn Direct. inventory down faster critical efficiencies. X.Xx our indicating 'XX quarter clearance is and we've imperative down levels point to X% it to turning nearly to XX% differentiator 'XX, at 'XX, of the inventory, of which it's it or at quarter also year to to to including core the in response year. to year, inventory $XXX our capital is management a inventory, is to overall, is end even done of heart Signet. importantly, and compared quarter strategic fiscal for remains also end inventory of Overall, reflecting ability like FY million turn the compared and points our health second made Since pre-pandemic Diamond

and healthy prepared to use to and for trends. demands consumer our vendors continue levers level inventory a meet maintain well holiday the appropriate are to season. the of We with secure partnered inventory right to We

our the much margin. component of a improve maintaining double-digit manage and that and commitment. still operating annual reliable market grow share While has inventory our become This discipline, margin to cash rigorous operating drives management cost of holistically we inventory

your me move guidance to then Now we're happy take let to and questions.

per the now We share quarter. income $XX.XX, We revenue are year of fiscal through impact to fiscal $XX.XX of range and full in year reaffirming including earnings the annual second XXXX 'XX our for guidance. non-GAAP expect full operating the repurchases share of

Our full a year Nile's worsening factors, macroeconomic and fiscal performance. include not 'XX not material include guidance does Blue it of does

quarter revenue $XX the the For $XX $X.XX cost million an fourth to of Please we $X.XX model in our range quarter. strategic associated that million. operating to shift with the billion the revenue in non-GAAP note third third range occurring the in expect of with has always-on quarter, income largely billion to moved marketing to

acknowledge the I Before we Q&A, day capability I team open see and in out. for our and call in commitment want that day the to

operate and questions. accountability high to and is they Our happy customers delivering to is And are it performance better that every our on even exceptional high genuinely potential, take I our and be note, shareholders, be about team we'll to fail. your that with most love members with performance and team to that commitment day such striving single What this both inspiring.

Operator

Boruchow take Ike We from ahead. first [Operator our Instructions] go Fargo. Wells from question Please

Ike Boruchow

quick question. Two the ones. everyone. Thanks Hi for

like basis. performance year it organically decent slowdown look sounds gotten on one it a you're little When revenues guide, does in embedding QX better. multiyear a at quarter-to-date, both your like a the look has QX and the August we versus on Just

in retailers of in So is and kind a bit what on us you've just the you seen then Blue rebound? Nile of what the lot seen August, And of through a quick have little walk on a commented transaction. built a just follow-up conservatism

fourth if holiday, negative a in holiday, ahead deal quarter. not that would them. I Assuming you're you. of the a Thank guidance does close currently the does any guiding from close or impacts that EBIT this before positive does to to include be But your your understand

Virginia Drosos

with thanks first the Ike, for I'll Hi, one. your start questions.

the when the the reflecting of guided the transaction we current make that on weeks So wanted balance where a reality of at to we the couple sure we really We year we were announced now. customer Nile. see time with of Blue the

And material the that so was trends see a We not guide did not we in of some clearly the including a were of improvement August. Blue our low very end seeing, worsening, representing Nile. continuation

I a combination think that's really of customer. the

see to up quarter. for some higher gifts saw which sentimental X% in said points. strength, especially the We remarks, have and I price we as in bridal, considered also and at purchases, continued my

think that want I the And into good there's to reflect So end of in some we then, little didn't that bit come Joan, as of we about low any a but news we've Bueno. the you talk August, guide gave.

already closed transaction. We have that

Joan Hilson

we closed the transaction recently. Yes,

over pulling team Nile on been really our Our has ground and Blue together together working hand-in-hand the last holiday plans. week the team or put to so with the

Ike. be of Allen that it -- done. so would banners fourth And team. work the the based opportunities that with But synergy and our the integrate time at about for two about very We're excited ability quarter, under we've the the talk to the premature the on James this to said, view

synergies the back leveraging office. really of and So

give to view our fourth of lots premature a on little really just quarter. and opportunity guidance in So the

Ike Boruchow

you. Thank Okay.

Operator

Please comes Lorraine. The of Lorraine from go America. Hutchinson Bank question ahead, next from

Lorraine Hutchinson

And morning. the you. were that here of But soften that offset you model. use wanted some deleverage operating double-digit to guess Thank just levers allow through testing you I Good sales your hear the view to August maybe just stress stabilization. you the to that margin? how I if maintain about to Encouraging talk of see goal can further, to

Virginia Drosos

question. the for Lauren, Thanks,

is operating an and annual to commitment our margin. double-digit goal So maintain

think delivered was X.X% operating a -- it comp, what a second off we what strong you so closed the very we if and negative in margin. about And quarter, double-digit

below do last year. clearance we that year. how did were below one, last inventories, And sales So strong was healthy was, inventory clearance management,

mix in our last organic was I to merchandise mentioned, similar again, margins, year. So healthy as banners

on on have leverage inventory to operating. disciplines are that the and daily part as strong of build working able teams put really our our really and So

and The have right? stores have model, quarter, needed. the right and with the locations And are. the very we into back flexible third that teams say protect the very work closely mentioned. the the recall in quarter. inventory really and What based but line our We're are the to - it's move - as always view the that would continue gated year, the I applied cost in priority to that traffic that don't shift and to to we We said and should disciplines, we're to the looking because eye on critical and right our also are quarter vendors our half, labor each we quarter. to analytics our then of against investments then to a flexibility where is that it I rain investments. that labor, trending. other be then of to the And all term are it's third that revenue relates in get that the long NPI in really drive, marketing, right fourth use are on our time quarter investments we prior to see top to that ability our in with gate the as the and data we've is amplify from I putting and manage trends, And to we at we just support labor really support coverage our anniversarying the long-term management, same would say levers ensure evaluate for is spend we fourth our have to revenue forward we we the I that growth wanted these until term, teams anniversary short investment mentioned, customers as on perspective, the the we the P&L receipts ensure in the a the we

we our think all And then very really, back investments. watching our those and are factors. for implied of we of third guide closely considered guidance we half, as the for So the the quarter have

Lorraine Hutchinson

Thank you.

Operator

Telsey ahead. next The Please Dana Group. Telsey Advisory from comes go question from

Dana Telsey

Hi, good morning, everyone.

As of levers what new how margin now about of of the Direct, like the the annual basis, gross margin think margin? it, shaping the quarterly basis buckets you you with new do businesses gross opportunity a whether and Diamonds is about and think on entering an the the for gross

Virginia Drosos

Thanks, Dana.

mentioned, as our banners gross margin, quarter So year. to in the last similar second were organic I

As that forward into healthy. half bridal And the is therefore, our Diamond's clearance direct we move carries is are as back also we deep. not margin marks the year, the which the our mix, mix, our And inventories on lower of of relatively selling but same a means because that have clearance stronger. are what yield

to her customer. the drive bringing to work health also we is with And have continue in to us continue lever that inventory. pricing then beautiful to we expansion to our Then as a clearance ensure time. base we the the over add and optimize that's lever given relevant to relatively as the that's costs margin mentioned on and margin for us So engineer to our we're to another continue value Gina clearance trend to right pull vertical continue promotion, that environment, for that higher in the able of bring vendor but engineering value enables this carry value in would across remarks, I product lever integration a use also a that to strategic and drive us gross for

Dana Telsey

Thank you.

Operator

and from Chen comes question Oliver Company. Oliver. ahead, from next go Please The Cowen

Oliver Chen

Gina, you. Hi Joan, thank and

portfolio progress parts inventory we bifurcation inventory most margins the you and the out what Which that? turns, there. to reality Joan, And and traffic of and increase in of Regarding lower that you products, timing what's much. point have also how a does and end made the there product the merchandise lot do promotions to And price you consumer? And of see the on the for ahead? Thank relate think to lower opportunity as you're necessary about calling turns. innovation very

Virginia Drosos

for Hi, your Oliver, questions. thanks

insight by consumer capability at over years, So journeys. tiers, we developed several -- as the we've by also category our look really price the last

been So as in from my has tier standpoint, mentioned price remarks, I a luxury strong. very

quarter. So continues that part to been above in we something up the behind our That's grow. that's early. two very But luxury in grew Signet we point points market of of we've plays. accessible offerings. where got have what And price think a all banners higher share generally to the category of is we doing tiering That's

So by orders Memorial Day. placed we've holiday our

inventory everything inventory up includes year. have points of and higher really we price in to that So talked on have about tiered this fact we Joan gotten ahead the that our

terms of think, factors, like you that. two really, challenged is In price lower they're about, of macroeconomic, talking were customers, all one inflation, by I

And in we've $XXX. the points self-purchase seen primarily price particularly that under would a there so journey, be falloff

The impacting that discretionary we're categories. is that of inventories and apparel other heavy high because very factor discounting in seeing the other

we've is to expect will customers, So that we very go the impacting customer see, be for think We would that toward we appealing. right product on that worked as holiday product now. that value those engineered the

way those for lab-created look big using for customers. diamonds, for example, as been to a get we've a So less

way to to diamonds believe that we We've a had the increases of providing to value with in worked have our they superior rest how items make in that on on worked a end, we've relative market. use at are Signet a we've our We vendors been and price we especially done at price the value. We've sure taken low creates hand. very of excellent conscious way at the that a

those lower So inventory, last a able been really to to basis, customer. year's we've create and call that cost it can appeal product that to use had

diamond cut Another gold. area of is innovation

actually our though So look we've in gold piece are laser Italy present. of technique factories no diamonds a creates with the worked up diamonds that of of cutting come there to in a many with even

rich really last in a split a the gives pay. of it customers. still value affordable have point. the offers a are, that So on price XX% we e-commerce. We saw for look into split use And for increase our Those financing leaned is very course, then we've thing pay

an opportunity credit for our label and seeing that we've available value have an definitely offerings as opportunity. increased we're private we our as So lean those customers. X% promotional challenge into Leasing then for down customers card

in of able we're innovation giving we've I So We've the insights, vendors product, our our bring things think, of in really, inventory that based inventory One balance its been more of on on to early years position from couple work several substantially able to is with customer. the get orders access kind and because our been I us to consignment based early that portfolio our consumer of a value health there's of note the our of Oliver, the has would of is and great roll ago. memo been test on part but market. your the that that's and lower be here. lowered competitive work the growing, helping the the by on end also address And to offer more inventory to to turns, acceptance to market at flexibly our very us it and

enhances that to improved as as newness So churn. our ability well have strong

started -- last flexible something I that's hold we'll fulfillment this that's and -- then is and drive the drive that they're continue other a we it's way merchandise And smaller year. really that fiscal something as year capabilities. through really we taking in So think to really teams the with

fulfillment our aperture are up opened the really stores and DCs, has inventory really us team for job fulfillment as Our continue our has to drive team a to planning our all turn really amazing teams chain which our well merchandise our with as fulfillment to capabilities flexible purchasing into of product into locations, the able really from and our supply and there. integrate done our team, of selling our

So -- that's core with this our of products. vendors enhance think inventories. turning working and the just curve underway, would to then be towards inventory maturity time but inventory with more the idea I just in still moving And third up

will we operation. So to be will have room it take but we go time, it that still believe will across our and more precision take it --

Oliver Chen

Best regards. you. Thank

Operator

[Operator Instructions] Jim go from our ahead, Jim. Coast from question Please next North Sanderson We take Research.

James Sanderson

Thanks for the questions.

between and could the overhead -- you back expense gross margin if income to what that a considerably based you're through you at blocks quarter. What looking of cost takes get the the the you guidance in that for between on quarter pickup the acceleration or centers quarter? what nice wondering to the of the Just walk are half us a current puts in dollar operating year, lower the and year the how fourth those end and third are building gets

Virginia Drosos

Thanks for the question.

quarter guidance So the will third quarter. anniversary when our and we the the about third investments includes back splits, fourth half, for we fourth that quarter the incremental think in

as say the that So operating as deterioration it's quarter. until that that the largely. seeds fourth third investments -- I but is that in costs the income that's always-on quarter revenue at we marketing anniversary in incremental, in remarks, the strategy, third future quarter, you to the mentioned see we're this generated looking quarter in I'd our not largely marketing but the due my will also are these this

split the about the things in that last charge in reduction quarter year, that inventory. we overhead remember then year to charge the capitalized the had last of think to I Jim. took on an you're So inventory-related was fourth a seeing, that's positioned inventory. related We in quarters our And between based

a for that year. is positive that So us this we anniversary as

James Sanderson

you. Thank

Vincent Sinisi

take question. Okay. We'll the next

Operator

you. Thank

from question Lejuez next Citi. Please ahead, from comes the go Paul. Paul So

Brandon Cheatham

Hi of inflection that I higher everyone. Thanks trended you Paul. your price taking seemingly did the the this you question. on when is traffic that price point for of expectations ticket a are could what about This of is start year? in for for point little rest results? kind kind the seeing And wondering driving talk penetration if our And Brandon this was and how for bit quarter? Cheatham

Virginia Drosos

spring. traffic, of the down terms in go traffic saw begin So to actually we in

been e-commerce store. line a stronger return call to Mother's March, significant drop more to Day, traffic So of this traffic relative has with year April that's customers' desire kind it, brick-and-mortar to time after

that. is customers customers Of seen in but more their very we of in us And purchase we of now just e-commerce our our course, traffic it's Digital price for price and preparing a July most some But of points as challenged. pronounced the that in as lower higher said, challenged of phenomenon. we surprise bit Mother's sort have was have have terms and sort of big experience stabilization browsing the in brick-and-mortar. June we've much following a actually us, price store points happening of growing We July, multichannel August Day. with more bifurcation not kind are for of about case, became higher about X/X then points, a sales. that more from was and I would journey, saw having say seen really that that

Brandon Cheatham

price And that value kind an higher is inflection your trend range? that you in in expecting of lower assumed points? kind of are continues Or your guidance the

Joan Hilson

a performance. it to in QX on continuation the guide from place with about high largely noncomp think we're improve to our comp, positioned carries into of a is improvement, So way activities QX trend assumes and the QX, is modest putting that

underlying low August. Our saw comps the half. and we QX guide similar back QX trends in in here remains macro and environment is the that that the to And the July positions assumption constrained

Brandon Cheatham

helpful. then day in past kind Got was related That's And wondering, wedding of it. talked the of gaining I more about share jewelry. you've

capturing I good you wedding a engagement much as capture you did then wanted. think historically, the of job as you the didn't of and day.

your kind related and Thank could talk wondering you kind was jewelry about are to think how is can you progression? penetration you grow the that of wedding I where of you. in day if that that, Where of do kind So going? on

Joan Hilson

our capture we're consumer but our really us. big I that reasonably that data in progression, data first-party all in a would investments is say to of made early platform, we've the help

to more purchases we opportunity given big that engagement would I wedding about. a for activities different is to around proprietary band the of wedding or work not I wedding but The really around research to talked quoted all day then get research that and So fact and XX% gifts the Signet's say, couples is think, than able jewelry, us. know all I stage purchases the with toward at we stay wedding the ever are, them just

programs We go to new are after that. launching

that guides out the big She the a is give the of engagement and to-do wedding. coming toward help working So broad. list

help So better. other about And I'm the we the can excited more some on innovations. the that, of

drive wedding or during our nice gift for all try to year. course, Rocksbox the way remarks the jewelry great brides events, to have That's targeted a gift So as we're our using I it's bridal to of of my of event party choice year that a more looking and doing and where they on talked opportunity anniversary of engagement once the data we're birthday at whether able launched beautiful she's marketing day. their a efforts might a then [indiscernible] for the certainly or for about that bachelor a those And first jewelry, what photos or than to in been the or be to first announcement of otherwise rental great all having program.

we're that and a place really more the that CDP our throughout we to it's developed we've and can of capture information more then in the the customers that that work the process be our combination doing helpful and So assortment really consumer putting them. with we're help insights to more think

up to assortment. life our business data and coming matched So with services

Operator

comes Our from ahead. go question from UBS. Serna Mauricio final Please

Mauricio Serna

you quickly, Good just acquisition. thanks mentioned wanted morning. taking you Blue very And my ask to I Nile questions. for that the closed

be little bit you just if QX? So maybe that around reflected Or specifically if business. like elaborate begin you in in something does maybe versus could some a see just you is QX? this wondering already -- it So will the And guidance that I'm then how that? be about acquisition provide James that more could Allen

big XX% there's customer could between XXXX. guidance QX. think you outlook, in your for And QX sales maybe wondering I be Just that the take anything about if can year, if overlap formats? or like growth cannibalization implies to talk any it I you that both growth think in if versus a some assumes roughly then there leading But XX% sales

the are thinking what for wondering guidance just So sales? there in you. Thank you

Joan Hilson

one, I'll come I'll back Mauricio. the take first on Gina. the then Thanks, and guidance,

closing reflected of and be So will in that in our third Blue it Nile closed the from forward. the point acquisition performance quarter, we

mentioned, week, to working we there ground our of have teams the on been balance really were diligently. plans I Mauricio, closely They've the about As been and very collectively working for a we -- for the develop forecast and the have the been year.

for But it not guidance balance year. that. on as I the of this mentioned, in tuned stay our is So

Virginia Drosos

Nile, And Blue of did also market Blue versus a we more that that it's the acquisition. have rest some before cohort, business. opportunity. consumer younger, of affluent Allen growth models considerable incrementality different portfolio. Nile our a found as more we share distinctive We of terms amount go-to-market our in has than then of research that great see They And a diverse, the James

they pieces, the very XX with to a have we place low on they very So they but try-on then high-touch, do showrooms, really be marketplace able get order a feel similar Allen. what inventory a James high-service customers want, that's for styles what but for a environment see to in model, online

Nile have organization Blue our and out caliber we've invest us come that of life very lot that these we think which can then Nile talent the closed. we point, of this to transition to just a did the been we Joan's acquisition, will as they give to fuel And one. make are the really there more after synergies, really portfolio. we grow the with to the in of had banners And back-office meeting with So team day so distinctive Blue team within a -- our both this in pleased successful to excitement

a off So start good we're front. on say I would to that

Joan Hilson

modest Then holiday team QX, season. has carries QX play as the continuation QX, in the put QX will the on for a to the guide put into And that it I tested and assumes and for in mentioned, improvement related the -- the trend in activities high of that a comp address non-comp basis. holiday QX to it play carries

low guide and gave again that August, note more in positions July guide. I that confidence and the similar high in QX believe some to trend the we that's put which end, us On see improvement in the out and saw the QX we did conservative and just the August,

Virginia Drosos

what point is going or us like to that's Blue for look not early Nile But just It's at be too QX know in really our QX. time. guide this in clear, to to for really just

Mauricio Serna

share thoughts That's very that available? $XXX repurchases given helpful. still outlook And or potential over any the on have million share repurchases you

Joan Hilson

authorization we believe our remain it of said and is undervalued, is have that priorities, that belief state that our our And part the we $XXX capital what of remains given and we priorities. multiyear we is -- million. our will a we Well, part stock program of

Operator

in the further no queue. have We left questions

it for So I'll management hand any to remarks. closing back

Virginia Drosos

thank strategic Signet us financial the flexibility for What structural and sustainable Thank that clarity, to reliable everyone. hope has meaningful away you advantages, is joining consistent, and culture and you, deliver want today. winning I everyone growth again I took value. to shareholder

Operator

concludes for all joining. Please you disconnect This Thank call. today's now your lines.

Signet Jewelers Limited (SIG) 1 Sep 222023 Q2 Earnings call transcript