NYSE:SIG Signet Jewelers Q3 2025 Earnings Report $59.00 -0.01 (-0.02%) Closing price 04/25/2025 03:59 PM EasternExtended Trading$58.92 -0.08 (-0.14%) As of 04/25/2025 07:08 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Signet Jewelers EPS ResultsActual EPS$0.24Consensus EPS $0.29Beat/MissMissed by -$0.05One Year Ago EPS$0.24Signet Jewelers Revenue ResultsActual Revenue$1.35 billionExpected Revenue$1.37 billionBeat/MissMissed by -$18.16 millionYoY Revenue Growth-3.10%Signet Jewelers Announcement DetailsQuarterQ3 2025Date12/5/2024TimeBefore Market OpensConference Call DateThursday, December 5, 2024Conference Call Time8:30AM ETUpcoming EarningsSignet Jewelers' Q1 2026 earnings is scheduled for Thursday, June 12, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfilePowered by Signet Jewelers Q3 2025 Earnings Call TranscriptProvided by QuartrDecember 5, 2024 ShareLink copied to clipboard.There are 10 speakers on the call. Operator00:00:00Good morning, and welcome to the Signet Jewelers Third 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. Please note this event is being recorded. Joining us on the call today are Clayton Ward, Senior Director of Investor Relations and Capital Markets J. Operator00:00:29K. Simancic, Chief Executive Officer Joan Hilson, Chief Financial and Operations Officer and Rob Balu, Senior Vice President of Investor Relations. At this time, I would like to turn the conference over to Clayton. Please go ahead. Speaker 100:00:47Good morning. Welcome to Cigna Jewelers' Q3 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. Actual results may differ materially. Speaker 100:01:05We urge you to read the Risk Factors cautionary language and other disclosures in our annual report on Form 10 ks, quarterly reports on Form 10 Q and current reports on Form 8 ks. 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 these non GAAP financial measures as well as reconciliations of the non GAAP financial measures to the most directly comparable GAAP measures, investors should review the news release we posted on our website at ir.signetjewelers.com. With that, I'll turn it over to J. Speaker 100:01:47K. K. Speaker 200:01:48Cole:] Thank you, Clayton, and good morning, everyone. It's my pleasure to be with you all today, and I'd like to first thank all my Signet colleagues for their incredibly warm welcome. There are many aspects that attracted me to Signet that I'll share in a moment, but let me start by saying that the team is genuinely motivated by our purpose, committed to serving the needs of our customers and invested in the future of Signet. I've immersed myself in our business and culture, spending more time in our stores and offices, meeting with our team members and leadership. In my time at Signet, I've already seen firsthand how our team members recognize and celebrate the emotional connection we have with our customers when they are making a jewelry purchase. Speaker 200:02:35I've seen it in cities across our footprint, how passionate everyone here is about providing customers with the highest level of jewelry expertise to offer guidance to create lasting memories at milestone and everyday moments in their lives. As a career long merchant, I share this passion for serving customers. And I'd like to take this moment to recognize our Signet team for their dedication and hard work in the midst of our most important selling season. I'm also encouraged by our vendors and their commitment to strategic partnerships to create on trend merchandise. After a month at Signet, I'm energized by our opportunity to accelerate growth. Speaker 200:03:18Our strong brands, deep consumer focus and talented team provide a powerful foundation to strategically evolve and transform our business. In partnership with the management team, we are actively identifying new opportunities for the future. I recognize we have some challenges. Engagement incidents are somewhat less predictable on a short term basis. And as you know, lab created diamonds have disrupted the industry, but also create opportunities in the fashion category, as well as increase the breadth of assortment within bridal. Speaker 200:03:55I'm excited by the opportunities in front of us, and I believe Signet's strengths will overcome its challenges to yield growth ahead of us. Over the next few months, myself and our team are 1st and foremost focused on continuing to execute a successful holiday season. We will look to evolve our strategy to fuel customer and shareholder value and look forward to sharing details on this work and our plans in the coming months. I'll now turn the call over to Joan. Speaker 300:04:27Thanks, J. K, and good morning, everyone. I'd first like to thank our Cigna team. Your agility and commitment continue to be an inspiration, and I appreciate the drive to results in the Q3 and the preparations for the holiday season. I have 3 takeaways today. Speaker 300:04:46First, we continue to drive sales momentum with our 6th consecutive quarter of sequential same store sales improvement as we navigate a choppy consumer and industry environment this year. 2nd, we are well prepared this holiday season with a go to market strategy, which we believe will drive positive same store sales in the 4th quarter. Lastly, we're updating guidance to reflect the short term impacts from both digital banners, James Allen and Blue Nile, leadership transition costs and the permanent accretive impact from the early completion of the preferred shares redemption. Looking closer at the Q3, same store sales finished down 0.7%, a nearly 3 point sequential improvement to the 2nd quarter. In fact, when excluding the impact of our digital banners and hurricanes, we delivered same store sales growth of 1 point. Speaker 300:05:49Fashion sales were positive as we continue to see strong sales growth of new merchandise, partially offsetting the decline in engagement performance in our digital banners. Focusing more on newness, our strategy to drive higher penetration continues to resonate with customers, up nearly 8 points to last year in our core banners. The higher penetration of new merchandise is key to Signet's strategy around average transaction value or ATV and merchandise margin. For example, North America fashion ATV was up mid single digits in the 3rd quarter, driven by a more than 30% growth in lab created diamond fashion sales. Importantly, new products carried a more than 5 point margin in premium to our core average, which is a greater premium than last year. Speaker 300:06:44Turning to bridal. We finished the quarter with total North America engagement units down 2% due to performance in our digital banners. Excluding the digital banners, units were up nearly 4 points in the 3rd quarter, a 7 point sequential improvement to last quarter. Turning to ATV. Overall, North America bridal ATV was down mid single digits in the quarter due to competitive price pressure in loose stones. Speaker 300:07:15We continue to believe engagement units will recover over the next few years. Services revenue was up nearly 2% in the quarter as it continues to outpace merchandise sales. Extended Service Agreements or ESAs attachment rates grew 170 basis points to last year, driven by continued traction in post repair ESA and fashion merchandise. As a reminder, services carries a 20 point margin premium to merchandise. Turning to my second takeaway, we believe we'll deliver a positive holiday performance this year, driven by our comprehensive go to market strategy. Speaker 300:08:00We have positioned merchandise and marketing to lean into both fashion and bridal, building on the momentum we've seen in the last few quarters. We've increased inventory penetration of newness to over 30% in core banners, up more than 10 points to drive holiday selling. The consumer continues to be value oriented and the increase in new fashion merchandise allows us to provide customers a greater value at an attractive margin and ATV through product engineering. This work extends to bridal as well. December typically has twice the number of engagements as any other month, and we believe December engagement units will be positive. Speaker 300:08:45We delivered high single digit same store sales over the Black Friday to Cyber Monday weekend. However, keep in mind that this includes a moderate lift resulting from the closer proximity to Christmas and is reflected within our Q4 guidance expectations. As a reminder, our holiday sales are weighted to the 2 weeks before Christmas. Before I hand the call over to Rob, I'd like to discuss the changes in our expectations for the full year. As part of my expanded responsibilities, my initial assessment of challenges at our digital banners goes beyond the API integration issues we've previously shared. Speaker 300:09:27The delayed completion of replatforming work and aided search upgrades that began earlier in the year significantly impacted traffic and search placement upon the completion of that work in the back half of the quarter. While our Q4 expectations are lower for the digital banners than a few months ago due to these additional challenges, we've already seen some improvement in the Q4 compared to October's performance. And importantly, I am pleased to welcome our new digital banner President, Corinne Benson, who joined just a month ago. She has deep consumer and digital experience, including Tiffany's and most recently led Home Depot Online. I believe our talented digital team will benefit from her leadership, setting the stage to drive improvement and return to our long term growth path over the coming quarters. Speaker 300:10:24Alongside the update to our expectations of digital banners, we will incur leadership transition costs of approximately $7,000,000 that were not initially contemplated in our full year guidance. We are also reflecting the accretive impact from the early completion of preferred share redemption. I'll now hand the call over to Rob to discuss the financial results in more detail. Speaker 400:10:51Thanks, Joan, and good morning, everyone. Revenue for the quarter was $1,350,000,000 down 3%. As Joan mentioned, same store sales were down 0.7%. Same store sales reflects the continued drag from our digital banners of approximately 120 basis points. Digital banners did improve sequentially by approximately 500 basis points, but worsened in the second half of the quarter. Speaker 400:11:13We delivered adjusted gross margin of $486,000,000 or 36 percent of sales this quarter, flat to last year. Merchandise margin was also flat in the Q3 as we cycled a 2 50 basis point growth in the prior year. Turning to SG and A, adjusted expense was down $8,000,000 to $469,000,000 for the quarter. SG and A deleveraged by 50 basis points to 35 percent of sales due primarily to somewhat higher marketing expense that we referenced last quarter to pull some marketing spend ahead of the election as well as approximately $2,000,000 of leadership transition costs. Adjusted operating income was $16,200,000 for the quarter or 1.2 percent of sales. Speaker 400:11:52Adjusted EPS for the quarter was $0.24 and in line with last year. Turning to inventory, we ended the quarter at $2,100,000,000 up 2% to last year as we bolstered the penetration of new product as we enter the holiday season. We have completed the redemption of all remaining preferred shares this quarter for approximately $270,000,000 $810,000,000 in aggregate this year. Common share repurchases year to date totaled $118,000,000 or 1,300,000 shares at an average share price of approximately $91 These actions translate to an end of year share count reduction of more than 17% to fiscal 2024 year end to roughly 43,500,000 diluted shares. We continue to see capital returns to shareholders as an important part of our capital allocation strategy moving forward. Speaker 400:12:39Turning to liquidity, we ended the quarter with $158,000,000 of cash and equivalents and $253,000,000 temporarily drawn on the revolver. The draw on the revolver was the result of timing around the redemption of the preferred shares and holiday inventory purchases, and we have already repaid a significant portion so far in the 4th quarter. With that, I'll hand the call back to Jen to discuss our guidance for the Q4 and the fiscal year. Speaker 300:13:03Thanks, Rob. For the Q4, we expect same store sales in the range of flat to up 3%. This includes an approximate one point drag from our digital banners. We expect engagement units to be up low to mid single digits and fashion sales to be up modestly. We expect adjusted operating income between $397,000,000 to $427,000,000 on a higher operating margin rate to last year. Speaker 300:13:33Gross margin rate is expected to expand in the quarter with SG and A rate up slightly. We believe our guidance provides for flexibility in a competitive environment. This results in an update to our full year guidance range with same store sales down in the range of 2% to 3%. We expect adjusted operating income between $540,000,000 $570,000,000 and adjusted EPS between $9.62 10.08 dollars So in closing, before we go to questions, I'd like to remind you of the 3 takeaways I'm leaving you with today. 1, we delivered the quarter within our expectations 2, we're on track for positive holiday sales and finally, our updated guidance reflects short term impacts from both digital banners and leadership transition costs and the permanent accretive impact from the early completion of preferred shares redemption. Speaker 300:14:34Operator, let's now go to questions. Operator00:14:38Thank you. We will now begin the question and answer session. And your first Speaker 300:14:54question Operator00:14:56comes Speaker 500:15:08I guess two questions from me on the new guide. Just making sure I understand. So the new comp guide flat to 3, but there's 100 basis points of the digital. Did the core business, meaning ex digital, did your expectation on that business also come down? It looks like it did, but it also kind of sounds like you're more calling it the digital banners as the driver of it. Speaker 500:15:31So just trying to understand core versus the digital component. And then just a follow-up question on the guide. It looks like you're still guiding some nice margin expansion despite the lower comp. And I guess I'm trying to understand where that margin expansion has come from. Is that gross margin? Speaker 500:15:46Is that some expense initiatives you're flexing? So just kind of curious the puts and takes. Speaker 300:15:52Great. Thanks for the question, Ike. So with respect to our core banner performance, we're pleased with the core banner performance in the Q3. We were collectively, we were up. I would say from a guidance perspective, on the lower end, we're giving a little bit of a slight drop for the core for core banners within that guide for the Q4. Speaker 300:16:15But overall, pleased with how the Gore banners are generally performing. The digital banners are really the impact that we're seeing in our business. We noted in the Q3, it was 120 basis points impact to the comp. We did have a little bit of a drop related to the hurricanes. But overall, as we look forward, we think some of that will mitigate, but we still expect that one point drop related to digital. Speaker 300:16:44Gross margin, merchandise margin is really what's driving the gross margin expansion with some improvement related to the comp performance hike. But we're very pleased with how our fashion is performing. I shared that there was a meaningful expansion in merch margin rate related to the new product. And so that mix being driven up by our new product assortment is really what's driving the expansion in the Q4 related to gross margin. Speaker 500:17:20Can you quantify what you expect gross margin to be for 4Q and then just kind of comment on the promo environment, and Speaker 300:17:29then I'll pass it along? Yes. Not specifically, but we do expect it to expand based on the higher penetration of fashion newness. I would also add that in the Q3, there was a slight impact related to promoting some of the clearance product to make way for newness as we head into the Q4. We believe that we are competitively positioned from a pricing perspective and have really assessed our Q4 and believe we've provided for flexibility within our current view of gross margin. Speaker 500:18:11Thanks so much. Operator00:18:15Your next question comes from the line of Lorraine Hutchinson with Bank of America. Please go ahead. Speaker 600:18:22Hi. This is Melanie on for Lorraine. Thanks for taking our question. I just wanted to ask about the digital integration issues, if you can just expand upon those a bit more. It seems like you identified a few more things going on in that side of the business. Speaker 600:18:37So if you can just explain why these are still going on, what else needs to be done? Thank you. Speaker 300:18:44Thanks for the question. With respect to the digital banners, we have been working through the API integration and believe that those opportunities or challenges are behind us. We saw that working nicely over the Black Friday weekend for us. So as we assess what was happening in the latter part of the quarter with the replatforming work going in later than anticipated and aided search going in as well, it was closer proximity to the Q4. It's really impacted the overall performance of the digital banners. Speaker 300:19:26Now we're working through and as I mentioned on my prepared remarks that we're seeing some improvement relative to the later Q3 performance. We're seeing improvement in the month of November, but we still do expect a one point impact related to the digital banners in the 4th quarter. Operator00:19:48Thank you. Your next question comes from the line of Paul Lejuez with Citigroup. Please go ahead. Speaker 700:20:00Hey, couple of questions. Can you talk about what you're seeing on the cost side for both natural and lab? And how are retail prices changing relative to what you're seeing on the cost side? And then second, when we get through this year, what's the profitability going to look like from those digital banners? Are they even making any money this year? Speaker 700:20:26And what's the plan to improve profitability of those businesses for next year? Thanks. Speaker 300:20:34Thanks, Paul. So first question related to cost. We see costs within particularly within lab grown diamonds coming down faster than the retail is coming down. So the way that we've bridged that in our strategy, as you know, is we are providing design, branded product within bridal and with the introduction of more fashion with ATV. We see that carrying 2 times higher ATV than product without lab grown diamonds in it. Speaker 300:21:12So we're managing the retails with the infusion of new product within our assortment and we're very pleased with how that's performing. We're seeing our within our bridal and engagement, we see some decline in overall ATV as we mentioned on the call, but we're again balancing our assortments within our sweet spot of price points. So feeling very good about how engagement recovery is continuing to happen albeit slower. And we are continuing to stay on our strategy of new product offering and continuing to bring branded product within engagement. Now with respect to gold, we see little price resistance within our business on gold. Speaker 300:22:09The consumer understands the value and how gold is priced in the market. So as we see prices or costs in gold rise, we are able to adjust our pricing and or value engineer product to keep pricing within the consumer sweet spot. So feel that we've been able to navigate that. Now with respect to your digital banner question, we don't really comment per se on operating margins. But what I will say to you, Paul, is that the top line growth of the digital banners, the infusion of finished jewelry within Blue Nile and James Allen is very important to the merchandise margin expansion for those banners. Speaker 300:23:00And when we and we are seeing that come in for this Q4 and in some magnitude for the first time. So as we look forward, we clearly expect Blue Nile and James Island to get back on track to our long term growth plans and see assortment mix as well as expense management as part of the growing profitability of those banners. Speaker 700:23:32Thanks, Kunal. Operator00:23:36And your next question comes from the line of Mauricio Serna with UBS. Please go ahead. Speaker 800:23:42Hi, morning. Thanks for taking my question. Maybe could you talk about your quarter to date same store sales, just giving your commentary about Black Friday sales performance? And then also maybe could you give us a sense on the puts and takes that you're seeing into 2025 margin, rising pricing, commodity costs like gold, any incentive comp rebuild, just like getting a better sense on that? And then I have a quick follow-up on share count. Speaker 800:24:15Thank you. Speaker 300:24:17Okay. So as I mentioned, Maurice, we had a high single digit same store sales performance over the Black Friday weekend through Cyber Monday. Just as a reminder, there's a modest impact there for proximity to Christmas. The overall performance of the quarter to date is reflected within our Q4 guidance. So it's within considered within our guidance range. Speaker 300:24:47And I also mentioned within my prepared remarks that the 2 weeks prior to Christmas are very important to our business and obviously our highest selling period. So we have a good portion of the quarter to go. And so all of that's reflected within our guidance. Then with respect to 25, we'll be back to you on the Q4 earnings call with our view of fiscal 'twenty six, I think you're asking about. But we'll be back to you on that. Speaker 300:25:22Clearly, we are evaluating our operating plan, working with JK as he's come on board and with the management team. And we have a lot of work ahead of us to, as JK mentioned, we're actively identifying opportunities for our future. And we'll be happy to share those at that time. Speaker 800:25:46Got it. And just I guess just to make sure I understood, does that mean that your quarter to date is within flat to up 3%? And then the follow-up I had on the share count, just trying to understand like how are you getting to the I think like the 46.2 share count for the entire year, just like doing the numbers on what you already did and even like not assuming any more buybacks, I'm getting to like a 45.5, which just trying to understand like anything there to consider on the calculations for the diluted share count for the full year? Speaker 400:26:24Hey, Mauricio. Thank you for the question. This is Rob. Yes, in terms of quarter days, as Jim said, we're not providing exactly the number, but there is the holiday shift a little bit closer to Christmas and we feel very confident in our ability to deliver a positive comp for the quarter, which is provided in our quarterly guidance and certainly reflected in a strong Black Friday weekend. In terms of the diluted share count, I think everyone knows it's a fairly complicated calculation with the preferred shares this year, but due to the impact that we had some of the year calculated before we repurchased some of the preferred shares in April and then amended the settlement agreement. Speaker 400:27:02And so the share count is was about $48,000,000 in the first half of the year on a diluted basis on an adjusted EPS basis. And obviously, you can get to roughly $44,000,000 in the back half of the year to get to the 46,200,000 shares. And as we put in our earnings release, we do expect to exit the year at $43,500,000 shares, which should provide some additional EPS accretion going forward. Speaker 800:27:26Got it. Thank you so much. Operator00:27:31And your next question comes from the line of Jim Sanderson with Northcoast Research. Please go ahead. Speaker 900:27:38Hey, thanks for the question. I wanted to go back to the commentary on the bridal category. I think you reported that average transaction value is down. Can you put that into perspective for us whether that's getting worse or better and what the key drivers of that decline are? Speaker 300:27:55Sure. I'll take that one, Jim. So engagement units that were are recovering and although slower than we expected, they were down overall 2% in the 3rd quarter, but it did represent a 4 point sequential improvement. If you look at the business excluding the digital banners in the Q3, our North America engagement units were up nearly 4% in Q3. So that is a 7 point sequential improvement in our North America banner. Speaker 300:28:28So also a positive signal towards the engagement recovery. And so as we look forward, as I mentioned, we expect that bridal, our engagement units in the Q4 will continue to be positive, albeit with the digital banners impact, it will have some impact on that number, but we've reflected that as we've mentioned earlier in our guidance. So overall engagement recovery underway, we believe that we'll continue to see that recovery, although it may be a bit extended from our earlier view on that. Speaker 900:29:13Okay. And Speaker 800:29:17transaction value? Go ahead, Speaker 900:29:19Shay. I apologize. I just wanted to make sure I understood Speaker 300:29:24the drivers. So the average transaction value was down in the Q3. It was also had a significant impact related to the digital banners because there's such a high penetration of engagement within the digital banners. So go forward, we were pleased with the overall flat average transaction value, Jim, because our fashion assortment is providing us the ability to manage our way through what may be a bit of a choppy environment related to bridal ATV. So feel that it's stable and we're able to manage with the mix of our business. Speaker 900:30:11All right. And just one last follow-up question. I think you reported numbers for Black Friday this year and Cyber Monday. Could you remind us what that trend was reported last year for comparison? Speaker 300:30:25We didn't provide that last year, Jim. But just to remind us here, we reported a high single we're sharing a high single digit comp over that weekend, which is included in our guidance for positive comps in the Q4. Speaker 900:30:42Understood. Thank you. Speaker 300:30:45Thank you. Operator00:30:48And we have a follow-up question coming from Mauricio Serna with UBS. Please go ahead. Speaker 800:30:54Yes. Thank you. Just a quick follow-up. I wanted to understand the digital banners like the impact on the total price like why is that because of engagements? Is there more promotions? Speaker 800:31:07And just on the promotional environment, are you thinking about that in Q3 versus the previous quarters? And how are you thinking about that for Q4? Thank you. Speaker 300:31:18Okay. So the digital banners we said had a 120 basis point impact to comp in the Q3. We saw with the timing of replatforming being completed later in Q3 as well as the AI or I'm sorry, the aided search upgrades that we put into play, they negatively impacted performance. And we're seeing that come around somewhat in the Q4 and we expect it to be a one point negative impact to comp on the Q4 from James Allen and Blue Nile. They have a high penetration of bridal or engagement within their business. Speaker 300:32:05Therefore, it's impacting our overall engagement performance. But our North America banners are positive as I mentioned in engagements in the Q3 when you exclude the digital banner impact. With respect to pricing and promotion in the Q3, I did mention that there were some clearance that we took pricing on to move through inventory to importantly make way for new product as we enter the Q4, which has a much higher penetration than we did last year, I think 9 to 10 points. So important for us to do that and believe that we've positioned that nicely heading into the quarter. Our guidance includes some what we believe is a nice flexibility within a promotional posture for the Q4, which will enable us to remain competitive within our guidance. Speaker 800:33:11Understood. Thank you so much. Operator00:33:15Thank you. And that is all the time we have for questions. I would like to turn it back to our CEO, J. K. Simancic for closing remarks. Speaker 200:33:23Thank you. In closing, I'd like to again thank our Signet team for their dedication to our purpose and for welcoming me to the team. I believe the opportunities ahead of us to evolve Signet will deliver further value to both shareholders and customers. I thank you for your time today. We look forward to speaking to you again in March. Speaker 200:33:43Goodbye. Operator00:33:47Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallSignet Jewelers Q3 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Signet Jewelers Earnings HeadlinesID theft ring carried out in Bay Area counties busted: State A.G. BontaApril 26 at 7:39 AM | msn.comSignet Jewelers (SIG) Receives a Hold from Wells FargoApril 15, 2025 | markets.businessinsider.comURGENT: Someone's Moving Gold Out of London...People who don’t understand the gold market are about to lose a lot of money. Unfortunately, most so-called “gold analysts” have it all wrong… They tell you to invest in gold ETFs - because the popular mining ETFs will someday catch fire and close the price gap with spot gold. April 27, 2025 | Golden Portfolio (Ad)Signet Jewelers Reaches Record $10M Fundraising Benefiting St. Jude Children’s Research HospitalApril 10, 2025 | uk.finance.yahoo.comSignet Jewelers downgraded to Equal Weight from Overweight at Wells FargoApril 9, 2025 | markets.businessinsider.comJim Cramer Once Praised Signet (SIG) as a Turnaround – Now It’s Down Nearly 50%April 8, 2025 | msn.comSee More Signet Jewelers Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Signet Jewelers? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Signet Jewelers and other key companies, straight to your email. Email Address About Signet JewelersSignet Jewelers (NYSE:SIG) operates as a diamond jewelry retailer. It operates through three segments: North America, International, and Other. The North America segment operates jewelry stores in jewelry stores in malls, mall-based kiosks, and off-mall locations in the United States and Canada primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria Of Jewelry, Jared Vault, Zales Outlet, Zales Jewelers, Diamonds Direct, James Allen, Banter by Piercing Pagoda, and Peoples Jewellers names, as well as operates online through its digital banners, James Allen and Blue Nile. This segment also engages in jewelry subscription business. The International segment operates stores in shopping malls and off-mall locations primarily under the H.Samuel and Ernest Jones brands in the United Kingdom, Republic of Ireland, and Channel Islands. The Other segment is involved in the purchase and conversion of rough diamonds to polished stones, as well as the provision of diamond polishing services. Signet Jewelers Limited is based in Hamilton, Bermuda.View Signet Jewelers ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Texas Instruments: Earnings Beat, Upbeat Guidance Fuel RecoveryMarket Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of Earnings Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 10 speakers on the call. Operator00:00:00Good morning, and welcome to the Signet Jewelers Third 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. Please note this event is being recorded. Joining us on the call today are Clayton Ward, Senior Director of Investor Relations and Capital Markets J. Operator00:00:29K. Simancic, Chief Executive Officer Joan Hilson, Chief Financial and Operations Officer and Rob Balu, Senior Vice President of Investor Relations. At this time, I would like to turn the conference over to Clayton. Please go ahead. Speaker 100:00:47Good morning. Welcome to Cigna Jewelers' Q3 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. Actual results may differ materially. Speaker 100:01:05We urge you to read the Risk Factors cautionary language and other disclosures in our annual report on Form 10 ks, quarterly reports on Form 10 Q and current reports on Form 8 ks. 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 these non GAAP financial measures as well as reconciliations of the non GAAP financial measures to the most directly comparable GAAP measures, investors should review the news release we posted on our website at ir.signetjewelers.com. With that, I'll turn it over to J. Speaker 100:01:47K. K. Speaker 200:01:48Cole:] Thank you, Clayton, and good morning, everyone. It's my pleasure to be with you all today, and I'd like to first thank all my Signet colleagues for their incredibly warm welcome. There are many aspects that attracted me to Signet that I'll share in a moment, but let me start by saying that the team is genuinely motivated by our purpose, committed to serving the needs of our customers and invested in the future of Signet. I've immersed myself in our business and culture, spending more time in our stores and offices, meeting with our team members and leadership. In my time at Signet, I've already seen firsthand how our team members recognize and celebrate the emotional connection we have with our customers when they are making a jewelry purchase. Speaker 200:02:35I've seen it in cities across our footprint, how passionate everyone here is about providing customers with the highest level of jewelry expertise to offer guidance to create lasting memories at milestone and everyday moments in their lives. As a career long merchant, I share this passion for serving customers. And I'd like to take this moment to recognize our Signet team for their dedication and hard work in the midst of our most important selling season. I'm also encouraged by our vendors and their commitment to strategic partnerships to create on trend merchandise. After a month at Signet, I'm energized by our opportunity to accelerate growth. Speaker 200:03:18Our strong brands, deep consumer focus and talented team provide a powerful foundation to strategically evolve and transform our business. In partnership with the management team, we are actively identifying new opportunities for the future. I recognize we have some challenges. Engagement incidents are somewhat less predictable on a short term basis. And as you know, lab created diamonds have disrupted the industry, but also create opportunities in the fashion category, as well as increase the breadth of assortment within bridal. Speaker 200:03:55I'm excited by the opportunities in front of us, and I believe Signet's strengths will overcome its challenges to yield growth ahead of us. Over the next few months, myself and our team are 1st and foremost focused on continuing to execute a successful holiday season. We will look to evolve our strategy to fuel customer and shareholder value and look forward to sharing details on this work and our plans in the coming months. I'll now turn the call over to Joan. Speaker 300:04:27Thanks, J. K, and good morning, everyone. I'd first like to thank our Cigna team. Your agility and commitment continue to be an inspiration, and I appreciate the drive to results in the Q3 and the preparations for the holiday season. I have 3 takeaways today. Speaker 300:04:46First, we continue to drive sales momentum with our 6th consecutive quarter of sequential same store sales improvement as we navigate a choppy consumer and industry environment this year. 2nd, we are well prepared this holiday season with a go to market strategy, which we believe will drive positive same store sales in the 4th quarter. Lastly, we're updating guidance to reflect the short term impacts from both digital banners, James Allen and Blue Nile, leadership transition costs and the permanent accretive impact from the early completion of the preferred shares redemption. Looking closer at the Q3, same store sales finished down 0.7%, a nearly 3 point sequential improvement to the 2nd quarter. In fact, when excluding the impact of our digital banners and hurricanes, we delivered same store sales growth of 1 point. Speaker 300:05:49Fashion sales were positive as we continue to see strong sales growth of new merchandise, partially offsetting the decline in engagement performance in our digital banners. Focusing more on newness, our strategy to drive higher penetration continues to resonate with customers, up nearly 8 points to last year in our core banners. The higher penetration of new merchandise is key to Signet's strategy around average transaction value or ATV and merchandise margin. For example, North America fashion ATV was up mid single digits in the 3rd quarter, driven by a more than 30% growth in lab created diamond fashion sales. Importantly, new products carried a more than 5 point margin in premium to our core average, which is a greater premium than last year. Speaker 300:06:44Turning to bridal. We finished the quarter with total North America engagement units down 2% due to performance in our digital banners. Excluding the digital banners, units were up nearly 4 points in the 3rd quarter, a 7 point sequential improvement to last quarter. Turning to ATV. Overall, North America bridal ATV was down mid single digits in the quarter due to competitive price pressure in loose stones. Speaker 300:07:15We continue to believe engagement units will recover over the next few years. Services revenue was up nearly 2% in the quarter as it continues to outpace merchandise sales. Extended Service Agreements or ESAs attachment rates grew 170 basis points to last year, driven by continued traction in post repair ESA and fashion merchandise. As a reminder, services carries a 20 point margin premium to merchandise. Turning to my second takeaway, we believe we'll deliver a positive holiday performance this year, driven by our comprehensive go to market strategy. Speaker 300:08:00We have positioned merchandise and marketing to lean into both fashion and bridal, building on the momentum we've seen in the last few quarters. We've increased inventory penetration of newness to over 30% in core banners, up more than 10 points to drive holiday selling. The consumer continues to be value oriented and the increase in new fashion merchandise allows us to provide customers a greater value at an attractive margin and ATV through product engineering. This work extends to bridal as well. December typically has twice the number of engagements as any other month, and we believe December engagement units will be positive. Speaker 300:08:45We delivered high single digit same store sales over the Black Friday to Cyber Monday weekend. However, keep in mind that this includes a moderate lift resulting from the closer proximity to Christmas and is reflected within our Q4 guidance expectations. As a reminder, our holiday sales are weighted to the 2 weeks before Christmas. Before I hand the call over to Rob, I'd like to discuss the changes in our expectations for the full year. As part of my expanded responsibilities, my initial assessment of challenges at our digital banners goes beyond the API integration issues we've previously shared. Speaker 300:09:27The delayed completion of replatforming work and aided search upgrades that began earlier in the year significantly impacted traffic and search placement upon the completion of that work in the back half of the quarter. While our Q4 expectations are lower for the digital banners than a few months ago due to these additional challenges, we've already seen some improvement in the Q4 compared to October's performance. And importantly, I am pleased to welcome our new digital banner President, Corinne Benson, who joined just a month ago. She has deep consumer and digital experience, including Tiffany's and most recently led Home Depot Online. I believe our talented digital team will benefit from her leadership, setting the stage to drive improvement and return to our long term growth path over the coming quarters. Speaker 300:10:24Alongside the update to our expectations of digital banners, we will incur leadership transition costs of approximately $7,000,000 that were not initially contemplated in our full year guidance. We are also reflecting the accretive impact from the early completion of preferred share redemption. I'll now hand the call over to Rob to discuss the financial results in more detail. Speaker 400:10:51Thanks, Joan, and good morning, everyone. Revenue for the quarter was $1,350,000,000 down 3%. As Joan mentioned, same store sales were down 0.7%. Same store sales reflects the continued drag from our digital banners of approximately 120 basis points. Digital banners did improve sequentially by approximately 500 basis points, but worsened in the second half of the quarter. Speaker 400:11:13We delivered adjusted gross margin of $486,000,000 or 36 percent of sales this quarter, flat to last year. Merchandise margin was also flat in the Q3 as we cycled a 2 50 basis point growth in the prior year. Turning to SG and A, adjusted expense was down $8,000,000 to $469,000,000 for the quarter. SG and A deleveraged by 50 basis points to 35 percent of sales due primarily to somewhat higher marketing expense that we referenced last quarter to pull some marketing spend ahead of the election as well as approximately $2,000,000 of leadership transition costs. Adjusted operating income was $16,200,000 for the quarter or 1.2 percent of sales. Speaker 400:11:52Adjusted EPS for the quarter was $0.24 and in line with last year. Turning to inventory, we ended the quarter at $2,100,000,000 up 2% to last year as we bolstered the penetration of new product as we enter the holiday season. We have completed the redemption of all remaining preferred shares this quarter for approximately $270,000,000 $810,000,000 in aggregate this year. Common share repurchases year to date totaled $118,000,000 or 1,300,000 shares at an average share price of approximately $91 These actions translate to an end of year share count reduction of more than 17% to fiscal 2024 year end to roughly 43,500,000 diluted shares. We continue to see capital returns to shareholders as an important part of our capital allocation strategy moving forward. Speaker 400:12:39Turning to liquidity, we ended the quarter with $158,000,000 of cash and equivalents and $253,000,000 temporarily drawn on the revolver. The draw on the revolver was the result of timing around the redemption of the preferred shares and holiday inventory purchases, and we have already repaid a significant portion so far in the 4th quarter. With that, I'll hand the call back to Jen to discuss our guidance for the Q4 and the fiscal year. Speaker 300:13:03Thanks, Rob. For the Q4, we expect same store sales in the range of flat to up 3%. This includes an approximate one point drag from our digital banners. We expect engagement units to be up low to mid single digits and fashion sales to be up modestly. We expect adjusted operating income between $397,000,000 to $427,000,000 on a higher operating margin rate to last year. Speaker 300:13:33Gross margin rate is expected to expand in the quarter with SG and A rate up slightly. We believe our guidance provides for flexibility in a competitive environment. This results in an update to our full year guidance range with same store sales down in the range of 2% to 3%. We expect adjusted operating income between $540,000,000 $570,000,000 and adjusted EPS between $9.62 10.08 dollars So in closing, before we go to questions, I'd like to remind you of the 3 takeaways I'm leaving you with today. 1, we delivered the quarter within our expectations 2, we're on track for positive holiday sales and finally, our updated guidance reflects short term impacts from both digital banners and leadership transition costs and the permanent accretive impact from the early completion of preferred shares redemption. Speaker 300:14:34Operator, let's now go to questions. Operator00:14:38Thank you. We will now begin the question and answer session. And your first Speaker 300:14:54question Operator00:14:56comes Speaker 500:15:08I guess two questions from me on the new guide. Just making sure I understand. So the new comp guide flat to 3, but there's 100 basis points of the digital. Did the core business, meaning ex digital, did your expectation on that business also come down? It looks like it did, but it also kind of sounds like you're more calling it the digital banners as the driver of it. Speaker 500:15:31So just trying to understand core versus the digital component. And then just a follow-up question on the guide. It looks like you're still guiding some nice margin expansion despite the lower comp. And I guess I'm trying to understand where that margin expansion has come from. Is that gross margin? Speaker 500:15:46Is that some expense initiatives you're flexing? So just kind of curious the puts and takes. Speaker 300:15:52Great. Thanks for the question, Ike. So with respect to our core banner performance, we're pleased with the core banner performance in the Q3. We were collectively, we were up. I would say from a guidance perspective, on the lower end, we're giving a little bit of a slight drop for the core for core banners within that guide for the Q4. Speaker 300:16:15But overall, pleased with how the Gore banners are generally performing. The digital banners are really the impact that we're seeing in our business. We noted in the Q3, it was 120 basis points impact to the comp. We did have a little bit of a drop related to the hurricanes. But overall, as we look forward, we think some of that will mitigate, but we still expect that one point drop related to digital. Speaker 300:16:44Gross margin, merchandise margin is really what's driving the gross margin expansion with some improvement related to the comp performance hike. But we're very pleased with how our fashion is performing. I shared that there was a meaningful expansion in merch margin rate related to the new product. And so that mix being driven up by our new product assortment is really what's driving the expansion in the Q4 related to gross margin. Speaker 500:17:20Can you quantify what you expect gross margin to be for 4Q and then just kind of comment on the promo environment, and Speaker 300:17:29then I'll pass it along? Yes. Not specifically, but we do expect it to expand based on the higher penetration of fashion newness. I would also add that in the Q3, there was a slight impact related to promoting some of the clearance product to make way for newness as we head into the Q4. We believe that we are competitively positioned from a pricing perspective and have really assessed our Q4 and believe we've provided for flexibility within our current view of gross margin. Speaker 500:18:11Thanks so much. Operator00:18:15Your next question comes from the line of Lorraine Hutchinson with Bank of America. Please go ahead. Speaker 600:18:22Hi. This is Melanie on for Lorraine. Thanks for taking our question. I just wanted to ask about the digital integration issues, if you can just expand upon those a bit more. It seems like you identified a few more things going on in that side of the business. Speaker 600:18:37So if you can just explain why these are still going on, what else needs to be done? Thank you. Speaker 300:18:44Thanks for the question. With respect to the digital banners, we have been working through the API integration and believe that those opportunities or challenges are behind us. We saw that working nicely over the Black Friday weekend for us. So as we assess what was happening in the latter part of the quarter with the replatforming work going in later than anticipated and aided search going in as well, it was closer proximity to the Q4. It's really impacted the overall performance of the digital banners. Speaker 300:19:26Now we're working through and as I mentioned on my prepared remarks that we're seeing some improvement relative to the later Q3 performance. We're seeing improvement in the month of November, but we still do expect a one point impact related to the digital banners in the 4th quarter. Operator00:19:48Thank you. Your next question comes from the line of Paul Lejuez with Citigroup. Please go ahead. Speaker 700:20:00Hey, couple of questions. Can you talk about what you're seeing on the cost side for both natural and lab? And how are retail prices changing relative to what you're seeing on the cost side? And then second, when we get through this year, what's the profitability going to look like from those digital banners? Are they even making any money this year? Speaker 700:20:26And what's the plan to improve profitability of those businesses for next year? Thanks. Speaker 300:20:34Thanks, Paul. So first question related to cost. We see costs within particularly within lab grown diamonds coming down faster than the retail is coming down. So the way that we've bridged that in our strategy, as you know, is we are providing design, branded product within bridal and with the introduction of more fashion with ATV. We see that carrying 2 times higher ATV than product without lab grown diamonds in it. Speaker 300:21:12So we're managing the retails with the infusion of new product within our assortment and we're very pleased with how that's performing. We're seeing our within our bridal and engagement, we see some decline in overall ATV as we mentioned on the call, but we're again balancing our assortments within our sweet spot of price points. So feeling very good about how engagement recovery is continuing to happen albeit slower. And we are continuing to stay on our strategy of new product offering and continuing to bring branded product within engagement. Now with respect to gold, we see little price resistance within our business on gold. Speaker 300:22:09The consumer understands the value and how gold is priced in the market. So as we see prices or costs in gold rise, we are able to adjust our pricing and or value engineer product to keep pricing within the consumer sweet spot. So feel that we've been able to navigate that. Now with respect to your digital banner question, we don't really comment per se on operating margins. But what I will say to you, Paul, is that the top line growth of the digital banners, the infusion of finished jewelry within Blue Nile and James Allen is very important to the merchandise margin expansion for those banners. Speaker 300:23:00And when we and we are seeing that come in for this Q4 and in some magnitude for the first time. So as we look forward, we clearly expect Blue Nile and James Island to get back on track to our long term growth plans and see assortment mix as well as expense management as part of the growing profitability of those banners. Speaker 700:23:32Thanks, Kunal. Operator00:23:36And your next question comes from the line of Mauricio Serna with UBS. Please go ahead. Speaker 800:23:42Hi, morning. Thanks for taking my question. Maybe could you talk about your quarter to date same store sales, just giving your commentary about Black Friday sales performance? And then also maybe could you give us a sense on the puts and takes that you're seeing into 2025 margin, rising pricing, commodity costs like gold, any incentive comp rebuild, just like getting a better sense on that? And then I have a quick follow-up on share count. Speaker 800:24:15Thank you. Speaker 300:24:17Okay. So as I mentioned, Maurice, we had a high single digit same store sales performance over the Black Friday weekend through Cyber Monday. Just as a reminder, there's a modest impact there for proximity to Christmas. The overall performance of the quarter to date is reflected within our Q4 guidance. So it's within considered within our guidance range. Speaker 300:24:47And I also mentioned within my prepared remarks that the 2 weeks prior to Christmas are very important to our business and obviously our highest selling period. So we have a good portion of the quarter to go. And so all of that's reflected within our guidance. Then with respect to 25, we'll be back to you on the Q4 earnings call with our view of fiscal 'twenty six, I think you're asking about. But we'll be back to you on that. Speaker 300:25:22Clearly, we are evaluating our operating plan, working with JK as he's come on board and with the management team. And we have a lot of work ahead of us to, as JK mentioned, we're actively identifying opportunities for our future. And we'll be happy to share those at that time. Speaker 800:25:46Got it. And just I guess just to make sure I understood, does that mean that your quarter to date is within flat to up 3%? And then the follow-up I had on the share count, just trying to understand like how are you getting to the I think like the 46.2 share count for the entire year, just like doing the numbers on what you already did and even like not assuming any more buybacks, I'm getting to like a 45.5, which just trying to understand like anything there to consider on the calculations for the diluted share count for the full year? Speaker 400:26:24Hey, Mauricio. Thank you for the question. This is Rob. Yes, in terms of quarter days, as Jim said, we're not providing exactly the number, but there is the holiday shift a little bit closer to Christmas and we feel very confident in our ability to deliver a positive comp for the quarter, which is provided in our quarterly guidance and certainly reflected in a strong Black Friday weekend. In terms of the diluted share count, I think everyone knows it's a fairly complicated calculation with the preferred shares this year, but due to the impact that we had some of the year calculated before we repurchased some of the preferred shares in April and then amended the settlement agreement. Speaker 400:27:02And so the share count is was about $48,000,000 in the first half of the year on a diluted basis on an adjusted EPS basis. And obviously, you can get to roughly $44,000,000 in the back half of the year to get to the 46,200,000 shares. And as we put in our earnings release, we do expect to exit the year at $43,500,000 shares, which should provide some additional EPS accretion going forward. Speaker 800:27:26Got it. Thank you so much. Operator00:27:31And your next question comes from the line of Jim Sanderson with Northcoast Research. Please go ahead. Speaker 900:27:38Hey, thanks for the question. I wanted to go back to the commentary on the bridal category. I think you reported that average transaction value is down. Can you put that into perspective for us whether that's getting worse or better and what the key drivers of that decline are? Speaker 300:27:55Sure. I'll take that one, Jim. So engagement units that were are recovering and although slower than we expected, they were down overall 2% in the 3rd quarter, but it did represent a 4 point sequential improvement. If you look at the business excluding the digital banners in the Q3, our North America engagement units were up nearly 4% in Q3. So that is a 7 point sequential improvement in our North America banner. Speaker 300:28:28So also a positive signal towards the engagement recovery. And so as we look forward, as I mentioned, we expect that bridal, our engagement units in the Q4 will continue to be positive, albeit with the digital banners impact, it will have some impact on that number, but we've reflected that as we've mentioned earlier in our guidance. So overall engagement recovery underway, we believe that we'll continue to see that recovery, although it may be a bit extended from our earlier view on that. Speaker 900:29:13Okay. And Speaker 800:29:17transaction value? Go ahead, Speaker 900:29:19Shay. I apologize. I just wanted to make sure I understood Speaker 300:29:24the drivers. So the average transaction value was down in the Q3. It was also had a significant impact related to the digital banners because there's such a high penetration of engagement within the digital banners. So go forward, we were pleased with the overall flat average transaction value, Jim, because our fashion assortment is providing us the ability to manage our way through what may be a bit of a choppy environment related to bridal ATV. So feel that it's stable and we're able to manage with the mix of our business. Speaker 900:30:11All right. And just one last follow-up question. I think you reported numbers for Black Friday this year and Cyber Monday. Could you remind us what that trend was reported last year for comparison? Speaker 300:30:25We didn't provide that last year, Jim. But just to remind us here, we reported a high single we're sharing a high single digit comp over that weekend, which is included in our guidance for positive comps in the Q4. Speaker 900:30:42Understood. Thank you. Speaker 300:30:45Thank you. Operator00:30:48And we have a follow-up question coming from Mauricio Serna with UBS. Please go ahead. Speaker 800:30:54Yes. Thank you. Just a quick follow-up. I wanted to understand the digital banners like the impact on the total price like why is that because of engagements? Is there more promotions? Speaker 800:31:07And just on the promotional environment, are you thinking about that in Q3 versus the previous quarters? And how are you thinking about that for Q4? Thank you. Speaker 300:31:18Okay. So the digital banners we said had a 120 basis point impact to comp in the Q3. We saw with the timing of replatforming being completed later in Q3 as well as the AI or I'm sorry, the aided search upgrades that we put into play, they negatively impacted performance. And we're seeing that come around somewhat in the Q4 and we expect it to be a one point negative impact to comp on the Q4 from James Allen and Blue Nile. They have a high penetration of bridal or engagement within their business. Speaker 300:32:05Therefore, it's impacting our overall engagement performance. But our North America banners are positive as I mentioned in engagements in the Q3 when you exclude the digital banner impact. With respect to pricing and promotion in the Q3, I did mention that there were some clearance that we took pricing on to move through inventory to importantly make way for new product as we enter the Q4, which has a much higher penetration than we did last year, I think 9 to 10 points. So important for us to do that and believe that we've positioned that nicely heading into the quarter. Our guidance includes some what we believe is a nice flexibility within a promotional posture for the Q4, which will enable us to remain competitive within our guidance. Speaker 800:33:11Understood. Thank you so much. Operator00:33:15Thank you. And that is all the time we have for questions. I would like to turn it back to our CEO, J. K. Simancic for closing remarks. Speaker 200:33:23Thank you. In closing, I'd like to again thank our Signet team for their dedication to our purpose and for welcoming me to the team. I believe the opportunities ahead of us to evolve Signet will deliver further value to both shareholders and customers. I thank you for your time today. We look forward to speaking to you again in March. Speaker 200:33:43Goodbye. Operator00:33:47Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for participating. 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