Signet Jewelers Limited (SIG) 9 Jun 222023 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Signet Jewelers First Quarter Fiscal 2023 Earnings Call. My name is Irene and I will be coordinating this event. I would like to turn the conference over to our host, Vinny Sinisi, Senior Vice President of Investor Relations. Vinnie, please go ahead.

morning. Good our call. to quarter first welcome conference And

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

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

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

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

call And Thank the you on us today. all of Vinnie. thanks to you, with

Before results, our first to like a to discuss thank Signet team. I'd moment our I take quarter

to strengthen There and are continues greatest three key quarter me. their on every team that our and in focus a want business today. advantage competitive to Our quarter. They of of source to for inspiration part brilliance with Signet’s execute capabilities after are never we ending messages

profile, are deliver double-digit after annual using year. year our have can we First, confident operating that our we improved and scale, structurally margin margin

third, past the to we business. remain while kinds macroeconomic sharply to we've on critical returns, also share drive capabilities respond to And continuing growth the give been focused in we that us Second, on agility we are that invest These advantages challenges during developing quarter. the our over years. widening first shareholder capabilities the saw of few competitive based

We've compared X% of macroenvironment, expanded basis including of this we in Diamonds to organic store quarter, significantly profile leverage we've commerce our improved X.X% an excludes margin team and to growth, that's rigorous the a to the ours of made nearly all sheet. rationalize enabled delivered strength revenue mindset our and operating quarter. billion $X.X this us fleet in despite Signet underscored XX.X% investments with year analytics, which XX cost last last our non-GAAP data by Our increase the margin balance connected year, And discipline above points Direct.

than big broad and continuing four last In critical growth entire which Signet across delivered we growth more million price in a in based. more revenue $X,XXX. grooms, are point in QX only at our They XX% total sales bridal we expansion. brides businesses, than services, with We're parties. over on. are wedding more $XXX capitalizing grow revenue In we not to $XX with Diamonds all resulting to luxury of In points above and are strategies. delivered revenue to establish year, for grew accessible of lifetime and year. delivered value. Jared relationships, acquisition Our drivers entry, in million our quarter. expectations margin but is where-to-play opportunity XX% compared our this in operating Direct Weddings last an than nearly

our We of online relationships are offerings are digital, expanding orders our capabilities. deepen XX% flexible customer fulfillment in And leveraging service quarter-over-quarter. to now

from ship grew store, we fulfilled in through store value this buy quarter. average pickup that online, or order than orders XX% For more the

in our diversified however banner shop and advantages want they to results. customers to important the can us see an whenever, wherever is these with differentiating strength. serve increasingly portfolio and Our ability We of

market to this challenges same ability across a leveraged in banner other has the value conditions our of in our grow jewelry part result. by The among bridal particular growth capturing continue to point on business. to as its customers and face where the adjust impacted I captured dynamically consumers to inflation even outpaced of We portfolio, to in softness of my a pressures. and value the by want a how. balance delivering, delivering Because for last Banter offset our the only of trends similarly now where, is sustain the we're in company value spending banners is the but industry these are we to we For results, can example, our key in self-purchase stimulus are into believe performance. leaning portfolio segment, no demand how confidence challenging other We not the accessible we're year which what more and in tier consumer macroenvironment, and luxury, comments economic that especially focus

closer a this. our at use business. capabilities, how I'd to insights doing take like We consumer our to starting how of capture virtually with let's win consumer-inspired share So, drive look analytics data our every that four of we're quick inspired. examples aspect to

engineer the on match, our margins. in navigating response, alongside to hard overall war and competitive planned advantages anticipated, while deceleration scale vertical that traffic price Ukraine. the for ahead. shoppers. prices below increased integration across began the proving at and well factors impacts to February was at in inflation pressure we are our enable the relationships last that that late customers quarter, this scale, we of provide a we we These lap points lead demand to protecting customers. seen pieces also capabilities, more to as lower heightened we've in our and last all We impact value time selectively to as inflation is value the strategic us value March year’s stimulus but compared jewelry But our of banners. softer and same vendor inflation industry, saw year. made We've the our economic First, to up affordable in we leveraged traffic with In

We Day and and continued drive tiered accessible demand points. our from assortment who carrots saw growth our Signet’s flat quality roughly beyond. to want customers assortments larger coming softening up traffic, we've to higher tailored the and at even last Second, We luxury capture value to highest price year. some accordingly. who rate metals Valentine's we in in conversion our tier with this into opportunity And held

quarter, before in fiscal XX% up the America During pandemic. up to than and the XXXX average North nearly more XX% last to was Signet’s transaction value year

Third, we we've economic financing. base range customers a options, curated a an breadth of beyond values, think our services financial traditional and We especially our as provide credit external in options consumer-inspired with environments. customer go of which know that about uncertain opportunity to payment

we commitment jewelry industry Sustainability important inspired which customers service this well. Our fully We outsourced sustainability, in lead for and designed and A which of is fourth to is our the corporate our services of financial progress. example kind fiscal agility. being model to our citizenship Citizenship and as team and members know XXXX details Report, released is our to our just consumer

journey. we're commitment the XX% is inspired that capability and pride attract they business ways team When of we second says willing our to commerce them, in customer's and consumers in deeply has grow who great we our referring we a company, our want jewelry, about matter to want channels we to that desired from our share. talk day. crossing channels to commerce, key effort to habit and be point shopping is that in how goals citizenship want to this we're to to make team by entire that We've here shopping needs ours, see our inside unlocks The shoppers stand our in buy and every embraced cross our of world. Connected and is to what a pride passion seamlessly. expectations. grow like we a take already connected emphasize. I take do this change discretionary jewelry customers been and company their when working and the respond And in one they two-thirds sustainability. Our win It's

We've drive now through location, transaction it's engagements. presence. commerce flow incentives aspect lifetime which of make this repeat first can both their to our scale Extended of on customer, with piloting is About repair an can. are fall, innovate Rewards year. six-month pilot Jared focusing for opportunities Further, We repeat revenues visits, more and is consultants and our for doubled channels scheduling jewelry than of in commerce create journey on This and Royalty at every at example. program. that ways compared scheduled repair sooner spend purchases has visibly on agreements for value, warranty connected are also spend been with revenue seamless. is return appointments, promoted nearly assisting over quarter average our increased is invest higher. They part year-over-year. drive related to our what Kay of across XX% AOV our and XX% available XX% last XX% we're to because grew service members repeat than clienteling, XX% new their Vault more continue appointments store. and purchase. online at to of volume leading delightful capability, doing our service loyalty and The services. and is of Vault a We our After is customers appointments when and more are repeat and true also in last presence. connected no jewelry that is our another in clienteling through which retailer offer scheduled appointments important conversion other We purchases

of average rolled a two step allows is steadily about to three online, recently now just each follow our weeks. time the an email. customers industry to repair to text repair process out by week Our or turnaround virtual We tracker, which below compared of

scores ability is our revenues. Our turnaround transparency process driving as customers satisfaction quick to provide well with and as

of Our for is with in commerce With we time make we space, jewelry strongest and our and retail this driver key in to significant to in strongest this The our the that the complete moat around is every continue a repair point in quality. digital last rating growth. points share overall of business. QX future improved year, NPS investment all connected widen improvement to score X

innovation. is change responding is of advantage how final to Anticipating win to continuing grow to and and at a our competitive Our stronger. is and culture capability agility Signet

our is agility health. financial by underscored Our

far enough by so we can to sustainability We at to the store we agility have demand. make to throughout manage can and customer advertising, customer strategic that data labor can We which level in in adjustments speed. to This the prices reflecting assortments as by response and consistently year This such operating out we that don't Financial while our superior in our place supported value applies of leveraging the also demand, of vendors precise repurchase throughout customer We provide program, right the our liquidity and performance. helps pools the spending spending sharply right needs, orders meet our we right the on have the staying make meet manage year. projections share the margin. scale inventory focused dynamically ensures the at of our model. have turn us stock confidence our our is market the believe the driver in is and and

Signet So, in we're shares. investing

can We shares for with And in to every beyond We million cost forces keep assortment, war working. In see are and Ukraine, patterns. of returns prolonged strong such more what's committed the QX, Signet confident respond as on roughly hope spending inflation, focused periods large can such disciplines. with business. shares of agility decreasing these agility merchandise will X control, We what team passion by changes ways in moving for What repurchased X%. that heightened I investments working as reason is and we consumer to a and our is our in you part small, we are innovation every our drive outstanding in marketing, than our accelerating at shareholders. and our to remain tailored has fundamental control,

and win capabilities demonstrates are is in that how and of a now macro advantages. The we're value these pressure environment strengths reliability Our to right test delivering advancing. the

past point. matter This widening an divisions, I'll our Signet Jewelers. around of differentiates concludes one that our and four-and-a-half settlement. are moat we and of against positions jeweler. we've years. We a close alleging the final one XX-year-long today, financial Signet our Earlier company a a promotion has emerging leader practices and transformed how nearly $XXX moat another to with is million unfair the legal pay best-in-class that announced over agreed example This Sterling and as business, growth sustainable

company this Great like buyout double-digit Signet’s and our all for recognition second $XX a leverage on Equality talent plan these equity, recently, UK benefits, commitment Place minimum operating and can on We're promotion and Index able We we've of balance in outsourced overhangs have substantially our now, I'm to a Work systematic made most a DE&I a on the earned we've past differentiator. – less and implemented Human it our engaged our through diverse Equality and over training. inspiring uncertainty wage changes four than nearly believe we certified to reflected changes sheet a We development of row, wage in the around be settled achieve $X as personal of diversity, focus leadership well, year created recognition matter, Interventions been the margin. growth purpose XX-month all retain a in inclusion reduced to Campaign trailing a we've culture Gender targets, as because line sustainability offerings. Corporate legal while Index. substantially goals annual the abundant limit our inclusion to We've us in financial the that business much as We've do obligations. company. key hiring taking times. pay We've company debt and also clearer XX-year-old Bloomberg’s our eliminating with of completed fully employee service highly approach healthy in inflation, – ratio as to provided our opportunities. financial years our sales and path improving by including driver, an to our and to have and this practices, several the strength billion our We allow inclusive truly years, all ensure well proud is shine. will an continue that to transformation. row, corporate And for a to so of love pension culture Rights equity X we to of our

growth we Our are year-over-year. among history strongest to in changes, team member today. turn we're I proud improving believe On of important note, that and very are satisfaction the over delivering. these the call drivers others, ratings company I'm that are are Signet’s many I'll the of Joan. the

messages. Thanks, like key everyone. I'd Gina. good And morning, today's reiterate to

are operating cost with can year we deliver we operating sustainable double-digit First, margin annual after believe a year. structure that

drive continue continue to innovating our shareholder our competitive Second, and advantages investing share deepen widen we continued And prioritize capabilities we'll and returns to growth. investments. to alongside third,

Now, to results. quarter’s turning the

This and as UK of our $X,XXX growth which was growth well than $XXX Today, a once are performed million in sustainable billion, high delivering transformed $X.X in we comp lockdowns, operating innovative demand and growing price all total anniversary team to Our we last structure, continue points and again bridal banners year. higher to above their as we assortments our sales at Nearly at meet points. as customers company delivered of base, in $XXX growth strongest more product by revenue with fashion. for performance a both quality included Direct. driven million from Diamonds price

customers this growth this included watermark wedding high consumer for our anniversary and to reflecting trend, delivered data-driven year's In plan Our weddings. for quarter. XX-year bands, this helped and insights for anticipate us we and bridal,

plans, price to in growth particular service with tailored gold, services, was expected fashion, and bridal return in at price higher growth growth effective we higher of strength assortments the growth scale expected engagements rates moderation points. engagement-linked points. this sales year-over-year pre-pandemic see the attachment at we with and delivered to also coupled higher Our alongside are to In levels. with as continue In enabled

to advantage margin This points luxury of XX offering we growth of quarter and million a portfolio in similar in for for in sales, lower $XXX business, Non-GAAP million in from absence within carries a reflects made last Simply impact public returned accommodated remains cost our last the services year a care Jared, more year, our to margin our reflecting saw credit James shopping Allen. variety and down year. to UK also relative investment point COVID-related SG&A to macroenvironments. range quarter sales, spaces. direct last value uniquely which enhanced Altogether, organic which We stated, abatements Direct and Non-GAAP investment banners repair a bridal XX.X% talent Diamonds the that basis customers was tax as XX% of $XXX last in the second our XXX diversified improvement to the a continued initiatives. or the It of also Banter the gross Diamond's discipline, achievable we merchandise for margin. and our of year. half agreements Notably, or of was competitive reflects basis strength in of operations. the

First million year. last quarter $XX to than is up income non-GAAP operating million more of $XXX.X

XX.X% points. hypergrowth note Importantly, We Signet’s charges expectations margin, was a we execution. operations. basis up agile were reflective here, a operating are our that our GAAP discipline laughing by and team's above margin, operating cost income impacted delivering demonstrate diligent while expanded of results not and non-GAAP These that XX ongoing

Let's turn now to sheet. the balance

resiliency sheet by the in million Our year, of reflected billion high cash up $XXX ended levels last inflow inventory, the used quarter operate for and addition of $XXX an This to $X.X We prior this activities Direct creates to quarter driven in with the compared operating year. million million Diamonds is in our anticipate, $XXX to balance of with enables base. strong our innovate of agility. and us substantially to

basis priorities. stated the cash against in with level and innovation the defend points lower product remains efficiency gives continue products with This room year. uncertainty X.X us This last further We consistent time gives deploying is and inventory above million healthy, our and XX-month this assortment. in penetration Our and flexibility us capital times provides our sell down new to turns flexibility macro us to a on for quarter the ended cash. for clearance with rolling X $XXX

digital on capabilities, including in to further First, our to potential M&A. opportunistic flexibility enhancements and act investing banner business, differentiation,

Second, to leverage total times. to repurchase completed sheet to our of million our including is result we expanded X a third, dividends functioning $XXX capital of direct target our share the to $XX to To investment repurchases. balance end, share execution And that million the shareholders And than of approximately capabilities million. ASR. this our a of and high remaining have strength $XXX by a ratio completion maintain in we return our through quarter, our summary, of repurchases $XXX of authorization team. less within million and related share In authorization

commerce have We greater have the to X to pre-pandemic margin eightfold. agility. our our we and capabilities, differentiate investments data fiscal expect that, Compared fiscal With continue than up significant connected our turn delivered times XXXX, shopping million foundation and operating and this performance to of $XXX of liquidity, more business. we of year. sustainable across end, use financial our that our to guidance. investments our improvement is on we banners, elevate to let the have implement To QX analytics XXXX profit our financial to me capital operating increased and This built

return are the $XXX to non-GAAP of as range We a continued well expectations travel. consumer of range on experiences the in resulting our billion around Within pronounced and million to billion revenues and spend we've spend $X.XX pressure million. consumer for $XXX income in a inflation, operating from view discretionary reflected our total as $X.XX reaffirming of of more full-year that,

XX.X% low planning. relating guidance degradation operating technology, the at Offsets end implied computing. in and is the into Diamonds further the these our investments as we Direct our our cost impact operating as XX.X%, margin continued high and and Additionally, mix, as saving well of reflecting structure, end. expansion well labor differentiation said, credit like agreements, Diamonds factored Banner to merchandise the indirect in to enhanced year-over-year at cloud as procurement efficient of slight to Direct includes All

non-GAAP fiscal range in earnings $XX.XX to expect the share. We per per $XX.XX of XXXX share

similar range Turning our billion million growth, range driving to the in reflecting the to a $X.XX expect out against play the spending be quarter, outlook To to experiencing. on non-GAAP $XXX the million, to while expect ability pressure level of we consumer the in our income of operating consumer to we what of second billion, we're continue to shift clear, in factors in revenue defending fiscal very that currently across $X.XX $XXX with XXXX year. the

could That such cost spending impact macroeconomic marketing, not our Our as a we to worsening outlook patterns performance. committed our business and of anticipate consumer we said, which merchandise material and tailored on factors, disciplines. impact are assortment, controlling have can, associated does what

like Before to I'd we turn reinforce to questions, our your message. core

profit QX and that and of members, heart of have members a where proven your continuing purpose performance to happy our our note, are On the we're competing that face model. how working, leveraging to to and to And I grow is are than you remain have Our organization sustainable business best challenges. to widen to our strategies demonstrating our our the positioned and who our years create compared to tenacity that market extraordinary be operating every we're win We're margin gains increased share of more macro long-term questions. thank profitably. Again, competitive team life. remain advantages the your and this bringing our And eightfold. three at value just delivered growth, in for times operating committed capabilities we'll resilient we the partnership team take ago, for drive and shareholders. To and strategies six one we in

Instructions]. [Operator

comes from Our Boruchow Fargo. question Ike first Wells from

start I to Gina, level. wanted a high at I guess very

think of both interesting gave overall category begin there of have overall margin a in color I are you give how a how confidence the the base. line COVID beneficiary of guys to more kind was could you back sustainability, the Could in be? just of you talk any lot top in I just insight jewelry you the revenue there's and think about call, guys and concern that that base the the this environment? to you on around some but revenue delivering really essentially have much

that'd think helpful. I very be

away for is to the happy performance that that a And sales you'll story. Signet not dimension what our I'm quarter. take COVID I is hope

company. And is widening. advantages quarter we executed are competitive invest for continue we in of this and successfully three have evidence believe multi-year turnaround on that to We key this a

The first portfolio is uniquely important and one banners. differentiated of our

to meet of year, strong achieve merchandise we're a assortments, we're wide when wedding with focus stimulus we and price to that's results sell/purchase demand We’re were in that this in market, and change and and a journeys. day to higher year, at the customers the so within was able spectrum point focusing trends for environment. continue able value into leaned gifting Last into able and leaning the This market, on, in dynamically customer I something who in our customers portfolio, can point time, that think are the our for us. shopping

I the of have and digital out. Secondly, sales. supply now that that cross but chain category the is was capabilities call days there's efficiency the frictionless in early I the leading shopping, that play channels move future physical seeing been we connected we've are still slow and don't think virtual question provide footprint, any the we're journeys we what to that to and that This of commerce effort is jewelry. But to a

Signet and our sustainable vendor are cost as differentiated in and at interacting have really flexible in really to scale, meet digital worked of meaningful points two-thirds and all in leveraging store a our unique our a that advantages, and customers to to ways. widen strategic virtually create business, in the on before invest and their shopping relationships We're and our is capabilities, journey competitive thing, we third with Joan purchase. that diligently emphasized then structure. they Now, remarks, customers the her And we've us both

that So, margin. in saw the these why advantages. are And a that's a did we're period results first able operating I think competitive we the sustainable, to deliver quarter. retail like It's sustainable in

Citi. Paul comes next Lejuez from from Our question

intend did you're double-digit to You that. kind a margins be over couple I I guys just I'm just I you the in consumer guess guess a the to just EBIT at of kind can of not times you either that EBIT to gives how about expecting you And looking when jewelry at consumer or maybe hear question, do any weakening answer again, performance said if can confidence deterioration what also environments. wanted the ask talking sustain I guidance over within time. double-digit just margin time. able that context see keep weaker and And your that that the of sort to of, level, what confidence category, you in high just of you some you if that a the question, gives what broad-based

double-digit an operating is confidence in created changes agility within Our our made as based on in that business, as our we've structural that business. well margin annual we've the

enabled as demand risk channels us take is And improvement through agility base. condense created it's mix react on we've marketing cost it's balance as variable customer to change SG&A important the response change teams we've our us in program. structural developed of remind zero-based you made our allows the like changes to by also another Just occupancy all small And good credit roughly ability across and deterioration what well, leverage given to consumer we as fleet analytics cost from the to and costs structural driving It's reduced quickly use supportive. you, And sheet. deliver levers, such Further, to to use-it-or-lose-it We've agreements. that rather within of well no those And as removed so the fixed store And savings of for was the our our footprint. capability transformation, XX% physical in budgeting mindset. optimization to our justified our store hours, the We to our to our we've spend, hours again, operating we've really marketing need. expectations. and this our is muscles, organization. in hunt business. we've are reduced question costs, data ability Every formats, leverage and There's our enhancement empowered largest credit as And then, are only since enabled beginning your top COVID. and us expense own labor our the deliver our our more has and of throughout spend has and, notable a our line growth. that muscles, our

and our insights flat our line structure double-digit driven growth. cost takes on shopping operating positive scale advantage top deliver of to to across channel nearly a that So, data margin

about performance, banner So, of achievable the in value see a top guidance our that from we're to think offer as giving, when up what today our occurring portfolio which is and I leveraging run you differentiated we're mentioned. in business reflecting we luxury, line we're terms

to So, and marketing assortments, consumer we our that continue our with bring can we agility flexibility delivering within base, feel this that right. operating target margin

[Operator Instructions].

of Lorraine Bank Hutchinson question from Our from next America. comes

focus to sales. some wanted to you of guidance. And the rest on growth might what pre-pandemic wanted business on improve view I in implies that of areas levels year. hear for the your The sales sales hit to acceleration the Just guidance for versus

seeing are a margin. been that about was is good And we're great of is have as we of strategies. through customers where-to-play store in services. in of service mortar. online. areas. Repair in leaning driving news really reach And for part customers our extended repair using out – it six-month these called out to clienteling and agreements, been rates their both returned We've warranty substantially checks. couple higher also our There with quarter. up some the appointment comes now key brick attachment One We're to a into good and The as results saw and booking come to to

now pleased weeks. around week an our I improvements been, typically of was down a average industry think, strength about We're services I growing for three NPS. the particularly to see versus us. for has to So, repair in And a

what can to is it's check That's process. competitive in a customers can feel at it get your stage So, And their is see the airplane, and with like repairs, on you advantage. piece. as an comfort bag when where every a it's similar Needle alongside piercing another now service great level and us trust what doing so we're cherished of repairing loyalty. we're expanded for you

we've we're in that growing non-comp So, some and brought year. we've ones got traditional this some services new that

particularly up But of and really also tiered Zales. Jared. of leaning second Kay is portfolio, in luxury. accessible The area see portions We've it substantially into highlight in we our

banners, our well price to we're so, strongly. for serve points above And range working all we're us. Across $X,XXX, of And growing able of that's wider really a customers.

And diamond vendors value just at continue time, a spend they for our so, that products our to their very make leverage have same working a time we're to the products, are discretionary do. At premium. customers sure to that's that we'll is when with at to inventory engineer affordable existing something

but we've I So, of strategies, got well a us. been have number price higher think working and particularly for services points

comes from Serna question UBS. Mauricio next from The

I you've trends some business. commentary provide ask America could throughout just North the the Maybe what want quarter. in to seen you about

second and And Should on of gross you what You Diamonds like and one Direct. a guess, kind margin gross maybe of in, quick we because expect little that? I impact QX far in and the does and seen May? what just we impact also, in in quarter? see third bit in North should in a so similar that maybe traffic, quarter talked margin a have I Like, fourth the point, but business? sales for to about March the just happened And America what implies what guess April guidance that

I'll environment. We're So some going calls, question, seeing first on in on your the take what's puts Mauricio. basically, and

our online. be kind been We remarks, available row, who And And talked ought market. data, level the stimulus. marketing into to that's points, holidays will purchasing the been saw about we a we lapse traffic, in able leveraging multiple traffic in really started have time strong we now, predict on we in-store price we very working. off high great be to assortment leaned fall to to about did a advance a of of accuracy, customers see Day and with consumer we've what looking understand occasions in of in what we're our our performance, research, will key As Valentine's higher for,

late call particularly March, that price mid at lower points. and So, to

advertising. Ukraine. the have using we've as But of and our was as With and done we the the margin costs to the that that savings our to ones in think and we in probably thing I to better been hours things The fundamentally we've customers returning is So, is variable talked expected. inflation flexibility, entertainment being operating as how item. stimulus, other worse level two but the able agility than that Joan and that been manage. cost that store able past, notable we are discretionary to also the expected structural spend manage about data improved labor a travel We've than continuing is war expected use of are

to So, able environment. be been we've think that in I agile

of year, digits. low mid-single of to we range terms down be continue versus category for the In to expect the jewelry year the last to in

we think strategic it's advantages feel is widening competitive So, that business, deliver our that slight environment, are in us in I some overall guiding the like to capabilities and that. we're growth to and allowing what

question, see within saw Just first your traffic of themes we year, Mother's mentioned values while what were below. to but just to Day above transaction average respond is Gina the last Mauricio, continuation that levels a were continue quarter, we to the

So, the the points traffic we higher are transaction that conversion price driving have. up as we're And really on do average driving value. we said,

implies guidance in the the pleased our about leveraging to driving of our carries think of margin, margin. Direct very line when breadth gross that bridal, deceleration they're performance, top and QX points, again, the guidance. you the largely the and traffic. our we've Diamonds we’re relative But, And guidance marketing QX our that So, higher a with and achieve and substantially capabilities gross included same price bridal, assortment, lower then,

operating expansion structure margin a does their However, us as well. provide

action to the for So, continue impact do expect performing. providing Diamonds it's drive guidance to our flexibility the year, with us, is to us good how giving well. mentioned then, taking – that higher pleased to very but also in as the Gina has base promotion, we're you bottom And move Direct second with cost into with a the leveraging agility if continue margin that And ability the we're formula very the line flexibility at to quarter. end, we and expansion the and business it's

I were front year. half year, are feel remind the really of prior you as of that the in year, high the just the not the in the half back comps they So, as –

with lapping that dealing some we're there's So, now as well.

Our Advisory Group. next question comes from Dana Telsey Telsey from

point? think is price price you North you in different point where demand, do the versus there higher dimensionalize America the softer point overseas? Is lower of assortment As lower percent from it about And categories versus price the look North price they? to pricing the and increases? up America How nearly average the transaction when XX% taking at you how value, environment just much you see are then, you do go And XXXX, which are how forward?

assortments see doing drive tailored is and leverage price to we're points. – continuing higher in the What our

So, we agility. have the

clearance X As down sell healthiest continue we our newness strong is What XX have and that that vendor are in work in higher assortment. relationships been and our inventories and to down the the gives innovation the base inventory our our the that points. is with bring we in years points to mentioned, very us with the to they've I fuel need to in price flexibility bring

So, that's a critical lever for us.

higher even we But anniversary year our As the the our we high see price as well and lower party up – are well serving points is bridal view this points business. across we guests. category. see price the at UK banners, that including benefit as said, assortment see in what's weddings that the important within in as we XX-year the And that across a

assortment quickly us tailor will our our demand. ability to what across to leverage move the and is to and respond consumer enable the So,

on environment portfolio a thing is competitive our I like in an advantage might add this. other one services The that financial is

We are in that fully outsourced portfolio.

have now We few added last have the years leasing, pay. private have label credit split we card, but also over we

of we So, how you it's their will, purchases. a agnostic, they in finance terms different can option choices but of customers we've that jewelry payment really offer if kind many way become

Instructions]. [Operator

Our next from Sanderson question comes Northcoast Research. from Jim

year. start great a on Congratulations the new to fiscal

consumer down how there that most at your I in either in banners context? closer risk recession of Diamonds if qualify a most are context. deterioration is economies least move demand, are if how a you could uncertainty in how drill banner if given on Maybe I'm the or Direct, through growth, that Europe, global United would macroeconomic wondering each deceleration think Just to we retailers the and feeling States or in wondering these this or the could walk especially you

one as think calls. a and number this different year is of I saying, of we're puts

is think that is most customer. this I value-seeking the the environment challenged customer in

our offering and of number our a things assortment have we said, breadth our are the that we enduring. strategies leverage scale make to for as then, customer. our And and financial that more affordable leaning we're to So, into services product of

events precious product their customers strong that that And recessionary recognize jewelry value, secondly, hold great is a category it One that periods in about one, are important material customers that. And meaningful has to perform the well and things want there because, gemstones, has of celebrate. the still the the diamonds, value. the number tended metals it's to see and

customers strategy that from be year, we're a on to getting serving as are people groom, who XX-year weddings, party of value-oriented been environment. this this us, who an in So, kinds able of clientele contact bands, entry a we're high. married in purchased increase agile like weddings anniversary those point we with jewelry, the at market have seen leaning with with and staying things. really rings bride gifts into things to wedding ring for best engagement leveraging and bands, bridal the We've can the And and we've we

invest we competitive our continue ability up of of how we like is advantage kind invest can that in thing have to move the the widen a I on competitive really to I'm our of company market-leading to that to our What This our environment wherewithal this leverage advantages. in we the to flexibility kind can allocate into environment. is other an this is continue built cost reinforce the ours and to kind an to as costs pleased about, structure, think so down we just that really environment. frankly, those

session. limit management to now hand Therefore, allocated gentlemen, team I remarks. reached for time Q&A and to have we would any like for our back Ladies the the closing

strategies you today. see creating from we we I much have are while and that I are all do, for our our advantages want to work a are driven will confidence competitive us sustainable, we you hope there's and to And win. to joining you still to very inspired results are do that our thank building more much. Thank that best-in-class store. people committed

a Have us call. today. concludes lovely ahead. for conference with you Thank day this being gentlemen, today's and Ladies

now. You disconnect may lines your