Signet Jewelers Limited

Good morning and welcome to the Signet Jewelers second quarter fiscal 2026 earnings call. Please note this event is being recorded. Joining us on the call today are Rob Ballou, Senior Vice President of Investor Relations and Capital Markets, and J.K. Szymanski, Chief Executive Officer, and Joan Hilson, Chief Operating Officer and Financial Officer. At this time, I would like to turn the conference over to Rob. Please go ahead.

Good morning. Welcome to SignetJewelers' second quarter fiscal 26 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. We urge you to read the risk factors, cautionary language, and other disclosures in our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Except as required by law, we undertake no obligation to revise or publicly update forward-looking statements in light of new information or future events. During the call, we will discuss certain non-GAAP financial measures. For further discussion of the non-GAAP financial measures, as well as the reconciliation 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.cignajewelers.com. With that, I'll turn the call over to JK.

Thanks, Rob. And good morning, everyone. before i get into prepared remarks i'd like to quickly thank our team our outperformance again this quarter is a reflection of your commitment to the customer as we continue in the early stages of our grow brand love strategy thank you for your hard work and driving consistent performance this year and let's continue the momentum into the holiday season there are three key takeaways i'd like to leave you with today first we delivered another quarter of positive same store sales and earnings ahead of our expectations. And including August, we've delivered eight consecutive months of positive cops. Second, we continue to make early progress on our grow brand love strategy through distinct merchandise, enhanced marketing and unique experiences, as well as attracting key leaders to advance our growth agenda. And third, we are fully prepared and well positioned for holiday as we enter our most critical season with momentum and clear strategic focus. Turning to the quarter, we delivered same-store sales of 2% ahead of our expectations, driven by our early prioritization of the three largest brands, Kay, Sales, and Jared, which delivered a combined same-store sales growth of approximately 5% in back-to-back quarters. At the category level, our early efforts to focus on fashion drove a 2% comp growth. Additionally, Services continues to deliver, posting a high single-digit comp growth this quarter. Fashion is important to us both due to the size of the category as well as building customer relevance across categories. We are focused on delivering fashion pieces across key price points to reach more customers. including an expanded assortment of lab-grown diamond or LGD fashion pieces. LGD fashion accelerated versus the prior quarter, growing to approximately 14% penetration of fashion sales. This continued momentum on strategic imperatives bolsters our confidence for the holiday season this year, which I'll touch more on shortly. Before that, I'd like to update our progress on Grow Brand Love go-to-market strategy via three key levers, merchandise, marketing, and customer experience. Within merchandise, we've developed distinct assortments that include new collections. At Jared, our assortment work is furthest along in its differentiation, highlighted by collections like Unspoken and Shy Creation. We are expanding our unspoken line ahead of holiday based on strong customer response to the initial assortment. This collection reflects the rarity and uniqueness of natural center stone diamond pieces at a wide range of price points. Shy Creation, another collection we're expanding this holiday, elevates the trend of layering or stacking multiple pieces to create a bigger and more styled look. At Kay, our sentimental gifting brand, we're introducing more milestone gifting pieces at key price points, as well as items at a price that are designed to serve value-oriented customers without relying on promotions. At Zales, we're focused on breadth and depth of self-purchase fashion. Our assortment offers a range of price points intended to target jewelry box essentials, as well as fueling the stacking trend. Turning to marketing, Our go-to-market strategy is now focused on maximizing performance across a more full-funnel approach. Building off the momentum we delivered in the first quarter, our three largest brands drove a more than 40% increase in impressions on a mid-single-digit increase in media spend in the second quarter. We're also adjusting where we spend. With a more than 20% increase in social media channel buys to last year, With social media now representing more than a quarter of our total marketing spent, we are bringing brand messaging to more relevant channels that deliver the best reach. We also continue to refine the messaging within each brand. For example, we launched our Love Highway campaign in Jared this quarter, moving away from the longstanding he went to Jared mentality Love Highway is a campaign that targets affluent couples navigating life's roads together. This campaign represents a new way for Jared to go to market, utilizing a popular social media influencer, Taylor Hill, in this example, to drive traffic and awareness. Highlighting the early effectiveness of this type of campaign, social media impressions for Jared this quarter were nearly double to what they were last year. At Kay, We're early into modernizing the brand. Leading these efforts will be our new Kay and Peoples brand president, Julie Yochum. Julie comes most recently from Helzberg Diamonds, where she was the president and chief brand merchant officer, and previously was the chief merchandising officer at Blue Nile. Her deep experience in the jewelry industry, both as a merchant and a brand leader, will be important to refresh Kay to a more modern experience to attract the next generation of customer and increase repeat purchases from existing customers. As part of our modernization efforts, Kay's primary marketing objective is to drive emotional connection with customers, including connection with an expanded audience, allowing the brand to reduce reliance on promotion over time. One recent example is naming Teddy Swims as chief love officer. Appealing to a broader audience, the campaign has already driven more than 2 billion impressions since launch. While these are examples of early progress in marketing, I'm excited to welcome Lisa Leitch as our new Chief Marketing Officer. Lisa previously oversaw digital and brand marketing for the Crocs footwear brands. She brings over two decades of experience in transforming and building brands. Further, she has a strong track record of digital and social marketing excellence. Lisa will lead our team to drive brand relevance through strategic partnerships and activate channel strategies to build loyalty with existing customers while attracting new ones to engage with our brands. She will also collaborate with the brand teams to develop creative content and storytelling to drive consideration while delivering the benefits of scale in marketing. The customer experience is the third lever of our go-to-market strategy and the one that will take more time to fully achieve. Our goal is to create unique experiences at each of our brands that enhance the overall omnichannel model, integrating the brand experience from digital to physical down to re-merchandising the cases. Our recent reorganization has placed store operations, including the store experience, directly under our brand leaders, giving them both the opportunity and the responsibility to create unique customer experiences over time. We're early into this process, but some recent examples of the type of changes we'll be testing and potentially implementing include store formats designed to drive self-purchase and milestone gifting, more self-directed browsing, and more interactive experiences. We're furthest along in this process at Jarrett, where we've been enhancing the shopping and checkout experience. In stores, our presentation is aligned to recent campaigns, integrating marketing alongside the collections. This delivers styling suggestions to customers and provides them clearer illustration of how pieces can complement their personal jewelry collection. Further, Jared has completely upgraded their packaging, which is often the first impression among important moments for our customers. This is a reflection of the end-to-end upgrade of brand touchpoints that are reinforcing Jared's elevated position of inspired luxury within our portfolio. Consumers are responding to this change in the shopping experience. as reflected by the fact that Jared had the best year-on-year improvement to in-store sales conversion across our portfolio this quarter. Before handing things over to Joan, I'd like to detail our thoughts around navigating the back half of the year. We believe we are well positioned to enter the holiday season with the right merchandise assortment at the right price points and the right marketing campaigns. all this to bridge the gap in holiday results last year. We believe the consumer will still seek to celebrate this holiday season, and we'll leverage our marketing and brand experience to amplify that emotion at the right time. Within fashion, we are significantly bolstering our LGD, men's, and other trending category assortments in the key gifting price points of $200 to $500, as well as higher penetration in LGD fashion across all price points. For example, we expect the number of LGD fashion pieces on hand at price points below $1,000 to be up at least threefold from last year, with even higher growth below $500. We see our customer willing to spend as long as the assortment is compelling and delivers on their expectations of value. We believe our assortment is well positioned to deliver against that backdrop. We are navigating a dynamic tariff environment to deliver for our customers and our shareholders. We are working with our vendors to land the inventory at the best time to minimize tariffs and maximize holiday availability. We're also working to reduce the impact of tariffs through discussions with suppliers to maximize domestic production, optimize country of origin, and by value engineering pieces that deliver on customer expectations at the right price points. Finally, the team is actively evaluating ways to optimize our production as we begin to place orders into the coming year. In summary today, my key takeaways are, first, we once again delivered positive same store sales and earnings ahead of our expectations with eight consecutive months of positive same-store sales through August. Second, we continue to make early progress on our Grow Brand Love strategy through distinct merchandise, enhanced marketing, and unique experiences. And third, we're confident in our ability to navigate the second half as we prepare for our most important season. With that, I'd like to turn it over to Joan.