Signet Jewelers Limited

Good morning, and welcome to the Signet Jewelers First Quarter Fiscal 2027 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, J.K. Simancic, Chief Executive Officer, Joan Hilson, Chief Operating and Financial Officer. At this time, I would like to turn the conference over to Rob. Please go ahead.

Good morning. Thank you for joining us for today's 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.signatejewelers.com. With that, I'll turn the call over to JK.

Thanks, Rob. And good morning, everyone. I'd like to start the call this morning by thanking our Cigna team. Your commitment to grow brand love has delivered a great start to the year. Thank you for your hard work and let's continue building on our momentum. There are three key takeaways I'd like to leave you with today. First, we delivered another quarter of comp sales growth with effective operating performance, driving strong earnings growth. Second, we're balancing that performance with progress on our long-term transformation as we fuel this second year of Grow Brand Love. Third, we're confident in our ability to deliver the year and are raising the midpoint of our guidance for fiscal 27. We delivered comp sales growth across every category and most brands this quarter. Within that performance, we've improved on the balance between fashion AUR growth and unit performance, with unit comps improving sequentially three points to the fourth quarter. Alongside this trend, we continue to see strength in the higher-end consumer, with some of our best performance at higher price points. Collections also continue to be an additional growth driver, with Shai continuing to fuel fashion growth, and Neil Lane and Monique Olivier driving growth for Bridal. We delivered positive comps each month of the quarter and the expected savings from last year's reorganization. Adjusted operating income exceeded our guidance range through spending discipline. While still positive, the second half of the quarter slowed somewhat, but rebounded from Mother's Day and second quarter to date. With a positive performance in both Valentine's Day and Mother's Day as proof points, we're working to accelerate focus on the go-to-market priorities for our Grow Brand Love strategy. Recall, in March, I laid out Cigna's focus areas in the second year of our strategy would be brand distinction, unlocking portfolio value, and further strengthening of our operating model. The focus on brand distinction is about sharpening our four core engines, Kay, Zales, Jared, and Blue Nile. We are currently in the development and testing phase of the website redesign for Kay, Zales, and Jared to align the search, navigation, and storytelling our sites offer to today's customer expectations. Alongside this, we're actively working through skew rationalization to improve customer shopping experience while also ultimately reducing inventory levels and improving working capital. The website redesign provides additional opportunity to clearly define brand identities. We're furthest along with the redesign work at Jared and continue to expect all three to be completed in the early part of the third quarter. Websites are our largest storefronts, allowing us to reach the broadest number of both existing and new customers. Therefore, we believe this work to provide a clearer expression of each brand between both online and in-store experience is key to improving conversion ahead of this year's holiday season. In parallel, we are advancing a more modern data-driven marketing approach to strengthen each brand's relevance with its target consumer. This includes shifting towards social-first storytelling and scaled creator partnerships to better connect with younger and more diverse audiences, while also improving the efficiency of spend. Recent examples include Zales' partnership with Ashley Graham and Kay's collaboration with Christian McCaffrey, with the latter delivering more than twice our average social engagement rate. As I've said before, this isn't about spending more, but rather spending differently. At Kay, this quarter, our spend on social media was up only 1%, whereas we delivered a low double-digit growth in impressions. These early examples of our marketing transformation, similar to our website redesign efforts, represent our aim to deliver progress ahead of this year's holiday season as we focus on the right audiences, channels, and messages to drive stronger customer engagement and build brand equity. We're also making progress in unlocking portfolio value. On our previous call, we laid out actions we'd take to maximize our existing assets, including the transition of James Allen into Blue Nile and further centralization of back of house functions. We've completed those steps and doubled down on our focus in this area to our strategies surrounding natural diamonds. To that end, we've centralized sourcing for diamonds across our North American brands, which we believe will allow us to improve margins and inventory turns. That team has also taken steps to begin refining stone type, size, shape, and quality of offerings by brand. We continue to identify and implement scale benefits through sourcing, planning, and pricing, particularly as we balance our use of promotion against recent commodity highs. Further, with our scale and integrated sourcing, we see clear growth opportunities through a portfolio-level diamond strategy. We're getting clearer about the role each of our brands play across natural and lab-grown offerings. Through brand-level improvements to mix, we can strengthen our position in the more valuable segments of the natural diamond category to support both sales growth and margin without exiting the customer base that's seeking lab-grown products. Lastly, on our Grow Brand Love strategy, we continue to make progress enhancing our operating model. An important factor in those efforts is strengthening our high performing team, meaning we're organizing, developing and incentivizing talent to directly support execution. Examples of this work are organizing for better leverage across the company alongside sharper accountability. This includes the centralization and integration of back of house teams I just mentioned. Also, developing long-term focus through the build out of career development plans for high potential talent, as well as an enhanced performance review process. And finally, incentivizing through changes to how we pay, how we train, and how we recruit at the brand level to drive optimal in-store experience. Talent is a big part of how we perform while we transform. As the jewelry customer evolves, our talent model has to evolve with them. Gen Z wants to shop in store, but they've set the bar higher for what experience looks like. They want a stronger personal connection. In jewelry, the customer is often doing business with two brands, the name above the door and the name on the consultant's name tag. That connection is an increasingly important factor in customer experience. That's why aligning how we recruit, train, and reward talent to that customer mindset is so important. We believe that work is key to winning the future of jewelry shopping. This brings me to my third takeaway. Our performance year to date and the progress we've made on our strategic priorities provide us the confidence to raise the midpoint of guidance today. We've now delivered positive comps in 15 of the last 17 months and have seen recently our strongest two year stacks since pandemic stimulus spending. Topline performance has been balanced between categories. We continue to see further opportunity to improve fashion units as well as upside for AUR expansion. Said differently, while we've seen early benefits from our new strategy, we still see significant runway. We believe Grow Brand Love is setting the foundation for sustainable long-term growth with the ability to grow even during turbulent macro periods. Before I hand things over to Joan, I'd like to quickly provide an update on tariffs. The muscle we built last year to navigate the ever-changing landscape continues to bolster us this year. Our team is monitoring updates, including potential new tariffs, and will be ready to adjust as needed. With regards to refunds, Cignet is the importer of record on a small fraction of our purchases. We've already submitted claims for most of those purchases, and to date, a small amount has been approved and received. We are working with our vendors for the remainder of those refunds. At this time, it's too early to quantify the amount or timing of those potential refunds, as well as how any proceeds may be used and when it may impact our P&L. Summarizing my key takeaways today. First, we delivered another quarter of comp sales growth with effective operating performance, driving strong earnings growth. Second, we're balancing that performance with progress on our long-term transformation as we fuel this second year of Grow Brand Love. Finally, we're confident in our ability to deliver the year and are raising the midpoint of guidance for fiscal 27. With that, I'd like to turn it over to Joan.