Signet Jewelers Q1 2026 Earnings Report

Signet Jewelers EPS Results

• Actual EPS: $1.18
• Consensus EPS: $1.01
• Beat/Miss: Beat by +$0.17
• One Year Ago EPS: $1.11

Signet Jewelers Revenue Results

• Actual Revenue: $1.54 billion
• Expected Revenue: $1.52 billion
• Beat/Miss: Beat by +$21.43 million
• YoY Revenue Growth: +2.00%

Signet Jewelers Announcement Details

• Quarter: Q1 2026
• Date: 6/3/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, June 3, 2025
• Conference Call Time: 8:30AM ET

Signet 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.

Signet Jewelers Q1 2026 Earnings Call Transcript

Presentation

[Operator]

Good morning, and welcome to the Signet Jewelers First Quarter Fiscal twenty twenty six Earnings Call. Please note that this event is being recorded. Joining us today on the call are Rob Blue, Senior Vice President of Investor Relations and Capital Markets J. K. Simancic, Chief Executive Officer and Joan Hilson, Chief Financial and Operations Officer.

[Operator]

At this time, I would like to turn the conference over to Rob. Please go ahead.

[Rob Ballew, SVP - IR at Signet Jewelers]

Good morning. Welcome to Signet Jewelers' first quarter fiscal twenty twenty six 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.

[Rob Ballew, SVP - IR at Signet Jewelers]

We 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 eight 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 the non GAAP financial measures as well as reconciliation of the non GAAP financial measures to the most comparable GAAP measures, investors should review the news release we posted on our website at ir.signetjewelers.com. With that, I'll turn the call over to J. K.

[J.K. Symancyk, CEO at Signet Jewelers]

Thanks, Rob, and good morning, everyone. I'd like to open my remarks today with a thanks to our team. Your dedication is delivering results, including both same store sales and operating income growth above our guidance range. I recently had the chance to spend extended time with our top sales associates in the organization, and your passion and commitment to executing on our strategy is inspiring. Thank you for all your hard work.

[J.K. Symancyk, CEO at Signet Jewelers]

There are three key takeaways I'd like to leave you with today. First, our quick actions delivered results ahead of our first quarter expectations with both same store sales and adjusted operating income growth. Second, our Grow Brand Love strategy is in the early innings of delivering long term sustainable growth by better aligning our brands to their unique customer expectations as well as balancing assortment architecture in both bridal and fashion, all supported by a realigned organization. And third, we're confident in our ability to manage the levers under our control to execute in a dynamic macro landscape. Turning to the quarter, the actions we took in response to holiday and our early work on Grow Brand Love led to the outperformance I just mentioned with balanced growth across all categories.

[J.K. Symancyk, CEO at Signet Jewelers]

Fashion same store sales sequentially improved roughly four points to the fourth quarter, led by improvement in the key gifting price point range of $250 to $500 We also drove improvement in bridal by filling assortment gaps, particularly within our largest brands. Finally, we're gaining traction on our centralized marketing efforts with a more than 30% increase in impressions at our three largest brands on a low single digit increase in ad spend to last year. We'll cover our performance in more detail as we discuss our early progress on our Grow Brand Love strategy. You'll recall that strategy addresses three imperatives we believe will drive shareholder value. Those three are shifting to a brand mindset, growing our core and expanding into adjacent categories, while aligning our organization to support the first two imperatives.

[J.K. Symancyk, CEO at Signet Jewelers]

With that, let's jump in. First, talking through our shift to a brand mindset, we have developed a go to market strategy unique to each of our largest brands, Kay, Zales and Jared. We're aligning marketing, product assortment and experience in accordance with the right target audience for each brand. This early stage focus is the most effective way to build value for the company. For example, one point of comp growth in these three brands has the same impact to Signet as six points of growth for the remaining brands.

[J.K. Symancyk, CEO at Signet Jewelers]

Results for those three brands is already delivering a combined 4% comp sales in the first quarter with continued trend in May. Further, we delivered that sales growth while increasing AUR in both bridal and fashion while expanding merchandise margin. Our actions to build brand equity are fundamental to this work. For example, at Zales, we recently unveiled our Own It campaign. This campaign is targeting self expression at every occasion, including the most common occasion, everyday wear.

[J.K. Symancyk, CEO at Signet Jewelers]

Zales is one of the best positioned brands to target self purchase, and we're leaning into it with the launch of this campaign. The Own It campaign collections like Stellar Allure and Wembley are targeting affordable price points and relevant designs that accommodate the trend of stacking. Alongside this, the brand is testing store formats that provide reimagined jewelry shopping experiences as well as marketing across new media channels like mobile gaming and interactive social formats. At Jared, this week, we'll be launching a new fashion campaign that distinguishes itself within our portfolio as the aspirational luxury brand. This campaign will build on the product assortment and experience work that has been completed to date, while highlighting the expansion of successful collections like Unspoken to drive both customer acquisition and retention.

[J.K. Symancyk, CEO at Signet Jewelers]

Our ability to leverage branded collections allows us to reduce promotional discounting evidenced by a more than 20% reduction in discounting at Jared compared to Q1 of last year. Kay's brand position as the romantic and milestone gifting destination is one of the strongest in our portfolio. That said, we're introducing new fashion product here as well for both her and for him. One of the most important areas of focus for brand health at Kay is reducing our reliance on promotion while attracting customers with new product and refreshed experience, both digital and in store. In May, we've seen traction on these changes, driving unit and margin improvement, signaling a positive response to our actions.

[J.K. Symancyk, CEO at Signet Jewelers]

As you can see, we are driving brand distinction through a holistic go to market strategy. So while we're in early innings, we're driving progress with work still ahead of us. We expect to update you on further progress throughout the year. Moving on to the next imperative of growing our core and expanding into adjacent categories. We're already driving some important proof points here.

[J.K. Symancyk, CEO at Signet Jewelers]

We've gained traction in core product now with a healthy bridal offering at key price points and product types. This action delivered unit growth and engagements, modestly increased AUR and expanded category margins, all while managing the balance within our architecture between lab grown and natural diamonds. Our leadership position in bridal gives us the right to expand into adjacent categories like fashion, which is important to the long term and sustainable growth of Signet. Fashion's total addressable market is multiple times larger than bridal and it's an area where we can create and capture demand through assortment strategy and brand equity. We've introduced new collections within fashion leading to positive comp category performance and overall sales growth for Valentine's Day and the quarter.

[J.K. Symancyk, CEO at Signet Jewelers]

This was led by growth in the key gifting prices below $500 a marked sequential improvement while continuing to lift category AUR. Lab grown diamond or LGD fashion growth of 60% this quarter was supported by the introduction of new product, which led to notable AUR improvement. We continue to see significant runway for LGD fashion growth. Our new Wembley offering at Zales, which I referenced a moment ago, targets value and everyday wear with pieces that include metals, gemstones and lab grown diamonds. This represents one of the pathways to building customer credibility and ultimately brand equity over time.

[J.K. Symancyk, CEO at Signet Jewelers]

A critical imperative in support of our Grow Brand Love strategy is the alignment of our organization to drive growth. Our reorganization is now substantially complete. We are also actively recruiting for key leadership roles with a new Chief Marketing Officer expected to be announced later this quarter. In the past couple of months, we've integrated digital and technology into a single centralized function. These changes provide more efficient decision making alongside clearer accountability.

[J.K. Symancyk, CEO at Signet Jewelers]

Leaders across our company have carried out this reorganization, balancing the focus on creating value for tomorrow while delivering the results for today. So before handing things over to Joan, I'd also like to address tariffs. While the final outcome has yet to be determined on this topic, we've taken action and positioned ourselves for agility. Most of what Signet sells is imported and most of it is finished goods. Our international sourcing comes from a variety of countries with India representing about half of our imports and China only high single digits.

[J.K. Symancyk, CEO at Signet Jewelers]

The team has taken several actions since April to minimize potential cost impacts and safeguard against supply chain disruption, all while continuing to protect the value proposition we deliver to our customers. We're working with our vendors to optimize production and receipt schedules as well as evaluating sources of origin. We believe we will be able to move most of our Chinese manufacturing to other areas or bring in alternatives from other countries ahead of the important holiday season. We believe that we can navigate tariffs as they stand today within our full year guidance through a combination of vendor negotiations, value engineering of new and existing styles, as well as promotion and lifecycle management. The situation obviously remains fluid and we will provide updates as appropriate.

[J.K. Symancyk, CEO at Signet Jewelers]

In summary, my key takeaways today are: first, quick actions delivered results ahead of our first quarter expectations second, our Grow Brand Love strategy is in the early innings of delivering long term sustainable growth. And third, we're confident in our ability to manage the levers under our control to execute in a dynamic macro landscape. With that, I'd like to turn it over to Joan.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Thanks, JK, and good morning, everyone. The activation of our Grow Brand Love strategy is intentionally focused on driving sustainable growth with disciplined execution and accountability across the company. We have aligned our organization to our strategy and are beginning to maximize our scale advantages through centers of excellence that drive enterprise wide impact. Concentrating on our three largest brands creates the most meaningful impact on growth, most immediately through assortment architecture, promotion management, and maximizing the investments in our ecommerce channel. In parallel, we are fully engaged on longer term initiatives, including delivering on our real estate plan, expanding services offerings, and building brand equity, particularly in fashion.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Turning to the quarter, revenue was $1,500,000,000 with same store sales growth of 2.5%, with growth across every major category, including services. Further, Kay Zales and Jared delivered double digit ecommerce sales growth while expanding their sales per square foot by nearly 5% to the prior year. The leading factor in this growth is the strength of our new product offering across all categories, which delivered a sales penetration increase of new product by eight points while roughly maintaining inventory levels. These results reflected growth across all channels, including mall, off mall, and ecommerce. While Blue Nile was in line with the company's comp sales growth, James Allen created 140 basis points of pressure to comps.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

I'll touch more on that topic shortly. From a product perspective, merchandise AUR grew approximately 8%, with fashion up 10% and bridal AUR up slightly. The fashion AUR improvement was primarily driven by a 60% increase in LGD fashion sales, which carries a more than two times AUR premium to category AUR and higher gold prices. As JK mentioned, we saw also significant improvement in fashion price points between 250 to $500. In bridal, we continue to maintain a slight increase in AUR while managing assortment to meet consumer demand through our brand portfolio.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Moving on to gross margin. We delivered a rate expansion of 100 basis points to last year. This reflects our refined promotional strategy, inventory management, and leverage on fixed costs such as occupancy. Our SG and A rate was flat to last year for the quarter and was better than our expectations, driven by earlier than anticipated cost out actions from our reorganization and continued spend discipline. Adjusted operating income exceeded expectations at $70,000,000 for the quarter, up more than 20% to last year.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Adjusted EPS was a dollar 18, which was above last year on higher income and a lower share count, partially offset by a higher effective tax rate and items related to nonoperating investments, some of which we expect to recapture over the year. Turning to the balance sheet. Inventory ended the quarter at $2,000,000,000 up approximately 1%, lower than the 2% growth in revenue. The health of our inventory provides flexibility within merchandise margin, including pre tariff product, the ability to further improve life cycle management and strategic promotion management. Cash ended the quarter at $264,000,000 with total liquidity of $1,400,000,000 Our liquidity position enabled us to take advantage of the pullback in share price this year by more aggressively repurchasing shares.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

With approximately 2,300,000.0 shares repurchased year to date or over 5% of shares outstanding. We have approximately $600,000,000 of authorization remaining. As a reminder, our top priority for cash remains organic growth, followed by returning capital to shareholders and maintaining a conservative leverage ratio. In fact, Fitch recently upgraded our credit rating to investment grade. In the quarter, we've made progress on our real estate plan designed to create an experience aligned with each brand's identity.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

As a reminder, we have a four pronged strategy. First, close-up to 150 underperforming doors over the next two years. Second, we'll optimize sales transference following closures by shifting sales to remaining doors and to our ecommerce channel. Third, reposition nearly 200 healthy doors in declining venues. And lastly, continue to refresh our existing fleet.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Progress this quarter includes renovating approximately 40 stores with an additional 160 locations planned for the balance of the year. We closed 14 stores in the quarter and expect to close just under 100 stores within the fiscal year. As a reminder, these closures are concentrated in underperforming mall locations with the lease terms expiring towards the end of the year. We continue to identify opportunities to reposition high value stores and declining venues with approximately 10 planned for this year and up to 200 in the next three years. The reposition strategy and closures reflect our continued shift away from traditional mall locations as we align our footprint to support unique brand strategies.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Over the last year, we've reduced our North America mall revenue penetration to approximately 35%, and we continue to expect progress towards reducing this penetration to 30% in the next few years. We do not expect a material increase in our normal level of investments to drive this strategy forward. Now returning to our digital brands. The technical challenges are behind us, and we have since seen a consistent positive comp performance in Blue Nile. That said, James Allen continues to underperform, reflecting lower brand awareness and its current positioning in the value space for custom engagement rings.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

We are taking aggressive action to improve performance, including a refined marketing strategy and significantly higher levels of finished product to better meet the timing requirements of customers while we continue to take a deeper look at the brand. Turning to guidance. We expect total sales for the second quarter in the range of $1.47 to $1,510,000,000 with same store sales in the range of down 1.5% to up 1%. Our sales expectations for the second quarter include quarter to date performance near or above the high end of the range, reflecting continued improvement in our two year stack. This includes a positive low single digit Mother's Day performance, a trend which has continued since. We expect gross margin rate to be flat to up modestly in the second quarter and continued merchandise margin expansion and modest deleverage in SG and A. We expect adjusted operating income between $53 to $73,000,000 in the quarter. For the year, we are increasing the low end while maintaining the high end of our fiscal twenty six operating guidance.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

We now expect total sales in the range of $6,570,000,000 to $6,800,000,000 with same store sales in the range of down 2% to up 1.5%. The lower half of our guide continues to provide flexibility in the back half of the year for a measured consumer environment and reflects at the low end, a two year stack consistent with the second quarter. We continue to expect gross merchandise margin expansion for the year as our product and promotional strategies should more than offset current tariffs. We continue to expect SG and A as a percentage of sales to be slightly higher year over year at our high guide. Recall that our outlook also includes an incentive compensation reset within SG and A that is largely offset by cost savings related to this year's reorganization along with normal levels of inflation.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

One time costs related to the reorganization of 30,000,000 to $45,000,000 are expected largely in the first half of the year, and nearly all will be excluded from adjusted results. Reflective of our updated operating guidance and share repurchases to date, we are increasing our expected adjusted EPS by approximately 4% at the midpoint to a range of $7.7 to $9.38 per diluted share. We continue to expect capital expenditures of 145,000,000 to $160,000,000 Before we turn to Q and A, I'd like to personally thank our Cigna team for their commitment to our grow brand love strategy and delivering early wins, all in the spirit of our purpose, inspiring love. Operator, let's now go to questions.

[Operator]

Thank you. And ladies and gentlemen, we will now begin the question and answer session. With that, our first question comes from the line of Paul Lejuez with Citigroup.

[Paul Lejuez, Managing Director at Citi]

Curious if you could quantify your unmitigated tariff pressure? And then maybe if you could size the pieces in terms of the actions that you're taking to mitigate those pressures? And then second, curious if you could talk about pricing in both lab and natural. Curious how each of them are trending within the bridal and fashion categories and how you're thinking about that for the rest of the year. Thanks.

[J.K. Symancyk, CEO at Signet Jewelers]

Yeah, Paul. As far as tariffs are concerned, think there's really a couple of levers that we're leaning into to take advantage of that. And it's not so much about cost impact as thinking about what are the things that we need to do to continue to hit the right price points and maintain margin structure within the business. That becomes as much of an exercise in design and assortment architecture to really make sure that we can still hit those key price points. If you think about the landscape today, I mean, there's an incremental 10% tariff on India primarily.

[J.K. Symancyk, CEO at Signet Jewelers]

Obviously, that ball is moving around a little bit and that's why I think agility is really important for us as we think through it. We do have a little bit of an advantage in the sense that our business is a longer lead time business. And so means we've got to stay out in front of it, but it also means we've got a great inventory position going into it where we have the flexibility to really adjust our assortments as we hit these holiday time periods. I would also point out, I mean, it's not part of your question, but there's a couple other levers here. I mean, what's happening with commodity prices is one of them and of course part of that is gold.

[J.K. Symancyk, CEO at Signet Jewelers]

So all of it kind of goes into the mix as we think about sourcing strategy and assortment architecture. As we shared on the call, it's baked into our guide, we feel confident about how we've accounted for it based on what we know today. But those three biggest levers, would say the largest of them is really how do we think more maybe differently about assortment architecture to deliver. Second would be ultimately, country of origin sourcing opportunities and where we feel like the best place to place goods are, how we're working with our suppliers to best leverage that. And then the third is really more about looking at any sort of shifts in placement, particularly as it relates to timing.

[J.K. Symancyk, CEO at Signet Jewelers]

How do we think about timing of receipts to be able to make sure we're safeguarding the fourth quarter? From a cost standpoint, I think we've seen a pretty consistent set of actions going on, particularly as it relates to lab versus natural. Natural has stabilized of late. That's actually been reported beyond our business. It's out there publicly.

[J.K. Symancyk, CEO at Signet Jewelers]

There is some continued deflation within lab, but the phenomena I see playing out in our numbers is it's actually continued to be a source of expansion for AUR for us, partly because of how consumers have traded up in some categories. And then the expansion of lab and fashion really that lower cost is part of what enables the growth of lab as part of an entrant into a category where it would have been underpenetrated before. So that lab growth in fashion is, I would dimensionalize, totally different. It really is an accretive opportunity just because it's expanding the utilization of diamonds in the fashion space.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

The only thing I'd add on to that, Paul, is that lab from a lab diamond perspective, it's decreasing but at a slower pace than we've seen in the past. And then with respect to, you know, quantifying, what we've said is that our guidance includes our view of the impact of tariffs on our business as we know it today, and it doesn't it doesn't include anything unknown or new that may come forward. But we believe that, you know, at the low end of our guidance, we we've provided for some flexibility, related to that. And we're very pleased with, the work that the team has done around, promotional promotion management. And, you know, JK cited in his prepared remarks that Jared on its own have reduced discounting by 20%, and we've seen, you know, as the 10 q is filed, you'll see the the increase in Jared.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

And, you know, as we noted, those three the three big brands were up, you know, positive, you know, comps, very important to our business overall. So pleased with the execution of our promotional, planning and refinement of that strategy to help us, you know, work through some of these other factors that, you know, we can navigate through sourcing SJK seven through, you know, assortment architecture.

[Paul Lejuez, Managing Director at Citi]

Got it. Thank you, guys. Good luck.

[J.K. Symancyk, CEO at Signet Jewelers]

Yes. Thank you. Appreciate it. And

[Operator]

your next question comes from the line of Ike Boruchow with Wells Fargo. Please go ahead.

[Juliana Duque, Equity Research Associate at Wells Fargo]

Hi. Good morning. This is Juliana Duque on for Ike.

[Juliana Duque, Equity Research Associate at Wells Fargo]

For JK, maybe a couple of questions. If you could compare the performance of fashion and the ongoing recovery of Vital and maybe just give more on both there, specifically on any progress on SIB's market share position within each of these two? And additionally on that, you mentioned last quarter that lab presented a new customer opportunity. Have you guys seen a ramp up in that new customer in q one? And then I think that's it. Thank you.

[J.K. Symancyk, CEO at Signet Jewelers]

Okay. Yeah. Thanks, Juliana. I I I think I got it, but if I missed something, please please let me know. I so on on fashion versus bridal, mean, obviously, we we talked a lot about bridal trend.

[J.K. Symancyk, CEO at Signet Jewelers]

I I think I've been pretty clear that, while I don't necessarily know that there's a level of precision that maybe we've articulated in the past, the directional movement of it up into the right has continued, and we see that playing out in this quarter. On the fashion side, I mean, this is where I'll kind of come back to what I pointed to in the first part of it. Long lead time business also means it takes a little bit of time to adjust assortment, but we've taken very clear actions around where we felt like there were holes in assortment or maybe where we lack the depth at key price points. And Ben, I think a little more deliberate around where there's opportunities for newness that led to same store sales sequential improvement of four points and move fashion to positive, which I think is an important first step for us. But I think there's more to go.

[J.K. Symancyk, CEO at Signet Jewelers]

We've got it does take time to reset an assortment. It also takes time to really build that credibility with customers. I think doing that on a consistent basis is we certainly were doing the work to put ourselves in that position, believe that's what we'll deliver. But I'm pleased with the progress in the first quarter. And I would say the star of that show really has been our work around that sub 500 price point to make sure we were shoring up the misses in assortment that we had.

[J.K. Symancyk, CEO at Signet Jewelers]

I think that's critical for us both for every day as well as for, you know, for some of those key gifting periods. And, you know, there there are real highlights in, you know, a brand like Zales where Stellar Allure and Wembley are better positioned and building as it relates to trends like stacking in our Zales business as well, Zales Essentials, is a wider price point range, but I think really focuses on traditional and not traditional, but maybe foundational pieces that are going to be a little more timeless and really the kind of foundational elements that you know, will survive from trend to trend. I think those are really important drivers in a brand like Zales. Jared, we've talked about Unspoken a lot, which I think is great because it it it does show there is a growth opportunity as it relates to great design and a natural diamond focused set of fashion pieces. Shy Collection is another that is really driving growth.

[J.K. Symancyk, CEO at Signet Jewelers]

So there are a lot of proof points around the businesses that I think are important as we look to build, you know, customer ship overall both from an acquisition and from a retention standpoint. Those are longer measures. I don't want to call the victory one quarter in. I think when you look at those things, we're pleased with the progress and the health of that is something that will mean more over time. From a market share perspective, we really only we get our best views of market share on an annual basis just given the turn basis of this business.

[J.K. Symancyk, CEO at Signet Jewelers]

And so we really only we only talk about it then because our data is best. I think the health of our business certainly feel better about and when you look at comp sales improvement that we're driving and believe that if we do these things, we do know we shifted to growing bridal market share. I think in particular given the size of where we are in fashion, getting an annual read is going to be a heck of a lot more valuable for us. But we're moving in the right direction in that regard and happy to see both levers working within the business.

[Juliana Duque, Equity Research Associate at Wells Fargo]

Great. Thank you.

[J.K. Symancyk, CEO at Signet Jewelers]

Yeah. Thanks for the question.

[Operator]

And your next question comes from the line of Dana Telsey with Telsey Group. Please go ahead.

[Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group]

Hi. Nice to see the progress. As you think about the health of the consumer, what are you seeing in the different brands? Is it differing? And what are you seeing in terms of price point ranges?

[Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group]

Given the AUR went up to 8%, I believe, from 7% last quarter, that trend, where do you see it coming from and progressing? And then just lastly, as you think about the upcoming holiday season, marketing, new product launches, how are you thinking about that in the midst of this environment of tariffs and a potentially more pressured consumer? Thank you.

[J.K. Symancyk, CEO at Signet Jewelers]

Dana, can you repeat the first part of that question for us, if you don't mind? Think you're asking about health of consumer, but I don't want to guess at it, and you cut out for just a second.

[Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group]

No problem. It was about AUR growth increased from to 8% from 7%. Where is that AUR increases coming from? How do you see that developing going forward?

[J.K. Symancyk, CEO at Signet Jewelers]

Yeah. I mean, the you know, a AUR growth really has been across the business. And I think the fact of the matter is there's two different dynamics there. In bridal, I think it's consistent with what we've talked about. The stability of cost and price and really to the degree there is a decision that customers are making relative to natural versus LGD.

[J.K. Symancyk, CEO at Signet Jewelers]

They continue to trade up in size and LGD and that hasn't really changed. I think we've pointed to a little more predictability and stability to that, but that trend is pretty clean. On the fashion side, even though we are talking a lot about $250 to $500 price point being a key driver of that business, it may sound repetitive, but LGD is an expansion of the use case of diamonds into fashion and really does create a trade up opportunity and spend that and I hesitate to say trade up because that choice is a little more discretionary, but it really is opening up a new avenue merchandise and that's helping drive AUR for us. It's part of where we feel like there's an opportunity for growth. As far as the consumer, I think we said it, there's resiliency there.

[J.K. Symancyk, CEO at Signet Jewelers]

What we're seeing in AUR increase is more about making sure that we are aligning to the right trends and sort of matching design I think we do that. Consumers have shown the resiliency to spend on those things that they really want. And if we fall short of that, that's when I think some of the pressures around AUR or promo start to creep in. And so we continue to put that focus on the right assortment at the right time at the right value proposition for customers.

[J.K. Symancyk, CEO at Signet Jewelers]

And I think we'll continue to see these kinds of trends. The one thing I would call out though as it relates to AUR, I think we expect it to be up, but the growth of fashion at a lower price point in aggregate will moderate AUR in total for us. And so I think part of our job is to really dimensionalize that within our business just so that we're not giving a false read, so to speak, on what the health of that looks like within our business overall. As far as your second question, I think marketing overall, I mean, us, and we talked about it, cost up slightly, but with a 30% increase in impressions. That's important for us because it really does help market to a new set of customers expand our world.

[J.K. Symancyk, CEO at Signet Jewelers]

Think it's a that's going to be critical for us as we move forward just because it will expand our universe. We do think that obviously our guide sort of allows for a little bit more dynamic consumer environment and we're prepared for it. I think it'll be important for us to make sure that we are really targeted in both our spend and our audience. The interesting thing is we continue to see an opportunity to pull back on promotion. And I think that's going to be really critical to kind of cut through some of the noise for the holiday and make sure that we're much more focused on what the key drivers are, how do we hit key price points and then ultimately, how do we leverage those windows of demand and strike the right balance between a more traditional top of funnel spend, but the continued expanded reach in digital that we're seeing drive the business right now.

[Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group]

Thank you.

[J.K. Symancyk, CEO at Signet Jewelers]

Yes. Thanks for the question.

[Operator]

And your next question comes from the line of Mauricio Serna with UBS. Please go ahead.

[Mauricio Serna, Executive Director at UBS Group]

Great. Good morning, and thanks for taking my questions. I wanted to ask just on maybe on the Laparro and Diamond business. Could you remind us how much of your business is Laparro Diamond now? And like for the guide, like what's implied it to be by the end of the year in terms of penetration?

[Mauricio Serna, Executive Director at UBS Group]

And then just some commentary, just confirming some commentary earlier ahead, like quarter to date comp sales are up low single digits. And could you just like explain a little bit more that to your stack comments you talked about? Is that on comps or total sales? Just to make sure we got that right. And then lastly, on gross margin, you talked about expansion for the full year.

[Mauricio Serna, Executive Director at UBS Group]

Does that include any impact from leverage or deleverage? And just on that, like, what's the leverage point of the business at this level? Thank you.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Thanks, Mauricio. From an LGD penetration perspective, overall penetration is roughly 20%. This is up about five points to last year and in line with our strategic positioning of our assortment. And as we continue to drive this was reflective of our drive of LGD in fashion, particularly, as you know, it carries a two times higher AUR than other fashion pieces. So we think this is very important to the point on driving gross margin expansion for us as well.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

So that is the positioning on LGD. With respect to our comp, and when we think of Q2 and fiscal twenty twenty six guide, I'll address that. Quarter to date, our performance is currently near or just above the high end of our comp range for the quarter. Both our quarterly and full year guide provides for flexibility for the measured consumer environment and variability in consumer spending. On a two year stack basis, the high guide and the midpoint is a roughly two point improvement on the second quarter.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

The lower half of our guide continues to provide flexibility in the back half of the year for the measured consumer environment and reflects at the low end a two year stack consistent with the second quarter. So it's a measured view and believe that we're positioning our guidance in the right place. And just as you think about the second quarter and where we've positioned the guide, July is a tougher comp for us year over year. So we had a better performance last year than we see than we saw in the first two months of the second quarter. So we continue to really evaluate our assortment architecture and really enjoying the momentum that we're seeing in assortment that the team has put forward and the breadth of price points that we're able to offer the consumer, particularly in the backdrop of the environment today.

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Then with respect to gross margin, our gross margin performance with the 50 basis points expansion, the GMM expansion in the first quarter was 50 basis points, and we did see leverage on the positive 2.5% comp in occupancy and some other inventory related items in the quarter. And I'm very pleased with that. On a go forward basis, we believe that we can leverage GM, our gross margin, on a slightly positive comp and continue to believe we'll see expansion throughout the balance of the year at a similar level. And that's what's reflected in our guidance.

[Mauricio Serna, Executive Director at UBS Group]

Understood. Thank you so much and congratulation.

[J.K. Symancyk, CEO at Signet Jewelers]

Thanks, Mauricio.

[Operator]

And your next question comes from the line of Jim Sanderson with Northcoast Research. Please go ahead.

[Jim Sanderson, Equity Research Analyst at Northcoast Research]

Hey, thanks for the question, and congratulations on a great quarter. I wanted to lean in a little bit more to the lab grown feedback you provided. What is your outlook on your ability to achieve the higher end of guidance if there are increased tariffs coming out of India? Trying to understand your exposure to that product line and the risk of higher tariffs.

[J.K. Symancyk, CEO at Signet Jewelers]

Yeah. I I appreciate the question. I think the, you know, the the biggest probably takeaway as we think about tariffs, I mean, is first it's fluid issue. As it stands today, we've got a task force that is literally meeting across the business weekly, sometimes daily based off of what the new cycle may be to make sure that we're coordinating our actions. I do think this is maybe something I should have touched on in sort of the first round of question on tariffs.

[J.K. Symancyk, CEO at Signet Jewelers]

As the largest player in the space and with the portfolio of brands that we have, our ability to leverage our scale thoughtfully as partners is a real advantage. I think that's something that we're also trying to make sure that we're coordinating those efforts across our portfolio so that we're thinking about not only the health of our business, but the health of the consumer, ultimately, health of our partners. I I think this you know, it's a it's you know, the there's a lot of stakeholders here that that, you know, are thoughtful around how that's gonna play out. As far as as far as this issue specifically with lab, I I think it's it's less of a pressure point. You know, the the the control that, you know, that we have around those input costs.

[J.K. Symancyk, CEO at Signet Jewelers]

And when I say those input costs, even beyond tariff, size of stone, what's the design that we're building, how do we flex fabrication as well as timing. I mean, of those are levers that I think are actually a little more controllable in the space of lab. Unlike maybe some of the other commodity input costs where we can lean into production almost like a manufacturer and have a little bit more flexibility to make sure that we're engineering the right product at the right price point to really meet and drive demand within the business. And so I don't see that as at least based off set of facts we know today, don't see that as one of the more critical levers relative to any sort of risk to our guide.

[Jim Sanderson, Equity Research Analyst at Northcoast Research]

All right. Thank you for that. Just a quick follow-up on the bridal category. Were your unit growth in the quarter comparable to industry, or did you actually exceed, industry trends with respect to engagement rings?

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

We believe that you know, we have looked at, indicators, external sources, Jim, and we believe that we're gaining traction, in that space. And if if, you know, you look at in your own checks, the Google search, you know, related to engagements and and so forth is is up too. So we're pleased with, you know, what we're seeing happen in the bridal category of our business.

[Jim Sanderson, Equity Research Analyst at Northcoast Research]

Alright. And just one last follow-up, if you could. Did you indicate what share of your bridal sales were lab grown in the quarter?

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

Basically, in the mid-thirty range for us.

[Jim Sanderson, Equity Research Analyst at Northcoast Research]

Mid-thirty. And how is that compared to last year?

[Joan Hilson, Chief Financial & Operating Officer at Signet Jewelers]

It it would be up to last year, Jim. As you might recall that in our core banner sales and, Kay, particularly, we had a lower penetration at some of the lower price points in in lab for those brands. And so we've been able to improve the assortment architecture relative to that. And while doing that, you know, we were we're still able to see a bridal yeah. You are in increase, slight increase, reflecting the balance of the assortment between natural as well as lab.

[Jim Sanderson, Equity Research Analyst at Northcoast Research]

Thank you very much.

[J.K. Symancyk, CEO at Signet Jewelers]

Yeah. Thank you.

[Operator]

And we have no further questions at this time. I would like to turn it back to J. K. Semantic for closing remarks.

[J.K. Symancyk, CEO at Signet Jewelers]

Okay. Well, in closing today, I'd really like to thank our team again as well as our other key stakeholders, including our vendors, banking partners and the investment community. I'm so proud of our team for striking the right balance between good foundational strategy work and remaining focused on executing to deliver results in a dynamic environment so that we can deliver on both short and long term goals. And I've been encouraged in the extensive time I've spent in recent months alongside our strategic vendors who are committed to the Grow Brand Love strategy. I'm excited about the commitment of all of our stakeholders as we continue to build momentum on our Grow Brand Love strategy, and I thank everyone here for your time today.

[J.K. Symancyk, CEO at Signet Jewelers]

We really look forward to putting together and providing additional updates and further progress throughout the year. Thank you.

[Operator]

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.

Participants

Executives

• Rob Ballew, SVP - IR
• J.K. Symancyk, CEO
• Joan Hilson, Chief Financial & Operating Officer

Analysts

• Paul Lejuez, Managing Director at Citi
• Juliana Duque, Equity Research Associate at Wells Fargo
• Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group
• Mauricio Serna, Executive Director at UBS Group
• Jim Sanderson, Equity Research Analyst at Northcoast Research