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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 Ballew, Senior Vice President of Investor Relations and Capital Markets, J.K. Symancyk, 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 Signet Jewelers' second quarter fiscal 2026 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.signetjewelers.com. With that, I'll turn the call over to J.K.

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 in 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 comps. 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,

Thanks, J.K., and good morning, everyone. Revenue for the quarter was over $1.5 billion with comp growth of 2%, led by growth in fashion and services. Fashion delivered a 2% comp growth, driven by continued acceleration of LGD product performance, particularly at key gifting price points. Bridal comps were roughly flat, with our three largest brands delivering mid-single-digit revenue growth, led by AUR expansion on relatively flat units. Services grew over 7% in the quarter, led by higher attachment rates of extended service agreements. July was our best month of the quarter despite the toughest comparable within the quarter and was flat on a two-year stack. Merchandise AUR increased roughly 9%, with fashion up more than 12% and bridal up 4%. This is a consistent result benefiting from our bridal assortment strategy, which has generated AUR growth for the third consecutive quarter. We've seen price stabilization in both loose LGD and natural over the last six months, with natural even rebounding across carat sizes. The fashion AUR improvement reflects the strength of our LGD fashion assortment, which carries a more than three times AUR premium to other fashion pieces as well as higher gold prices. With respect to units, we saw a decline of 7%, largely in Banter, which has been more impacted by gold prices and brand-specific assortment strategy to move away from some low-price promotional items. Now moving on to gross margin. We delivered a rate expansion of 60 basis points to last year, which included gross merchandise margin expansion of 30 basis points. This reflects continued progress of our refined promotional and assortment architecture strategies, which added approximately 80 basis points of expansion. Growth in services also added roughly 20 basis points of expansion. The expansion in merchandise margin rate was partially offset by a 70 basis point negative impact from an increase in the wholesaling of loose stones and the write-down of some discontinued product based on a comprehensive assessment of items below cost. As a reminder, wholesaling of loose stones carries a lower margin but is important to our inventory turn and newness capacity. We also saw 30 basis points of gross margin leverage on fixed costs from a 2% comp. Our SG&A rate improved 50 basis points to last year, driven by reorganization cost savings and disciplined expense management. We do not expect SG&A leverage to extend to the back half of the year due to the reset of incentive comp, which is overweighted to the back half of the year, particularly in the fourth quarter. Adjusted operating income grew more than 20% to $85 million for the quarter, driven by positive same-store sales, gross margin expansion, and leverage in SG&A. Adjusted EPS was $1.61, which was 29% above last year on higher income and a lower share count, partially offset by a higher effective tax rate. Turning to the balance sheet. Inventory ended the quarter at $2 billion, nearly flat to last year, despite a more than 30% increase in gold cost. Cash ended the quarter at $281 million with total liquidity of more than $1.4 billion. Free cash flow for the quarter of more than $60 million improved by nearly $50 million over the prior year and improved by more than $15 million year to date. We repurchased approximately $32 million shares in the quarter, or nearly 0.5 million shares, bringing our year-to-date repurchases to roughly $150 million or 6% of shares outstanding. Our remaining repurchase authorization is approximately $570 million. Recall that our approach to capital allocation includes prioritizing investment in organic growth, maintaining a conservative balance sheet, and returning capital to shareholders through share repurchases and dividends. To this end, our organic investments remain on track this year to a range of $145 to $160 million in capital investments and is more heavily weighted to our real estate strategy. Before moving on, I'd like to provide an update on our digital brands. We continue to remain positive with the progress we're seeing in Blue Nile. While the second quarter includes the temporary impact from shifting to a U.S.-based marketing team, as well as pricing resets that required promotional cool down, the brand returned to positive comps in July and delivered a 25% increase in fashion revenue in the second quarter. We believe Blue Nile will further benefit from a more product assortment and further price point distinction. We continue to evaluate the positioning of James Allen within our portfolio. The brand's performance this quarter impacted total company comps by 120 basis points, a modest improvement from the first quarter. Based on testing to date, we believe the James Allen customer will respond well to faster ship options and more finished jewelry offerings in fashion basics. We expect James Allen's impact to same-store sales for the balance of the year to moderate to a range of 60 to 90 basis points. Turning to guidance, we expect total sales for the third quarter in the range of $1.34 billion to $1.38 billion with same-store sales in the range of down 1.25% to up 1.25%. We expect gross margin rate to be up modestly in the quarter, on continued merchandise margin expansion. We also expect some deleverage in SG&A in the quarter, including incentive comp resets, change management costs related to our reorganization, and shifting some marketing spend out of Q4 and back into Q3. Recall last year, we shifted some marketing out of Q3 until after the election in battleground states to avoid paying premium rates. We expect adjusted operating income between $3 and $17 million in the quarter. For the year, we are raising our guidance range reflecting results in the first half of the year, our third quarter expectations, and the current tariff landscape. We now expect total sales in the range of approximately $6.67 billion to $6.82 billion with same-store sales in the range of down 0.75% to an increase of 1.75%. The lower half of our sales guide continues to provide flexibility in the fourth quarter for a measured consumer environment. The implied two-year stack in the second half of the year is in line or slightly more conservative at the high end of guide than what we have seen over the last two months. We are raising our adjusted operating income expectation to a range of $445 to $515 million. We continue to expect gross merchandise margin expansion for the year inclusive of the impact of tariff. With regards to tariffs, India currently represents roughly half of our finished merchandise purchases and have seen the tariff increase from 10% to 50% in the last five weeks, inclusive of the incremental 25% Russian trade penalty. To minimize the penalty, we will leverage existing inventories, shift some production to other countries, evaluate pricing and promotions, as well as utilize bonded warehouses. If the penalty were to remain in effect for the balance of the year, we expect adjusted operating income in the middle to lower end of the range. Conversely, if the tariff penalty is removed in the next two months, we expect adjusted operating income in the upper half of the range. Also working to offset higher tariffs, we're in the early stages of rolling out our refined promotional strategy to other brands, reflecting the success we've seen to date at Jared. We expect SG&A as a percentage of sales to be flat or slightly higher year over year at the high end of our guidance range. Recall that our outlook also includes an incentive compensation reset within SG&A. We are raising our adjusted EPS guide today by approximately 3% at the midpoint to a range of $8.04 to $9.57 per diluted share, inclusive of share repurchase to date. Before we turn to Q&A, I'd like to thank the team for the agility in navigating the impact of tariffs all while embracing the strategic changes within our organization and delivering a consistent positive performance for our business. Operator, let's now go to questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift a handset before pressing any keys. Your first question comes from Paul Lejuez with Citibank. Your line is now open.

Hey. Thanks, guys. Can you talk about the drivers of AUR in both bridal and fashion in terms of how much is being driven by mix versus pricing actions? And then how do you expect that to change, if at all, in the second half?

Yeah. Paul, good morning. Thanks for being on the call. Really, you know, there's a couple of things going on. I'd say mix is largely the driver of it. We'll focus on fashion first. I think there's two dynamics there. When you look at the introduction of lab-grown diamonds into the mix, that really does expand the AUR. It's an expansion of the category overall, and so it's not even really trade up. It's about, you know, stretching what you know, the category of fashion looks like for us. And with that, we see continued expansion in AUR and have modeled it accordingly. From a bridal perspective, similar. Mix is really driving it. You know, whether that be on the lab side or the natural side, candidly. I mean, we've seen some stabilization in lab and natural markets of late, which I think bolsters what the bottom side has been, and that action that we've talked about, I think, on previous calls of how customers are really looking for opportunities to trade up continues to be something that we see playing out.

Got it. And then just on the tariffs, specifically India, is there, as you think about the impact on this year versus next year, how are you thinking about the potential wraparound into the '6? Would you expect to be able to mitigate the pressures if they stayed at, you know, this 50% rate? Just trying to understand how much is, you know, how much you've been benefiting from using existing inventory versus does this just kind of, you know, create an issue for you next year?

Yeah. I think, well, we not given any guidance for next year, obviously, but you know, as we look at it, mean, it's the same set of tools that we have. I think the benefit of thinking about next year is you've got a little bit more run time to be able to mitigate, particularly as you start thinking about some of the design elements at play and any of the country of origin movements that are part of our strategy, including even some onshoring of production to the U.S. Obviously, there's a lot of moving parts in the tariff landscape right now, and I'm really proud of what our team has done. We've been able to maintain guide throughout the year, and even with this incremental 25% penalty to stay within guide and also be able to pull some levers that ultimately are gonna create value for our customers and for shareholders. By hitting the right price points as we go into the holiday. We expect to be able to continue to do that. You know, Valentine's is really right around the corner. So as we're looking at holiday merchandise, we really sort of lump the two together. Beyond that, I mean, you know, what I would tell you is we're gonna continue to exercise the same set of tools. I think this is a race where the finish line has moved around quite a bit, but it's a set of muscles that we have because of our, you know, we've operated in a commodity-based environment that's had a lot of moving parts before, and we've got great partnerships with our suppliers and really leading supply chain capabilities within the industry and the balance sheet to be able to manage it. So I think we're as well-positioned as we can be, and we're also, you know, doing our best to even exercise, you know, some tactics to be able to create the flexibility if things continue to be dynamic.

Got it. Thank you. Good luck.

Yeah. Appreciate it. Thanks for the question.

Your next question comes from Lorraine Hutchinson with Bank of America. Your line is now open.

Thank you. Good morning. Can you give us an update on the bridal business? What are plans to try to get the unit velocity moving again and anything specific planned for marketing into the holiday season for bridal?

Yeah. So, we're really pleased, Lorraine, with how bridal has been performing within our three largest brands and really working through the impact that James Allen is having on the bridal business. So, overall, as we just focus on the three largest, we're seeing AUR be a strength, particularly over the last three quarters. It's remained, you know, relatively consistent. The unit growth, we see the opportunity to continue to trade up into higher carat weights. You know, J.K., we saw stabilization in, you know, retail pricing, and we've seen an increase in natural, particularly in some of the core larger carat weights, so we think that is, you know, a positive for us from an AUR perspective, and then from a unit perspective, where we've really fortified some of the lower price points within our assortment and continuing to drive that. And, you know, Kay,

Thank you. And then one of the items you mentioned on your list of mitigating factors was testing pricing. Just curious if you have any tests complete and what the customer reaction has been to price increases in either fashion or bridal?

Yeah. You know, it's been a really, you know, company-wide effort across, you know, our largest brands, and then, you know, we're rolling it out, you know, as we move the back half of the year. But Jared, as we've mentioned, you know, saw a reduction of discounting, you know, 20% to 30% over the half of the year. With that under our belt, we've been able to apply that to Kay and

Yeah. And I think that's spot on. The only thing I would add to it to maybe help dimensionalize it a little more is we've had a pretty significant reset in assortments, particularly in the fashion category. And with that level of newness, you know, we've really had the opportunity to focus on design and, you know, where we're buying, who we're buying from, leveraging those partnerships, to be able to marry design with the, you know, the sourcing capability to maintain key price points for our customers. And I think, you know, what we're finding is, they understand the commodity market. They certainly understand when gold prices move and they see value associated with that, but the ability to really adjust our assortment architecture overall and supplement with newness, you know, means we're landing new merchandise at the right price points and have been able to do that with the tariff landscape in mind so that we're well-positioned going into the holiday.

Yeah. I think the only thing I'd add to that, J.K., is that it's been a selective for existing SKUs, it's been a selective price increase. And it's been, you know, somewhat modest mid-single digits on applicable SKUs. So it's something that we've really been able to manage strategically with our promotional cadence and the depth of discounting as well. So I think all in all, it was a cohesive strategy around pricing and promotion for the business.

Thank you.

Your next question comes from Randy Konik with Jefferies. Your line is now open.

I guess, J.K., when you look at the fashion AUR, nice improvement there. Is there any kind of feel for what the headroom looks like in that category? Because you're talking about a significant amount of increase in the number of LGD fashion pieces to drive up, you know, drive up obviously at purchase activity demand and could also drive up AUR. So just any kind of feel to dimensionalize where is AUR now in fashion and what the headroom could be would be super helpful. Thanks.

Yeah. I think it's a great question, Randy. I think there's still runway there. You know, both, you know, we do want to be mindful that we're thinking about, you know, how to drive, you know, some unit growth along the way. Although, you know, today, a lot of our unit performance is tied to gold, and, you know, that tends to fluctuate as gold prices fluctuate. So as we look at lab-grown, you know, our LGD fashion, you know, proliferation, it is, you know, generally much higher price point than what our existing assortment was, and we are, you know, we're setting at, I think the number is about 14% penetration overall. And so, you know, that would tell you that there's still, you know, quite a bit of room there for us to continue to grow and expand the category. And I think, you know, how that plays out in terms of AUR itself is it's also a function of what we're doing to grow, you know, some of our base categories like gold. But, you know, at the end of the day, I think we're, you know, we still see runway there and feel like there's an opportunity for us to continue to grow market share in fashion, particularly as we expand into that side of the category.

Yeah. The only thing I'd add there is that the fashion penetration that J.K. stated is double what it was last year at this time. Yeah. So to your point, Randy, there's and J.K.'s continued growth, the other add-on would be that we don't expect a pullback in AUR at the time, citing the higher gold prices, this LGD penned growth, our lower level of promotions, and the tariffs. So we expect AUR to continue.

Great. And then, you know, when you look at the success of an improved momentum of Jared,

You want to take CapEx first, and I'll go back to Sure. So the $145 to $160 million, Randy, is, you know, as I said, was heavily weighted to real estate. I think it's, you know, as we look forward into our real estate strategy and we continue on the grow brand love from banners to brands. Our real estate strategy and in-store experience will continue to follow that strategy as a run rate. We really haven't assessed what that brand strategy would mean to our CapEx guidance like into the following year. But I wouldn't expect it to be markedly different at this time. And as you know, our capital allocation priority is to organically invest number one, in our business. And so it will follow the strategy, and, but I wouldn't see it as being, you know, materially different than where we are today.

Thank you. And I would just let me take the first part of your question, Randy. As far as the other brands are concerned, yeah. I mean, we're focused on what we do to drive improvement there. I would say, you know, we've been very clear about the focus on Kay,

Very helpful. Thank you.

Your next question comes from Ike Boruchow with Wells Fargo. Your line is now open.

Hey. This is Robert on for Ike. I was wondering if you could talk a little bit more about the 3Q guide, because it seems like it's a little below 2Q run rate. Has something softened or you're seeing some earlier demand pull forward? And also, can you talk a little bit about your holiday comp plan?

Thank you. So I'll take the 3Q guide. You know, the guide, the performance that we saw in the second quarter, you know, we saw momentum continue into the third quarter. We're pleased with that the momentum was on a positive two-year, but the positive two-year stack. So, you know, the guide itself is relatively measured, and we feel that we're pleased with how the business performed, and the guide itself just takes into account the many factors that we face in the third quarter. So happy with the top line momentum. We'll see a little bit of what we continue to see gross margin expansion with some deleverage in SG&A. So really relative to some incentive, you know, cost reset. So we are and that's the underpinning of the 3Q guide. I think as we look at the full year, we've raised our full-year guidance same-store sales with an increase in operating income, less so on the low end given the impact of tariffs and so forth, which we've discussed. But the same-store sales itself is a slight decline, if you will, in the applying guide for 4Q. And it's really all around the idea of this measured consumer environment and what and being somewhat conservative to, you know, what we've seen happen in the business just knowing the backdrop of the business. But overall, we've raised our guide reflecting what we've seen in the second our expectations for the third quarter. And then just remaining somewhat measured in the fourth quarter for holiday.

Yeah. And I think I'm sorry. Go ahead, Robert. I didn't mean to cut you off.

Oh, no. Go ahead. What were you gonna say?

No. I was just gonna say as far as holiday comp plan, I, you know, we believe we're well-positioned to maximize the holiday season. I think Joan touched on it. There's a lot of moving parts in the environment right now, but we've, you know, we've seen our customer be resilient. You know, we largely set in what is, you know, a planned and emotional purchase, and those drivers, you know, are fairly timeless, resilient, and we're seeing customers respond to that in the marketplace. I think we've also taken the right steps given, you know, maybe where we didn't deliver as strongly last year, are better positioned within key price points. You know, we called it out in the script, but LGD fashion is 3x the inventory level or ownership levels below $1,000 and even greater below $500, and we've put a particular focus on that $250 to $500 price point because that's really critical, especially as you get into those last ten days. So, you know, I think we're very well-positioned to be able to maximize that, and it's not just the ownership level, but when you look at the level of newness, that allocation of inventory is much more on trend and better positioned relative to what I think customers are looking for, and, you know, we'll be there ready for them because I think they'll still shop for the holiday. The only other thing I'd add to it is, you know, from a marketing perspective, very focused on, you know, maximizing that investment in full-funnel marketing across the year to really pulse demand during those last key time periods, and we'll continue to, you know, build upon the impression expansion that we've seen over the course of the year to best position ourselves to maximize the holiday season.

Great. Thanks. One other follow-up on that. Can you talk about how your lab business did in the second quarter? And how comps and margins are doing in it?

The lab-grown diamond business. Yeah. What we've, you know, said about fashion, Robert, is that, you know, it has a 14% penetration rate in fashion, and it's doubled what it was last year. Margins are quite nice. They're up somewhat in with respect to the lab-grown fashion performance. And, you know, frankly, we're seeing as we said in bridal, we're seeing the stabilization of pricing in lab-grown and, you know, just conversely on natural, it's actually up. So we're seeing a nice AUR movement in both of those businesses, and the penetration to an earlier point is we see runway for that to continue to grow in fashion.

Great. Benjie, I'll pass along. Yeah. Thank you.

Next question comes from Mauricio Serna with UBS. Your line is now open.

Great. Thank you for taking my questions. I'd like to maybe ask on you could elaborate on your third-quarter performance quarter to date, you know, like, how does that look versus what you were seeing at the end of in July, which you pointed was, like, your strongest month? And then you just help us to also think about, like, the compares for the third quarter. I think I recall, like, last year, like, August was actually, like, the strongest month of the quarter that if I'm correct. Just trying to understand, like, what does that imply for, like, the guidance for the sales guidance for Q3? Thank you.

Yeah. For Q3, we exited the quarter nicely as we mentioned. July was our toughest comp, and we exited it nicely on a positive comp, highest comp in the month in the quarter, in the second quarter. The comp has been fairly consistent across the last several months as we look into August. We like what we're seeing, and it's a positive comp trend for us. The only caveat I'd share with you is that we'll have some further pricing resets and cool downs that will experience in the third quarter as we prepare for the critical fourth quarter. But overall, top-line trends have held and believe that the team has done a nice job in setting architecture as we land new product throughout the quarter.

Got it. And then just one quick follow-up on guidance for, you know, the updated guidance for the year. You give us a sense of how much pressure from tariffs you're expecting in Q4 when you're thinking about, like, the high end and the low end of the guide?

Yeah. So, Mauricio, as we think about the guidance range for operating income, you know, what we've said is that if the Russian remains, we are on the Indian imports, we expect to be in the middle to lower end of our EBIT range. But if it's removed, we would expect to be in the upper half of the guidance range. So that's the dimension that we've put within our range. And so we were able to evaluate to the discussion earlier, evaluate and opportunities to offset as much of the tariff and mitigate as much of the tariff as we key on. With, you know, country of origin and, you know, pricing and promotion and so forth. And I believe that the teams have the right pricing in place for holiday. And so that's why we were able to stay within that guidance range.

And just one point of clarification. For the high end of the guide, when you say they remove, like, the Russian penalty, does this mean, like, the tariff is 25% or 10% on?

Yes. Exactly. That the reciprocal tariffs remain intact, but the penalty if that is removed, we would expect to be in the higher in the high end of the range.

I'm sorry. What would be that part? So 25%?

Yes. For India. So and with the Russian penalty, it's 50%. So we would expect to be in the upper half of the range. If that penalty would be removed.

Understood. Thank you so much.

Your next question comes from Dana Telsey with Telsey Group. Your line is now open.

Hi. Good morning, everyone, and nice to see the progress. As you think about the learnings from the fourth quarter of applied to this year, I remember last year, some of it was not having enough of the right inventory at the price points $200 to $500, obviously, a growth and lab-grown fashion diamonds. How do you think of the playbook for holiday this year? And what is marketing spend going to look like this year versus last year? Thank you.

Sure. Good morning, Dana. Thanks for the question. You know, I feel good about the holiday. You know, we've kept our eye on the ball relative to those assortment gaps from last year. And, you know, have really invested to make sure that we are covering the right price points. Lab-grown diamond fashion is a big part of that because of the on-trend nature and customer relevance of it, particularly in the fashion category. We've tripled our ownership of Lab Grown Diamond Fashion below $1,000. Have, you know, bigger increases below $500 and with particular focus on that $250 to $500 price point. You know, we've also looked at what's the, you know, within existing SKUs, what's the content of the assortment look like relative to trend? You know, it was we sold through the on-trend merchandise we had last year. We did, you know, have other merchandise, but it was dated and, you know, we've worked hard coming out of last year and into the first part of this year to be clean from an inventory perspective and then make the assortment adjustments. And, you know, depending on the brand, you're looking at, you know, as much as 40 to 50% of an assortment shift, you know, particularly within those price points. So it's not just about the depth of ownership that was a big opportunity last year, but the content within it. Is something that we've been mindful of, particularly as we've tried to web the assortment changes to the brand positioning for each. And so, you know, within Kay, that means really doubling down on milestone gifting as the big driver of assortment differentiation along with men's. With

Two quick follow-ups. J.K., is the team fully built out now? Any other holes that you're seeking to fill? And then on square footage, Joan, I think it's now down 1%. Previously, it was down 1% to flat. Anything to take away there? Thank you.

Sure. Let me take the first part of that question, Dana. Yeah. You know, I'm really pleased with the leadership team and the way that, you know, we've come together. I think the mix of experience, both Signet experience as well as industry experience and the diversity of thought that we've added to the team, just makes us stronger, and I think we're well-positioned. We do have one leadership position that we are still interviewing for. It's a technology leader for the organization. I think that's gonna be the last critical piece for us to fill. But, you know, as I alluded in the last calls, you know, that process is ongoing. We're getting, you know, we're getting close to a final decision there and just like with the addition of Julie and Lisa and the elevation of Stacy. You know, I'm confident that we'll, you know, add strength to the team, not only with the expertise in the area that we're looking for, but also that someone who's gonna be additive to culture and really be aligned with, you know, our purpose and our strategy in a way that's that can be a catalyst moving forward. So stay tuned, but we, you know, team is largely set to the point of your question more succinctly, and I'm excited about how well everybody's working together and our alignment on the strategy moving forward.

And to answer your question on square footage, it's really just refinement of our store closure plan for the balance of the year, so nothing more to take from that then, but just a refinement.

Got it. Thank you.

Ladies and gentlemen, as a reminder, should you have a question, please press 1. Your next question comes from Jim Sanderson with Northcoast Research. Your line is now open.

Thanks for the question. I wanted to go back to the fashion category for the quarter. Did Could you provide us with the unit decline was for the quarter?

Yeah. The decline in the unit performance. Sorry, J.K. Was down high single digit in the fashion category. And what you should take from that, Jim, is that the gold pricing in Banter had slowed the units there, which is typically what we see over time. Then the change in the promotional item strategy particularly in

Okay. And in the bridal category, as far as your outlook for the fiscal year, do you expect the units in bridal to remain relatively flat? Or do you anticipate some pickup or momentum heading into the back half of the year for units, not AUR?

Yeah. It's relatively flat. To, you know, on the higher end, Jim might be at, like, up a low single-digit level, but that's where that's the guidance, and it's really may remain unchanged from where we were last quarter in terms of our outlook view.

Okay. And then one follow-up question more broadly on your assortment changes. Where do you think lab-grown diamond assortment mix will land as you build up the kind of value fashion assortments going forward? I think you said it was 7% now up to 14% of sales mix. What's the right mix for the assortment you have in mind?

Yeah. Joe, I appreciate the question. We haven't really given a penetration target in part because, you know, it's a function of both numerator and denominator and, you know, we'd like to grow both. You know? So I'm probably not gonna give you a target there. I do think we're, you know, when you look at our penetration from a share perspective, it's still relatively low in fact. And when you look at the growth that's driving the category, lab-grown diamonds are really the impetus for that. And, you know, I'll underscore the point around category expansion. These are not replacements for something that exists today. You know, largely the customer that is buying something like a lab-grown diamond tennis bracelet, for example, is not a core traditionalist that is choosing between a natural diamond or a lab-grown diamond. This is really about expansion of consumption overall for much of where that growth is. So we still feel like there's runway there from a penetration standpoint. It, you know, it is I think, you know, it's gonna take a little bit of dimensionalizing and we'll probably answer this question on future calls because, you know, a lot of a lot of our fashion unit performance has been, you know, disproportionately grown, you know, through a brand like Banter at a much lower price point. And as we move in, to what is really on-trend fashion, it will, you know, it will juice AUR, if you will, but it's almost apples and oranges because you're adding to the category and I think we're gonna, you know, questions like yours in terms of how do you flip to a model is probably gonna be something we'll talk about for a little bit as we find what the baseline for this can be. But still expect a lot of growth there. And, you know, interestingly, you know, as we routinize it, particularly in those core brands of ours, we're seeing, you know, overall balance across, you know, sort of AUR and unit growth, especially in Kay and Jared.

Okay. Okay. Just one last follow-up question on marketing spending. I think this quarter, you reported spending was a little bit higher than revenue growth. Is that the trend we should look at for the back half of the year?

No. Not necessarily. I mean, you know, we haven't really changed our budget for the year. What we have done is, you know, feed it if we I mean, we're very focused on a performance standpoint. We were up, you know, we were up 4% in spend. But if, you know, if we can see that that pulls through and we're gonna grow, you know, profit based on that investment, then, you know, I think we're, you know, we've got our, you know, feet on the gas and the brake appropriately there, and I would call it neutral overall.

Alright. Thank you very much.

Yeah. Appreciate the question.

There are no further questions at this time. I will now turn the call over to J.K. Symancyk for closing remarks.

Thank you, and thank you everybody for joining us today. In closing, I'd like to again thank our team for their commitment to delivering results this quarter. We're laser-focused on holiday preparations and we look forward to sharing further results with you in December. Thank you.