Transcript

Well managed to rally in support of today's overall ugly tape. How about Singer Jewelers, the parent of Kay Jewelers, Zales and Jared This morning Singer reported a healthy revenue beat and an enormous earnings beat. Management raised their full year forecast. We'd like this now. You know, I've been keeping track of this one for a long time. All from speaking with former CEO Gina Drosos about she stepped down in November. We haven't had a chance to really to spend a lot of time with successor. So this is our chance. Let's take a closer look with JK Semantic. He's the new CEO of saying and I hope you don't mind. Well, what you do, I know that's probably a bit of a misleading thing. I'll I'll take it. OK, but Mr. Semantic, JK, great that you're here. We have a lot to talk about. I mean with Golding and all high all new, I thought I'd be that would be the discussion. But you have a Taylor Swift impact. That is probably the easiest way for those of you out there saying I want to Taylor Swift idea, give it to us. You know, I we're excited. I mean Taylor and Travis, their moment to celebrate love really, I think galvanizes. That that that conversation for so many Americans right now and we're excited to be a part of it because it's right on par with our purpose. And you know, ever the merchants, we've got a lot of merchandise that that really echoes or or or embodies the the spirit of the ring she's got. So let's use this metaphor to go into your different brands because it's really important for people to understand what like what's Jared different? OK, so and I figured that maybe you can show us exactly whether. Let's say I want a really expensive ring to impress my fiance. Well, so great question. And, and, and I would take your right to Jared, which really is our brand that that embodies inspired luxury. The great thing about Jared is not only do you have finished merchandise, you've also got Craftsman on site. So the ability to do custom real time is something that separates us as a large brand. And, and there's no better example of it than this ring right here. That is a ring that we've turned around custom in six days. It is a, a replica, replica or inspired by, if you will, of Taylor's ring. Now that's also $100,000 price point item with natural diamond. Travis, who can afford that? Well, I, I, I can promise her price points a little higher than that. OK, well, I can promise you I'm like drifting into the eighth round now. Now. But there's also it's themed goal here, right? More than just that. Yeah, I think, you know, obviously this is a bridal story which is gonna really resonate more to, to Jared. And T OK, as our milestone gifting, Zales positioned a little bit more for self purchase and fashion. So we're moving more of that brand into a space that's targeted on her shopping for herself. There's still a bridal component to it, but gonna be a little bit lower price point, a little bit more fashion inspired. OK, so we do need to point out the difference between milestone wedding and holiday season. But this makes it so that anyone who just thinks, wait a second, it's just a holiday gift for Valentine's Day actually right around the corner. This is it. This is every week somebody absolutely. I think I think with the with the brand, like, OK, you're really talking about a brand that reaches the broadest cross section of America. Yeah, the largest jeweler in America. And and we're there for every gift giving occasion. So certainly engagement is a big part of that. But gifts for him, gifts for her, gifts for the holiday, any of those significant milestone moments. That's that's really the bread and butter of a brand like. OK, OK, so laboratory, your predecessor came on, we were worried about. Laboratory because whether they held value or not and we're worried about gold in the impact of how it's too expensive and what those mean for the consumer and therefore for your stores. Well, let's let's talk about diamonds 1st. And I say diamonds because we do make the distinction between a natural diamond and a lab grown diamond. But we talk about them as a category because there is a market and a demand for both. And we see that when you when you get above $5000 price point that's a more natural leaning customer that's somebody that's thinking about. Holding value as an asset when you get particularly engagement rings below $2000, that's about maximum emotional value and that's where Lab really has play. OK, Maybe even more importantly for the future of LAB, Lab grown diamonds are a category extender for fashion, which is critical to our growth strategy. It really does make diamond fashion jewelry more affordable in a broader cross section of jewelry and, and, and really makes it accessible for people every day. Now gold has gotten so expensive, but I'm not sure how that cuts. I mean, anyone who bought a ring in the last 10 years must be feeling that they made a great investment. You know, I think I think gold, I mean, you know, who to thought that we'd be at these levels, right? But the nice thing about gold is customers know the value. There's a definable market and and they're willing to make that investment that that's probably the most permeable category as it relates to transferring price because people can anchor against it. I think we do feel it a little on the low end. Mm-hmm. In a business like Banter where you've got more $100 below price points, so that's a little more disposable income exposed. But in the fine jewelry business, which is really the bulk of our volume, we find that that it tends to find its level and consumers are willing to pay for it. OK. Now physical stores, I love the comeback. We've got some terrific same store online. You need a little work. Well, you know our online business is is strong when you look at those core brands, OK, Zales, Jared, we continue to drive growth and. And we feel good about the progress there are Pureplay digital brands, a little bit of a mixed bag, Blue Nile, Blue Nile, we're seeing healthy progress, seeing growth within the business and and really do feel that we're on the right track. We've got some work to do with James Allen. Admittedly, I think we've gotten a little bit out of sorts around customer strategy and we've taken some time to reset both the pricing and promo as well as our assortment architecture so that we're positioned well for the back half of the year. You're blue now. You can mortar at Short Hills malls where it is. It's a beautiful experience really. I mean, you know, blue, blue now really is a nice experience in a number of locations that that's, that's a great example. In the meantime, you're continuing the tradition was something I like, which is this buyback of 59 million shares in 2017. You're down about 40. For people who feel that they what is the benefit of being a shareholder of Signet, You make it worthwhile. Well, you know, we're, we're focused on what we can do to drive shareholder value and and. Given the the discount that we've seen in that stock price, I think it's it's a great way to return capital shareholders. We're trying to balance that against our long term growth strategy. And we really do feel like in the long run investing and driving comp sales growth as you saw in this quarter that that you know, slightest movement up in comp sales growth and we get good leverage on SG and A we're able to pull that through to operating margin. So you sure do striking that balance is important. It's the same thing you put her on a tough day. I think the stock could have really been up 20 points. That's how meaningful. This quarter was so congratulations. Thank you. I appreciate it. OK. That's JK Semantic. He's the CEO of Cigna. George SIG. And by the way, it's good to see you. No, it doesn't work like that. They have monies back into the break.