Signet Jewelers Limited (NYSE:SIG) Q2 2024 Earnings Call Transcript

Dana Telsey: Thank you.

Operator: Thank you. We do have a follow-up question coming from Mauricio Serna from UBS. Please go ahead.

Mauricio Serna: Great. Thanks. Just wanted to follow up on — do you have any additional commentary on lab-grown diamonds. There’s still like concerns about the impact on price and profitability. I think you alluded to, it has been a benefit to you so far, but maybe what you’re seeing across the industry? Or do you have like any concerns going into the back half, a consumer that’s still very constrained on their discretionary spending and whether an increasing shift to that particular lab-grown diamonds could affect you at some point? Thanks.

Gina Drosos: Thanks, Mauricio. So we are seeing consumers gravitate increasingly to lab-created diamonds. They do offer a great value for customers, especially in the kind of macroeconomic environment that we found ourselves in. And so we’re seeing that increase. They still represent a mid-teen percentage of our mix of our diamond mix. So not incredibly significant in that sense. But through our scaled sourcing efforts and the work that we’ve done on branding, style offerings, special cuts, our LCD items actually carry both a higher margin and a higher ATV than natural diamonds on average. So we believe that our efforts to strategically brand our assortments are working and that consumers who often come in with a budget in mind are actually trading up to higher size or higher-quality lab-created diamonds, which gives them an even more beautiful look and creates great lifetime relationship potential for us.

So our teams have done a terrific job making that a higher margin and higher ATV offering for us.

Mauricio Serna: Great. Thank you so much.

Operator: Thank you. There are no further questions at this time. I’d now like to turn the call back over to Ms. Gina Drosos, CEO, for any closing remarks.

Gina Drosos: Well, thank you again for joining us today. We continue to navigate this pressured environment and are confident in our capabilities. We’re leaning in to widen our competitive advantages to drive market share growth. Thank you.

Operator: Thank you, ma’am. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.