Good morning and welcome to the Signet Jewelers' 4th Quarter fiscal 2024 earnings call. At this time, listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator. Please note, this event is being recorded. Joining us on the call today are Rob Ballew, Senior Vice President of Investor Relations; Gina Drosos, Chief Executive Officer; and Joan Hilson, Chief Financial, Strategy, and Services Officer. At this time, I would like to turn this conference over to Mr. Rob Ballew, Senior Vice President of Investor Relations. Please go ahead, sir. Good morning. Welcome to Signet Jewelers' 4th Quarter and fiscal 2024 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. Please refer to 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'll discuss certain non-GAAP financial measures. For further discussions of the non-GAAP financial measures, as well as reconciliation of the non-GAAP financial measure 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 Gina. Thank you, Rob, and thanks to all of you for joining us today. Before we discuss both our fiscal 2024 results and fiscal 2025 expectations, I'd like to thank our Signet team. They delivered on our expectations in a year that experienced a deep COVID-induced engagement trough and an overstocked industry that drove an elevated promotional environment for the jewelry category. You continue to inspire me. Thank you for all your hard work and dedication this year. I'd like to leave you with three key takeaways today. First, we delivered on our financial commitments this quarter with EPS above the high end of our guidance range. Second, excluding non-recurring legacy legal settlements, for the fourth year in a row, we generated over $600 million in free cash flow. This is nearly 15% of our market cap. Third, we expect same-store sales to improve throughout fiscal Year 2025 as the engagement recovery gains velocity. I'll elaborate on each of these takeaways, beginning with this quarter's results. We delivered sales of $2.5 billion this quarter, down roughly 6% to last year. As anticipated, we saw a late shopper this holiday. As value-conscious consumers were holding out to get the best deals and had one extra weekend to shop for gifts, we leveraged branding, innovation, and value engineering within our newness to provide customers a competitive value proposition, along with size trade-up options in categories like lab-created products. Our strategy resonated with our customers as we saw new items sell through at an impressive 700 basis point increase to a year ago. Our strategy, which worked all year, was also effective in the fourth quarter as we held North American average transaction value nearly flat and expanded our non-GAAP gross margin by 170 basis points to this time last year. Conversely, industry data suggests independent jewelers accelerated their deep discounts in lab-created diamonds and stepped up their discounting for natural diamonds modestly. This resulted in heavy AUR declines among independents. Our lifecycle product management continues to be a source of strength, driving inventory levels down 10% compared to the prior year. As we take markdowns on slower-moving products earlier, this also allows us to bring in relevant new items faster, which have higher margins. Continuing the trend we saw for most of fiscal 2024, jewelry retailers that catered to the low-priced fashion category outperformed. Likewise, Banter, our value-oriented fashion banner, delivered the strongest same-store sales in the U.S. this quarter, nearly flat. We also saw strong performances at Peoples in Canada and value banner H. Samuel in the U.K., both of which delivered positive same-store sales over the holidays. Offsetting the stronger performance in our core, we had challenges at our digital banners from operational and integration issues resulting in lower fulfillment, which has continued into fiscal 2025. This was caused by the integration of Blue Nile with production partners, resulting in lower conversion rates in the last six weeks of the quarter, reducing our overall North American same-store sales by one point. We are working to resolve these issues and expect to have fixes implemented later this year. We also underperformed in our Ernest Jones banner in the U.K., in part from macro challenges as well as a more negative halo impact from the November sale of our luxury watch stores. We estimate our U.S. jewelry merchandise market share for fiscal 2024 was approximately 9%, down modestly from the prior year, driven by mix shift with lower engagements as well as the relative strength in lower-priced self-purchase items where we have less penetration. We believe that we expanded our market share in the bridal category for fiscal 2024 by approximately 50 basis points, which is where we over-indexed to the industry with nearly 30% market share. The second takeaway today is that our flexible operating model is working as designed and generating significant cash fueled by continued cost savings, sourcing efforts, and inventory discipline. We continue to drive working capital efficiencies in our business, which led to a 97% free cash conversion to non-GAAP operating income. We believe our ability to drive free cash flow will continue. This allows us to invest in the growth of our business, bring in critical newness, and to return significant capital to shareholders. Last year, we returned nearly $200 million to shareholders, and we have returned nearly $1 billion to shareholders over the last three years. This morning, we announced a $200 million increase in our share repurchase authorization, bringing our total remaining availability to approximately $850 million. This is higher than the outstanding conversion market value of the LGP preferred shares. We believe share buybacks remain a very attractive use of capital for our shareholders. We also announced a 26% increase in our common dividend to $0.29 this quarter, our third consecutive year growing our dividend, which even after this increase represents less than 10% of our free cash flow in fiscal 2024. Our strong free cash flow also strengthened our balance sheet. We ended fiscal 2024 with $2.5 billion in total liquidity, which is $1 billion above our target of $1.5 billion. This gives us the dry powder to handle both our $148 million unsecured notes that mature in June as well as the convertible preferreds that mature in November while staying well within our liquidity goals. As a reminder, the convertible preferreds also represent approximately 15% of diluted common shares, which provides potential EPS upside to our fiscal 2025 guidance and our midterm goals. We are in active discussions with our board and LGP on the best way to retire the preferred shares in fiscal 2025, and we plan to give further updates as these discussions progress. The third takeaway is that we believe Signet will see sequential same-store sales improvement throughout fiscal 2025. One component is the return of engagements in the U.S. We saw industry engagement unit sales consistent with our expectations in the fourth quarter, and after a deceleration in January and early February, we saw notable improvement in the back half of February and March. The milestones that we track show that the number of couples that have experienced more than 25 of the engagement milestones has increased 500 basis points since early 2023. We believe engagements in the U.S. should increase this year between 5% and 10%. This is a clear opportunity to attract new customers. Signet provides tenured knowledge, known brands, consistent newness, and a full range of customization options. We believe the shape of this year's engagement growth will have a more material impact in the second half of the year as customers continue to plan the majority of engagements around October through February. Our customer data platform now includes 17 million customers known to be in dating relationships, and we use this data to provide personalized marketing and education to attract engagement customers. After a customer's engagement ring sale, we look to build lifelong relationships as we'll be there for birthdays, anniversaries, and milestone occasions, as well as providing the services to keep their jewelry collection protected and looking its best. We will also continue to build brand equity utilizing scale capabilities that will win new customers, including targeted personalized marketing. In fact, recently, we tested 28-day sprints of personalized marketing among Kay customers, and early results are driving a more than 10% revenue lift versus a control group. Over the last six years, we got smaller through fleet optimization to set ourselves up to get bigger. In fiscal 2025, we will invest to grow strategically in markets where we see great returns, including a hometown market strategy for K, and to improve the shopping experience for our customers within our stores through renovations. We are opening up to 30 new stores and renovating an additional 300 stores in order to drive brand relevance in our highest productivity doors. We've seen strong returns from these early investments of between 15%-25% IRR. Services, which outperformed merchandise by more than 1,000 basis points for the fourth quarter, remain a key area of growth in fiscal 2025. We look to expand services further through B2B services with independents and insurance companies, where we offer exceptional value given our scale and breadth of service offerings. We will also drive post-repair extended service agreement, or ESA, offerings to customers who did not buy an ESA initially or are seeking repairs on a piece not purchased at Signet. Following our nearly 350 basis points increase in fiscal 2024, we continue to see the opportunity to further improve attachment rates in fiscal 2025, both in-store and online. Now I'll briefly comment on results so far for fiscal 2025. Similar to Christmas, Valentine's Day shoppers were late and highly value motivated. As a result, January and early February trend was quite soft, with comp sales down mid-teens. Since early February, trends have notably improved, with same-store sales down mid- to high-single digits. The core business continues to outperform, with digital banners' operational issues dragging comps down. We believe consumers will remain focused on value this year as they make important trade-offs in their budgets, and our ability to bring newness and innovation will be a differentiator. To summarize my comments today, I'd like to reiterate our three key takeaways. First, we delivered on our commitments again this quarter, including non-GAAP EPS above our high guide. Second, we generated over $600 million in pro forma free cash flow for the fourth year in a row. Our flywheel operating model is driving strong free cash conversions, which we're using to return capital to shareholders, improve our balance sheet, and invest in our business to drive growth. And third, we believe we will see same-store sales improvement through fiscal 2025, with same-store sales turning positive during the back half of the year in our core banners, driven by engagement recovery, strengthened brand equities, product newness, and new customer acquisition, all while maintaining cost discipline. I'll now turn the call over to Joan. Thanks, Gina, and good morning, everyone. Revenue for the quarter was within our expectations at $2.5 billion, down 6% compared to the prior year. Same-store sales were down 9.6% but improved to the third quarter. This reflects acceleration in bridal and fashion categories. While December was our best same-store sales performance of the quarter, January was somewhat below expectations, driven in part by integration issues in our digital banners. Our engagement performance improved several hundred basis points compared to the third quarter, and our overall incidence of engagements were in line with our expectations, excluding digital banners. This quarter included a 53rd week, which generated $103 million in sales and was largely the difference between total sales and same-store sales decline. Our North America ATV for the quarter declined 60 basis points to last year, and transactions were down roughly 7%. The relatively flat performance in ATV is notable compared to the more significant declines in AUR for independent jewelers due to their deep discounting. Our stable AUR during the quarter was driven by our assortment strategy, which provided our customers with several options to trade up through innovation and value engineering. Services grew 5% to last year, driven by an attachment rate that increased by nearly 350 basis points, reflecting newly implemented offerings like post-repair ESAs as well as point-of-sale prompting for our jewelry consultants. We delivered gross margin of $1.1 billion this quarter, or over 43% of sales, with non-GAAP gross margins up 170 basis points to the prior year. Merchandise margin also grew by 140 basis points on a non-GAAP basis, led by services and an increased mix in newness and LCD merchandise. Turning to SG&A, our non-GAAP expense of $670 million reflects 26.8% of sales, 70 basis points higher than last year, as we delivered somewhat against fixed costs. However, this reflects meaningful improvement to prior quarters, with cost savings near the high end of our expectations. Our non-GAAP operating income was $410 million for the quarter, or 16.4% of sales, delivering $5 million more than the prior year on lower revenue. Non-GAAP EPS for the quarter was $6.73 per diluted share, up 22% from the prior year on higher operating income, higher net interest income, and a lower effective tax rate. For the full year, we delivered $7.2 billion in sales, reflecting an 11.6% decline in same-store sales with gross margin of $2.8 billion, or more than 39% of sales. This is up 30 basis points from fiscal 2023 on a non-GAAP basis, reflecting a merchandise margin increase of 110 basis points, partially offset by deleveraging of fixed costs on a lower sales base. Non-GAAP SG&A for the year of $2.2 billion, or 30.4% of sales, was up to last year, largely due to the fixed cost portion of labor. Non-GAAP operating income for the year was $643 million and resulted in a $10.37 non-GAAP diluted earnings per share, with EPS above the high end of our expectations. Our GAAP EPS of $15.01 was positively impacted by a $263 million non-recurring benefit, or $4.88 per share, from the impact of new tax legislation in Bermuda, which resulted in the recognition of a deferred tax asset in Q4. Due to this new legislation, beginning in fiscal 2026, or a year from now, our effective tax rate on income in Bermuda will increase to a minimum of 15%, which is expected to increase our overall effective tax rate nearly 4%. This $263 million benefit also provides an offsetting impact on cash taxes owed over the next 10 years, or roughly $26 million a year. This means our cash tax rate will be well below our effective tax rate. Our ending inventory of $1.9 billion was down 10% to the prior year, a larger reduction than year-over-year sales, and down more than $600 million compared to pre-pandemic excluding acquisitions. And including memo inventory, it was down more than $1 billion in our core businesses. We continue to focus on lifecycle management, taking markdowns earlier when merchandise performance does not meet our turn expectations, in order to capture more margin before SKUs reach clearance. We continue to see opportunity in optimizing our inventory, particularly as we lean into AI to drive assortments at the store level. These efficiencies translate directly to cash flow and higher margins. We ended the year with inventory turns of 1.4 x in line with the prior year. Turning to leverage, gross debt to Adjusted EBITDA was 2.3 x, with net debt to Adjusted EBITDA of negative 0.7 x, as our cash of $1.4 billion exceeded approximately $800 million of outstanding debt. We continue to grow confidence in our ability to generate free cash flow each year, driven by our flexible operating model and continued efficiencies. As we look forward into the year and the maturities ahead of us, we are reducing our gross debt to Adjusted EBITDA leverage target down by 0.25 turns to be at or below 2.5 x. We are introducing a debt to Adjusted EBITDA target of at or below 1.25 x, which would imply net debt to Adjusted EBITDA below 0.5 x at the end of fiscal 2025. This year, our unsecured notes mature in June, and our convertible preferred shares mature in November. Our fortress balance sheet and strong liquidity and cash conversion allow us to address these maturities in full, and further debt issuances would be done opportunistically. Turning to real estate, last year we closed 114 locations, mostly comprised of lower-performing mall locations and UK stores. We ended the year with roughly 2,700 locations across our banners, down more than 500 stores from fiscal 2020. Our ending store count also reflects the sale in November of 15 prestige watch locations in the U.K. for an accretive multiple to continue our focus on our core higher margin jewelry business, as well as 2 additional locations subsequent to that transaction, including 1 in February. Based on the strong performances we've seen up tiering Jared, Diamonds Direct new stores, and Kay new and remodeled stores, we plan to increase our investments in our fleet. In total, we expect approximately $160-$180 million in capital expenditures this year, including 20-30 new stores and renovating approximately 300 locations, including 200 Kay stores, 50 Jared locations, and 6 Diamonds Direct stores to enhance the customer experience. We also expect to invest $40-$50 million in digital and technology in support of our consumer and team member experiences. Turning to guidance, looking to the first quarter, we expect total sales in the range of $1.47-$1.53 billion, with same-store sales down between 11%-7%, including a two-point negative impact from our digital banner issues mentioned earlier. As a result of modest fleet optimization and luxury watch store sales, returning to a 52-week fiscal year, and as a generally popular investor request, we are reintroducing same-store sales guidance. Early Valentine's Day shopping was down mid-teens, consistent with January performance. Since Valentine's Day, same-store sales have improved notably, up 2-3 points to the fourth quarter, and a further point when excluding our digital banners. We forecast that the number of engagements in the US will be down low- to mid-single digits in the first quarter of the year. We expect non-GAAP operating income between $40-$60 million. We are also introducing adjusted EBITDA guidance this year, upon request from investors. In the first quarter, we expect adjusted EBITDA between $87-$107 million. We expect flat to modest improvement in gross margins in the first quarter, while deleveraging in SG&A on lower same-store sales. For the year, we expect fiscal 2025 total sales in the range of $6.66-$7.02 billion. We expect a range of down 4.5% to up 0.5% for same-store sales this year, including a 1.5%-2% drag from our digital banners and an approximately -0.5% impact from the negative halo of our Ernest Jones banner in the U.K. We believe our core banners will continue to outperform, with same-store sales approximately flat at the midpoint for the year. We expect to resolve the issues in our digital banners in the second half of the year, but it is not reflected as such in guidance. These issues are solely related to the James Allen and Blue Nile integration and are not tied to, nor are they impacting, the e-commerce channels of our core banners, which are performing well. We believe consumers will continue to be impacted by the elevated inflation over the last two years in fiscal 2025. Consumers continue to focus on value in the current environment, and our new items will be focused on price points that appeal to consumers across a variety of demographics. We also anticipate continued elevator promotions among independent jewelers this year. We expect engagement activity to be up 5%-10% for the U.S. in fiscal 2025. As such, we expect our same-store sales to improve as the year progresses. Our guidance range assumes a fairly similar three-year same-store sales stack in Q1 and for the full year. We are also cycling off a 53rd week that was over $100 million, $75 million in the U.K. from selling 17 prestige watch locations and closing up to 30 Ernest Jones locations, and another $50 million from total closures in FY 2024 and fiscal 2025. Net new store openings, we expect our overall net square footage to be flat or to decline slightly. The closures of the Ernest Jones locations in the U.K. are part of our efforts to right-size that banner and shift sales to digital and other locations. We are also streamlining our overhead in the U.K. and expect to achieve margins in line with the rest of the company within three years. fiscal 2025 non-GAAP operating income is expected to be in the range of $590-$675 million, with adjusted EBITDA between $780-$865 million, with modest non-GAAP operating margin expansion. This reflects cost savings of $150-$180 million this year from a new three-year initiative to drive $350 million in costs out of the system, leveraging AI, streamlining non-customer-facing expenses, in addition to increasing sourcing efficiencies. We expect cost savings to be more impactful in the second half of the year as we see the benefit from sourcing savings and inventory churn. We expect modest deleverage in SG&A from the reset of incentive compensation and investments in e-commerce channels and customer and team member experiences offset by gross margin expansion. Full-year non-GAAP diluted EPS is expected to be in the range of $9.08-$10.48. Importantly, our EPS estimates for the year assume the dilution of the preferred shares for the entire fiscal year. As I close my comments today, I want to thank our talented Signet team members. Their passion for our millions of new and loyal customers and their dedication to ongoing consumer-inspired innovation results in an unrivaled experience in our industry. Our team is why we have excellent Net Promoter Scores, both online and in our stores. I'll now open it up for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your telephone keypad. You will hear a three-tone prompt acknowledging your request, and your questions will be polled in the order they are received. Should you wish to decline from the polling process, please press the star followed by the number two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Paul Lejuez from Citigroup. Your line is open. Hey, everyone. Brandon Cheatham on for Paul. I wanted to dig in on what you're seeing on the engagement side to update your forecast. Now you're looking for a 5%-10% increase for the year versus what I think was a 10% increase previously. I just wonder, can you walk us through the progression as the year continues, and does that assume an acceleration in 4Q? Does 4Q end up higher than 10% to get there? Hi, Brandon. Thanks for your questions. So we're seeing engagements recover as we expected they would. We saw the trough happen in Q4, and we're expecting, as you'll recall, a gradual and incremental improvement in engagement trends over the next three years. So it takes a bit to recover. We've also continued to see progress on the 45 milestones that we track. We have statistically significant data that shows us that once a couple has experienced a certain number of the proprietary milestones that we've identified, and that number being 25, they're much more likely, statistically significantly likely, in fact, to get engaged. And that's up 500 basis points versus just a year ago. So we expect engagements to strengthen as fiscal Year 2025 progresses. We think it's 5% on the low side of our guide, 10% on the high side of our guide for the fiscal year, but that will naturally be backweighted. That has to do with both the gradual recovery as well as the seasonality of engagements. More couples tend to get engaged in the October to February time frame. It will likely be more backweighted. Got it. Thanks for that. I was wondering, could you quantify the ticket and transactions that you saw, particularly in the first half of February, and where those metrics are now? Did you see pressure in any particular segment, bridal or fashion? Is there incremental pressure that you weren't expecting on the high end? So I think if we go back to Q4, and we don't quantify all the tickets, but one of the things that we were proud of how our team executed in the fourth quarter was maintaining a stable average transaction value despite significant discounting from independent jewelers, especially on lab-created. That was in bridal and in fashion. So that did put some pressure on average transaction value. But because we brought so much newness, which sold through so well, and we value engineer that newness to provide an exceptional value, we were able to hold. Those trends of independent deep discounting have pretty much continued into the first quarter, I would say. And I think what we saw in the jewelry category in January and early February was pretty similar to the rest of retail. It was a low traffic time and a challenged consumer. Got it. I appreciate it. Thanks and good luck. Thank you. Your next question comes from the line of Lorraine Hutchinson from Bank of America. Your line is open. Thanks. Good morning. I just wanted to follow up on the engagement discussion. You did talk about unit sales consistent with expectations for engagement in the fourth quarter. Was there some softness in pricing versus your expectations? And then how has that competitive landscape included in the guidance for this coming year? So the reason, hey, Lorraine. The reason that we talk about units is because we're thinking about the number of couples getting engaged. And that, like I said, has been recovering very consistently to what we thought. Similar to my answer to Brandon, we have seen some pressure on average transaction value, both in bridal and in fashion, particularly driven by deep discounting among independent jewelers. You'll remember they didn't predict the engagement trough as well as we did, and so were over-inventoried all year. They were working through that inventory still in the fourth quarter, and so a lot of pressure on moving that through. I think that while we have seen their continued discounting into the first quarter, I would anticipate that the inventories are recovering somewhat, and so that could be a help. I also think that consumers are becoming more aware that lab-created diamond prices are falling. And so while they might be great for fashion jewelry, there's something very, very rare and so individual about a natural diamond. And so we think that that is a potential tailwind for natural diamonds in the year ahead. And then, can you talk give us some of your insights on the competitive landscape on the non-bridal business and what your expectations are for that this year? Sure. So the part of the category overall that has been performing the best is low-priced fashion jewelry. So Banter, our value banner, competes in that space. H. Samuel in the U.K. competes in that space. But overall, we have reasonably low exposure to very low-priced fashion jewelry. The place where we think we have an opportunity in particular is in gold, where we have some sourcing advantages and direct partnerships with factories to really value engineer jewelry. Also, bringing lab-created into fashion proved to be a good strategy for us over the holidays. And our newness was well-positioned to trade customers up into price points that we do uniquely carry over the holidays. We had a 700 basis point improvement in how our new items sold through over holiday by pursuing that strategy. I would just add on to that. The idea of newness and the green shoots that we saw on holiday, particularly in fashion and in our new bridal offerings, our intention and included within the guidance that we've given for FY25 is a higher complement of newness based on the run rate and testing that we saw in the holiday selling period, Lorraine. Thank you. Your next question comes from the line of Ike Boruchow from Wells Fargo. Your line is open. Hey. Good morning, everyone. A couple of questions, maybe for Joan. Well, first of all, on the gross margin line, I think you commented it should be a lot to slightly up in 1Q. On that kind of negative comp, that's pretty impressive. Can you kind of just walk us through the headwinds, the moving pieces on gross in the first quarter, and how you're able to kind of sustain that? Yeah. Thanks for the question, Ike. So our first quarter continues with the sourcing savings and sourcing efficiencies that we've been able to work with our vendors and work with our sourcing team to provide. And what's really important in the margin equation is newness. And so we are bringing in more newness, as I just mentioned, and we expect throughout the year that the margin improvement will be more back half weighted as part of our cost savings program because the newness coming in and the incremental newness will turn, and we'll see more of that happen throughout the year, largely related to the back half. So sourcing is a big opportunity. I would also say our disciplined inventory management, our teams have done an amazing job of being nimble and synchronizing our inventory position to demand and trends. We are in a position where we are not over-inventoried, particularly in clearance or sell down. We're able to manage a leaner markdown earlier before product goes to clearance. Inventory management is another key component. While we face the promotional discounting that we're seeing in the industry, we've also been able to target pricing within specific areas within our product base. It's not a broad-based discounting or promotional posture that we have. Those are the levers that we're using to continue to drive gross margin as an opportunity for us in Q1 as well as fiscal 2025. And then Joan, you had mentioned you expect margin improvement to be more two-way weighted. Is that just operating margin? Are you saying that gross margins could also improve year-over-year as you move into the back half? Gross margin. Yeah, gross margin will improve. The sourcing savings as we roll or turn our inventory last year was 1.4 x. And sourcing newness comes in, and the sales through largely will occur more back half on the new items. Got it. Then just to stick with the gross margin, I think your total revenue plan is down 2-7. Can you tell us at just a higher level, what is your services expectation? I assume you expect to outgrow that number, but is there a number you could share with us for the year that you're planning? Not specifically on services, but what I would tell you is we continue to implement new tools and opportunities within the services business. We mentioned a couple on the call that are wrap-around opportunities. So POS prompts for our jewelry consultants are rolled out to all of our banners, as well as post-repair ESA, which is something that we've been ramping up and we see traction. Our stores team has done a great job in training and really understanding the benefit to our customer for those services as a one-stop for all of their jewelry needs. So we continue to evolve that. Our attachment rates, as another note on that to consider, Ike, is attachment rates to bridal are much higher than fashion. They're almost double. With the return to engagements and as we see that scale up and progress throughout the year, we would expect the services business to respond similarly as well. A lot of great opportunity in services for us. Okay. It sounds like services will outperform, but you're not going to quantify the exact amount that you're planning it at. No. We won't quantify the exact, but we expect it to continue to grow. It did outperform merchandise by 1,000 basis points in the fourth quarter. Great point. Understood. Sorry, last question. Just on the tax rate comment, Joan, that you went through, you talked about the step up by 3 or 4 points. Is that incorporated in this new 19%-20% that you have this year, or are you saying that we should be expecting 23%-24% going forward in the out years? Thank you for the clarification, Ike. The impact for the new tax legislation for Bermuda will affect FY26, not FY25. There is no impact in FY25. We recorded the deferred tax benefit at the end of the year, and it will affect tax rate a year from now. And associated with that is a cash tax benefit that will occur gradually over the next 10 years. Got it. So 2023, 2024 is the go-forward based on what you said earlier, right? FY26. Correct. It starts at 23, 24. Yes. Yeah. Perfect. Thank you so much. Bye-bye. Yep. Thank you. Your next question comes from the line of Mauricio Serna from UBS. Your line is open. Hi. Good morning. Thanks for taking my questions. I guess just wanted to get a sense of what are you thinking about the total jewelry industry growth, considering also fashion and the non-engagement part of bridal? How are you thinking about the industry growth for the year? And then just also, maybe you could provide a little bit more details on the digital part of the business. Could you elaborate a little bit more on what are the issues happening in there? Just if I recall, I think you were already expecting some benefits in Q4 of the integration from both banners. And then lastly, just based on the commentary that you provided for Valentine's and how things have trended since then, is there a way to get a sense of what are the quarter-to-date comps? Thank you. Hi, Mauricio. So I'll start on your questions, and then Joan can chime in on that. So in terms of what we're expecting from the category in this year ahead, we're expecting the jewelry category to be down mid-single digits. We'd expect to be able to grow share in that environment, particularly in bridal. We're seeing consumers continue to be value-oriented. That's how they were at Q4 and Valentine's Day. A late shopper, highly focused on value. Our strategy that worked in Q4 was first to leverage our industry-leading banner portfolio to appeal to customers across all price points. Second, to bring more newness and innovation. In a tougher economy, customers still get excited by things they haven't seen before, by innovative new items. And we value engineer that newness to offer an especially good value without the level of heavy discounting that we saw in the category. Finally, we believe we're positioned to win as engagements return because of our tenured store teams, our well-known brands. Trust is a more important factor in the engagement ring purchase. We're using proprietary data. I mentioned in my remarks that our customer data platform today includes 17 million people who are in dating relationships. We would expect only 2.5 million or so of those to get engaged in the next year. We have more than enough people in our proprietary database to really be talking to those pre-engagement customers in advance. That's kind of what we see coming in the market and why we think we're positioned to perform better than the industry in this environment. Your second question was about digital banners. The first thing I want to start with is just emphasizing that the issues that we saw were not to do with our core e-commerce business. It was Blue Nile and James Allen as a result of the integration. Our core e-com business is performing well, and the investments that we've put in place have led us to hit an all-time high in Net Promoter Score in digital. What we saw with James Allen and Blue Nile were some operational issues related to the replatforming of the business. Frankly, we thought we had it all wired and that the pipes were connected well, but they weren't. And we had, unfortunately, some problems integrating Blue Nile with its production partners, which caused us to see a dip in conversion with much longer fulfillment times. So we've got the team very focused on getting this fixed. We believe that we are on a very good path to get these issues resolved. We expect the fixes in place later during the year, although our guidance does not reflect significant improvement in the digital banners. In fact, our fiscal year guidance assumes a 2-point comp drag in total coming from the digital banners. Then, Mauricio, with respect to your comp question, as we mentioned, early V-Day or Valentine's Day was down mid-teens. Post-Valentine's Day, we're seeing a down mid- to high single-digit comp. And if it helps to put the year in context for you, our first half of FY25, same-store sales range, should be down high single- to mid-single digits, followed by a second half of down slightly to low single-digit growth. That's how to put the year in context. Great. Very helpful. Very lastly, a follow-up on the cost savings initiative. Any way you can break it down into the three big buckets that you mentioned on the sourcing, the AI, and other non-customer-facing expenses? Thank you. Yeah. So as we think about the 350, we expect or anticipate $150 million-$180 million this year in cost savings. The sourcing savings is roughly half of that, I would say, for this year and would look for that to continue into the out years with that sort of balance. And then the AI and non-customer-facing expenses would be the other half of that savings. And again, as I mentioned, the sourcing savings would be more back half weighted. Very helpful. Thank you very much. Your next question comes from the line of Jim Sanderson from North Coast Research. Your line is open. Hey, good morning. I wanted to talk a little bit more about the 300 renovations you're planning this year. That's, I think, about 10% of your store fleet. Can you outline the benefits you would expect this year or if this is a later year benefit, and any feedback on what you think the improvement in store sales volumes would be from those remodels? Yeah. Thanks, Jim. We're excited about this program. We've been able to test within our Kay stores, which I mentioned were roughly 200 stores and consistent with a hometown strategy for K. The renovations have delivered a mid-single digit lift for us, and we call them renovation lights, which means from a capital perspective, it's very efficient. And what they include are new carpet, LED lighting, really supporting the sustainability and environment strategies that we have and goals. We'll take care of expanding services, which, again, as we talked with Ike, is a significant investment for us overall and drives top-line growth. And then we'll affect the cases, the lighting in cases, and really upgrade the presence of the shopping environment for our jewelry consultants as well as our customers. And then we'll include digital displays as well as basic loss prevention updates. So as you can see, it's capital- light, but it's delivering top-line growth for us. There's a store in Texas that we've done this work on, and we're really pleased with the response from our store team as well as the customer. I would also note the Jared stores. I mentioned this, that we're up-tiering Jared, the assortment. We've tested different layouts and different design within the Jared banner. We're investing in 50 stores, and we're very excited about that. That has an overall lift that's an excess of 10% on the top line. The IRR on it is 18%-22%. And we feel that it better supports the tiering up of the assortment, and we're seeing a very nice sales growth on newness in that assortment too. And it's a holistic upgrade for us because we're also increasing inventory towards the new assortment in the Jared banners. We're also testing different formats and other banners such as Banter, which Gina mentioned performed very well at holiday, and we're looking to improve services and increase the services level of business in the Banter portfolio. We believe that those investments will play out, and we'll put investments against a strong test rate. Thank you for that. Are the benefits primarily to take place next year, so this isn't really a fiscal 2025 story, or is part of that baked into your expectations? It's a back half story. We have to invest upfront here. It'll take us probably through to the end of the third quarter to address all the stores that we have targeted. So yes, definitely later in the year. Okay. You mentioned a comment about some fixed costs slightly higher on a year-over-year basis. I'm just wondering, what is your outlook on labor inflation, and not only just inflation, but perhaps investment in labor as you grow going forward? Yeah. We feel very strongly about investing in training, especially within our store teams. We've provided for that in our guidance and in our investments for FY25. So very cognizant of that, and we believe it's very important to do that outside the store, take our jewelry consultants, and give them a right training environment that enables them to really gain full benefit and come back and train the balance of stores and so forth. So very important investment for us. Inflation itself is included within our guidance for FY25. Through our cost savings program, we have made every effort to offset inflation as we give our guidance throughout for the year. And we're very keen on making sure that we reach out indirect procurement, non-customer-facing costs that we protect marketing and our people and really drive out the cost that the customer doesn't see, nor do they care about. Okay. Okay. I have one last question, just talking more broadly about the shift to growth in the engagement category. Is there anything in your dataset that helps us understand the opportunity for average transaction value to increase or if the engagement consumer is perhaps more value-oriented or frugal, hoping to invest in other parts of the wedding ceremony or engagement process? Just any feedback there based on what you're looking at. So what we know about engagement customers is that they really think about this purchase as a long-term purchase. It's often the most expensive purchase that a couple has ever made together, and they really want it to represent more than just a piece of jewelry. It's representing their declaration of love to each other for a lifetime. So they tend to think in terms of a budget, which tends to be based on income. And so what they can get for that budget is generally what we see them asking for. We have, at this point in time, I would say, a group of customers who come in definitely wanting to spend that budget on a natural diamond because they believe that it has more potential to retain its value over time. We see some customers coming in wanting a lab- created because they have realized that they can get a bigger carat size for their same budget. And then we have some customers, the biggest percentage, who come in looking for the advice of our expert jewelry consultants to really help them make that choice. But it tends to be a more fixed budget kind of a situation as opposed to a value orientation, which is what we do see on fashion. So fashion tends to fluctuate a bit more with the macroeconomic environment. Now, thank you for that feedback. You mentioned lab-grown diamonds. Do you expect to expand that assortment in bridal for lab-grown for the back half of the year? We've been very intent on following the customer and being customer-inspired with our inventory. What I could tell you is that lab-created still remains in the teens% of jewelry sales overall. For us, it tends to be a little bit lower than the category, especially given that we're skewing more to bridal and a little bit less to low-priced fashion. So we offer it, and it's been a good opportunity for some more value-oriented customers to get more for their limited budget. But I think we'll continue to be very consumer-inspired on that front and make sure that we have a great offering of any kind of engagement ring or fashion product that customers are looking for across our banner portfolio. Very good. Thank you very much. Thanks, Jim. Thank you. Your next question comes from the line of Dana Telsey from Telsey Advisory Group. Your line is open. Hi. Good morning, everyone. As you think about the services business, what impact on the merch margin is that having, how you're planning the services business this year compared to last year, and anything of how you're planning it in the first quarter in light of the first quarter guidance? And then when you think about the store openings that you're doing, I think 20-30, malls, out-of-malls, where are they going to be? And then you had closed some stores overseas. Is there a further store closing program that you anticipate there? Thank you. So thanks, Dana. Good morning. Services is a growth opportunity for us. We mentioned that it outperformed merchandise margin or merchandise sales by 1,000 basis points, and it carries a 20-point higher margin for us compared to merchandise margin. So it's definitely a growth margin expander as well as a top-line growth driver for us. So we expect it to continue to outpace merchandise sales within Q1 as well as for fiscal 2025 for the full year. And the new programs that are the wrap-around that I mentioned earlier, post-repair ESA, POS prompts, and so forth, are very engaging for the jewelry consultant to have an opportunity to basically ask the customer the question, "Would you like to hear about the benefits of these packages for warranties as well as repairs?" So I believe that that's a continued driver. With respect to stores, the 20-30 store openings that we're looking forward to are largely off-mall. We believe that when we look at the performance that we've seen over the past year, Dana, off-mall has outperformed our mall stores as well as outlet has outperformed our mall stores. So we're continuing to drive on the economics of off-mall opportunities for us. So we'll continue on that. For the U.K., we sold the Ernest Jones locations that we mentioned, and we also will be closing more of the Ernest Jones stores, focusing on jewelry, largely in the H. Samuel. That's also H. Samuel banner. It's also a great story on real estate and refits, renovations for the H. Samuel. We're seeing the new store format there be very positive for the performance of the U.K. international segment. So we'll continue to keep our eye on that and invest somewhat in the H. Samuel, but continue to close on the Ernest Jones locations. Thank you. Thank you. Ladies and gentlemen, this concludes the Q&A portion of today's call. I would like to turn it back to Gina Drosos, Chief Executive Officer, for closing comments. In closing, I'd like to take a moment to thank Todd Stitzer for his service as chair to Signet's board of directors. Todd will complete his 12-year term in June and will roll off our board in accordance with Signet's board tenure requirements. I know I speak for the entire board when I say we are so grateful for Todd's leadership and vision. We've transformed Signet into a data-driven, digitally focused, and consumer-inspired company, and Todd's trusted guidance, unwavering support, and smart counsel have been an invaluable asset. Helen McCluskey will take over as chair in the coming months. As part of the board, Helen has already added great value to Signet, and we look forward to continuing to tap into her deep background in retail and understanding of the consumer. Thank you, everyone, for joining. We look forward to speaking to you all again in June. Thank you, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you for participating with me now at this conference.