Operator: Good day and welcome to the Signet Jewelers First Quarter Results Conference Call. For your information, today's conference is being recorded.
At this time, I would like to turn the conference over to Mr. Terry Burman. Please go ahead, sir.
Terry Burman - CEO: Thank you, Operator. Good morning and welcome to the conference call for Signet's first quarter of fiscal 2011. I am Terry Burman, Chief Executive, and joining me from London are Walker Boyd, Finance Director, and Ron Ristau, CFO-Designate.
The presentation deck we will be talking to is available from the webcast section of the Company website. www.signetjewelers.com.
Before I go to our operating review, Walker will give the safe harbor statement and review the financial performance.
Walker Boyd - Finance Director: Thank you, Terry. During today's call we will in places discuss Signet's business outlook and make certain forward-looking statements. Any statements that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We urge you to read the risk factors and cautionary language in Signet Jewelers Annual Report on Form 10-K filed with the SEC on March 30, 2010, which can be found on the Company's website at, www.signetjewelers.com.
Additionally, certain financial information used during this call are considered to be non-GAAP measures, for a reconciliation of those to the most directly comparable GAAP financial measures, please refer to the Company's release dated May 27, 2010, available on the Latest News section of the Company's website.
The first quarter saw us build on the good progress we made last year in executing the strategy which we set out in March 2009. We have reduced business risks and continued to leverage our sustainable competitive advantages to drive profitable market share gains and improve operating margins through greater store productivity rather than adding space.
We have also enhanced an already strong balance sheet, ensuring financial flexibility, a major advantage in this sector. As always we, remain focused on profit maximization, and in the current environment, cash flow. We came into the downturn as a leader in the mid-market jewelry sector and our objective was to increase our competitive advantages during these challenging times. We believe we have been successful in achieving that objective, and therefore, are well placed for a recovery in consumer spending when it comes.
Same store sales increased by 5.8% in the quarter, with the performance in both U.S. and the U.K. similar to the fourth quarter of fiscal 2010. The impact of store closures reduced U.S. sales by 40 basis points, and the U.K. by 1.5%. The U.K. figure includes the impact of exiting from a small wholesale jewelry business at the end of fiscal 2010.
Total sales at constant exchange rates were up by 5.2% and reported sales up 6.2% to $810 million, benefiting from the move in the average pound sterling exchange rates, from $1.45 to $1.53.
Operating income of $85.5 million increased by $33.1 million, even though the comparable quarter last included a $4 million nonrecurring benefit arising form the change in US vacation entitlement policy implemented in fiscal 2010.