Operator: Good day and welcome to the Signet Jewelers' Second Quarter Results Conference Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to your host today, Mr. Tim Jackson. Please go ahead.
Tim Jackson - IR Director: Thank you, operator. Good morning, and welcome to the conference call for Signet's second quarter fiscal 2012 results. I am Tim Jackson, Investor Relations Director. With me are Mike Barnes, CEO and Ron Ristau, CFO.
The presentation deck we will be talking to is available from the webcast section of the Company's website. www.signetjewelers.com.
Before I hand over to Mike, I will give the Safe Harbor statement. During today's presentation, 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, cautionary language and other disclosures in the Annual Report on Form 10-K that was filed with the SEC on March 30, 2011. We also draw your attention to this slide.
Michael W. Barnes - CEO: Thanks, Tim. We're very pleased with the record results in our second quarter, which reflects the ongoing success of our business driven by our competitive advantages.
For the quarter, total Signet same store sales were up 9.9% led by the U.S. with the 12.2% comp store sales increase and followed by the U.K., which comped positive 1.4%. Some other key highlights include; operating margin was 12.8%, an increase of 430 basis points. Income before taxes was $99.8 million up $45.1 million or 82.4%; diluted earnings per share were $0.76, up $0.31 or 68.9% and the free cash flow was $61.4 million.
Reflecting the strength for business model and its cash flow, the Board has declared a quarterly dividend of $0.10 per share. We feel this is an excellent way to return value to our shareholders, while still maintaining financial flexibility to invest in future business initiatives.
Now looking at the results in a little more detail and starting with the U.S. division performance. Total U.S. sales were $643 million, up $65.3 million, an increase of 11.3%. Kay had another outstanding quarter and increased same store sales by 13.5%, up from the 2.7% growth achieved in the same second quarter of fiscal 2011. Jared again performed extremely well with comps of 12.6% following a 14.1% increase last year, outstanding two year comps.
Overall U.S. same store sales increased by 12.2% compared to an increase of 6% last year. Average selling price, excluding the charm bracelet category, was up 12% for Kay and 8.6% for Jared, 13.3% for the regional brands. This reflects not only price increases, but also importantly our consumers trading up our pricing architecture, including to new higher price point merchandise in the bridal category.
Operating income was $104.4 million, up $43.7 million, which was a 72% increase. The U.S. division's operating margin increased by 570 basis points to 16.2%.