Operator: Good day and welcome to the Signet Jewelers' Third Quarter 2013 Results Conference Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to James Grant. Please go ahead.
James Grant - VP IR: Good morning, and welcome to our third quarter earnings call. With me today are Mike Barnes, CEO and Ron Ristau, CFO, as well as Tim Jackson, Investor Relations Director.
The presentation deck we will be referencing is available from the webcast section of the Company's website. www.signetjewelers.com.
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 22, 2012. We also draw your attention to Slide 2 in today's presentation.
I will now turn the call over to Mike.
Michael W. Barnes - CEO: Thanks James, and good morning everyone. We delivered record earnings in our third quarter driven by strong execution of strategies, gross margin leverage and receivables productivity. For the quarter Signet same store sales were up 1.4%. The U.S. delivered a 1.2% comp store sales increase compared to 13.9% last year, which was boosted by a one-off watch clearance event.
The U.K. comps were up 2.3% in Q3 this year, the division's fourth consecutive positive comp.
Signet operating margin was 7.3%, which was an increase of 130 basis points from the prior year. Operating income was $52.5 million, up $10 million or 23.5%. Diluted earnings per share were $0.43, up $0.13 or 43.3%. Overall, it was an outstanding quarter. I'd like to thank all the Signet team members for contributing to these results.
Now, before I jump into the detail on the U.S. division, we would want to offer our sympathy to those that were impacted by Superstorm Sandy in the U.S. and offer our wishes for a speedy return to normalcy. The storm created some initial disruption and November thus far has been challenging. Nevertheless, with the majority of sales ahead of us, we're well prepared for the holiday season.
Turning to the U.S., total U.S. sales were $575.6 million, up $12.6 million or 2.2% driven by fashion jewelry and bridal, as well as branded and exclusive merchandise. Kay increased same store sales by 5.5% on top of the 13% growth last year. Jared comps were down 4.1% following an 18.3% increase last year, which included a large watch clearance event. That event and the discontinuation of the associated line unfavorably impacted the Jared comp this year by 9.6% in the quarter, and U.S. division comps by 3.5%. So, excluding this impact, sales growth in the third quarter of this year in Jared and Kay were approximately equal.
Overall, U.S. same store sales increased by 1.2% in the third quarter of fiscal 2013 compared to an increase of 13.9% last year. Operating income was $67.9 million, up $11.5 million, a 20.4% increase. I'll now take you through some of the key initiatives in place to drive our holiday season business.