Financial Data and Key Metrics Changes - Revenue for the quarter was approximately $1.4 billion, with same-store sales growth of 3% compared to last year, reflecting an expansion of average unit retail by 7% [15][19] - Adjusted operating income was $32 million for the quarter, more than 2.5 times the previous year, driven by higher sales and operating efficiencies [16][19] - Gross margin expanded by 130 basis points year-over-year, led by merchandise margin expansion of 80 basis points [16][19] Business Line Data and Key Metrics Changes - The three largest brands, Kay, Zales, and Jared, delivered a combined same-store sales performance of 6% compared to last year, with growth in both bridal and fashion categories [6][8] - In bridal, high single-digit sales growth was achieved, particularly in LGD wedding and anniversary bands, which now represent 40% of bridal business [15][47] - Fashion category saw Jared deliver 10% comp sales growth, with lab-grown diamonds expanding to 15% of fashion sales, doubling last year's rate [8][15] Market Data and Key Metrics Changes - The company noted a cautious outlook for Q4 due to external disruptions affecting consumer confidence, particularly among lower to middle-income households [19][24] - The promotional environment is expected to be flexible, with a focus on price point buckets to cater to varying consumer income levels [64][68] Company Strategy and Development Direction - The company is focused on its "Grow Brand Love" strategy, which aims to enhance brand equity and drive sustainable long-term growth [5][12] - There is a strategic emphasis on modernizing marketing approaches and optimizing inventory positions for key gifting items ahead of the holiday season [12][19] - The company plans to maintain a balance between bridal and fashion categories, recognizing the growth potential in fashion while sustaining dominance in bridal [57][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in being well-positioned for the holiday season, despite a cautious approach due to recent consumer confidence trends [19][24] - The company has taken decisive inventory positions in key categories and price points, aiming to meet consumer expectations for value [12][19] - Management acknowledged the challenges posed by tariffs and commodity pricing but highlighted successful mitigation strategies [10][38] Other Important Information - The company repurchased approximately $28 million worth of shares in the quarter, bringing year-to-date repurchases to nearly $180 million [18][19] - The company plans to close up to 100 stores this year, with a focus on optimizing real estate and enhancing store performance [73][74] Q&A Session Summary Question: Insights on Q4 guidance and external disruptions - Management noted cautiousness regarding Q4 due to consumer confidence issues and external disruptions, particularly affecting lower-income brands [24][26] Question: Expectations for the holiday season and inventory positioning - Management indicated strong inventory positioning for key price points and styles, aiming to improve conversion rates during the critical holiday period [31][49] Question: Impact of tariffs and pricing strategies - Management discussed the challenges of navigating tariffs and the importance of maintaining a balance between pricing and consumer value perception [39][40] Question: Performance of smaller brands and newness in assortment - Management confirmed a negative impact from smaller brands on overall comps and targeted approximately 30% newness in the assortment for Q4 [72] Question: Promotional strategies during the holiday season - Management stated that the promotional strategy remained on plan during the Cyber Five, with a focus on maintaining margin while serving diverse consumer needs [63][64]

Group 1: Market Overview - The expectation of a Federal Reserve interest rate cut has boosted market sentiment, leading to a significant rise in the Hong Kong stock market, particularly in the internet AI technology sector [1] - The Hong Kong Internet ETF (159792) saw a 3.70% increase with net subscriptions exceeding 600 million units, marking 45 consecutive trading days of net inflows since July 17, resulting in a total growth of over 30 billion units [1] - The current scale of the Hong Kong Internet ETF has reached 89.095 billion yuan, making it the largest cross-border ETF in the market [1] Group 2: Sector Performance - The technology sector in Hong Kong is currently undervalued historically and includes core assets in AI, which may attract increasing foreign investment [1] - Other sectors such as semiconductors, gaming, and robotics have also experienced strong market performance, with ETFs in these areas rising over 2.5% on September 17 [3] - The humanoid robotics sector has seen significant interest, with the EasyOne Robotics ETF (159530) surpassing 10 billion yuan in scale, achieving a net inflow of 8.76 billion yuan this year, marking a growth of over 50 times [3] Group 3: Fund Inflows - On September 16, three ETFs recorded net inflows exceeding 500 million yuan, including the Guotai Zhongzheng All-Index Securities Company ETF, EasyOne National Robotics Industry ETF, and the Fortune National Hong Kong Internet ETF [5] - The net inflow for the Fortune National Hong Kong Internet ETF on September 16 was 515 million yuan, down from 1.477 billion yuan on September 15 [6] Group 4: Consumer Electronics Outlook - The consumer electronics sector is entering a peak production period with the release of new products, which is expected to improve profitability as external uncertainties decrease [7] - The domestic chip market is rapidly developing under the AI wave, providing new momentum for the smart upgrade of consumer electronics products, with significant room for growth in penetration and product innovation [7] - The current demand in the consumer electronics sector is better than previously pessimistic market expectations, indicating potential for further valuation recovery [7]