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RAPAPORT... Zale Corporation reported that its revenue improved 2.5 percent year on year to $417.1 million for the fourth fiscal quarter that ended on July 31. Same-store sales, which included online sales, rose 5.6 percent with Zales brand stores up by 8.1 percent. Furthermore, Zale reduced its cost of sales slightly, by 0.8 percent, which improved its gross margin to 53.1 percent compared with 51.6 percent one year earlier. Interest expenses totaled $6 million, compared with $15 million in the fourth quarter of fiscal 2012. Zale's loss in the fourth quarter improved to $7.98 million, or 25 cents per share, compared with a loss of $19.75 million, or 61 cents per share, one year ago.
During Zale's fiscal 2013, revenue improved 1.1 percent year on year to $1.89 billion as same-store sales rose 3.3 percent and cost of sales were kept in check at $903.6 million. Interest expenses fell to $23 million compared with $45 million one year earlier. Gross margin improved to 52.1 percent compared with 51.5 percent in 2012. Zale recorded a profit of $10 million, or 31 cents per share, compared with a loss of $27.3 million, or 85 cents per share, in fiscal year 2012.
Inventory levels for Zale rose 3.5 percent to $768 million and outstanding debt fell 9.5 percent to $410 million as of July 31.
“We are pleased to report another solid quarter with a 5.6 percent comp and significant improvement to margins. Importantly, for the year we achieved a significant milestone by delivering our highest net income in six years,” according to Zale's CEO, Theo Killion. “We intend to build on this momentum as we focus on driving profitable top-line growth and long-term shareholder value.”
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