RAPAPORT... Zale reported a year-on-year revenue increase of 14 percent to $411.8 million during its third fiscal quarter that ended April 30, 2011. Comparable store sales rose 15 percent. However, cost of sales rose 16 percent to $205.4 million and gross margin as a percentage of sales dropped to 50.1 percent from 50.8 percent. Zale recorded a net loss of just under $9 million compared with a net loss of $12 million one year ago.
Inventory on April 30, was $756 million, compared with $693 million one year earlier. Zale recorded outstanding debt of $375 million, compared with $299 million on April 30, 2010.
“We continue to make progress in our multi-year initiatives to return the company to profitability,” said Theo Killion, Zale's chief executive. “Our results validate that the work we’ve done to improve our marketing, our product and our guest experience is beginning to take hold.”
Matt Appel, Zale's chief financial officer, added, ''This quarter marked the second consecutive quarter of positive same store sales. We are pleased with the trend of improved financial performance resulting from our turnaround initiatives.”