RAPAPORT... Zale Corporation reported that revenue for the November and December Christmas holiday period rose 5.8 percent year on year to $564 million, but the figure included approximately $10 million resulting from the change in warranty revenue recognition. Zale's comparable-store sales increased 5.9 percent for Christmas season, compared with an 8.5 percent rise one year ago. For November, same-store sales rose 10.1 percent, but in December the increase was only 4.2 percent.
Zale reported that comparable-store sales for Zales Jewelers, Zales Outlet and Gordon's Jewelers rose 9 percent year on year, which was an improvement from only a 7.5 percent increase in Christmas season 2010.
In Canada, Peoples Jewellers and Mappins Jewellers had an increase in comparable-store sales of 1.7 percent at a constant-exchange rate, following a 10.2 percent increase in 2010.
Kiosk Jewelry sales for Zale fell 2.1 percent this Christmas season, whereas one year ago kisok revenue rose 4.2 percent on a same-store basis.
Zale will end its fourth quarter on January 31, and it expects that gross margin will "be consistent with the prior year quarter's gross margin of 50.3 percent." Operating margin is expected to be slightly below the 7 percent rate of 2010 due to higher selling, general and administrative expenses primarily driven by the holiday advertising campaign and marketing for the launch of proprietary products.