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Zale's Revenue +8%, Loss Narrows to $5M in 3Q

Gross Margin Improves to 51%, Debt Jumps 19%

May 23, 2012 7:54 AM   By Jeff Miller
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RAPAPORT... Zale reported a revenue increase of 8.1 percent year on year to $445.2 million for the third fiscal-quarter that ended on April 30, 2012. Same-store sales also rose 8 percent. Cost of sales increased 5.6 percent to $217 million and gross margin as a percentage of revenue improved to 51.3 percent from 50.1 percent. Still, Zale reported a net loss of $4.53 million, or 14 cents per share, compared with a loss of $9 million, or 28 cents per share one year ago.

Zale's inventory posted a modest increase of 2.9 percent year on year to $778.7 million. Long term debt rose 18.6 percent to $445.5 million.

By brand, Zale reported a same-store sales increase of 10.9 percent for Zales Jewelers, Zales Outlet and Gordon’s Jewelers combined. In Canada, Peoples Jewellers and Mappins Jewellers experienced a comparable-store sales increase of 6 percent in local currency. Kiosk jewelry same-store sales decreased 1.1 percent.

Theo Killion, Zale's chief executive, concluded that the retailer's six consecutive quarters of positive comparable-store sales was evidence that the turnaround strategy was resonating with consumers. ''In addition, the improvement in operating earnings this quarter is another indication of the progress we are making as we accelerate towards bottom line profitability,'' he said.

Tags: comparable, comps, Jeff Miller, loss, revenue, stores, Zale, zale's
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