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RAPAPORT... The Zale Corporation reported that revenue rose 1.4 percent year on year to $362.6 million in the first quarter that ended on October 31. Same-store sales, which include ecommerce revenue, rose 4.4 percent. Cost of sales increased 1 percent to $168.8 million and gross margin as a percentage of sales moved slightly higher to 53.4 percent from 53.2 percent one year ago. Zale narrowed its loss 3.4 percent to $27.3 million.
U.S. fine jewelry brands, consisting of Zales Jewelers, Zales Outlet and Gordon’s Jewelers, posted a same-store sales increase of 6.3 percent. Peoples branded stores recorded a comparable-store sales increase of 3.1 percent and Canadian fine jewelry brands, consisting of Peoples Jewellers and Mappins Jewellers, posted a comparable-store sales increase of 2 percent. Piercing Pagoda's same-store sales fell 1.8 percent. Zale's level of inventory going into the Christmas quarter was basically flat year on year at $903 million. The jeweler held outstanding debt of $506 million on October 31, compared with $524 million one year ago. Theo Killion, Zale's CEO, said, “We have now delivered positive comparable-store sales for 12 consecutive quarters. Importantly, our core national brands drove our sales performance in the first quarter with a 7.5 percent comp in Zales and an 8.4 percent comp in Peoples.” Killion added that for the Christmas season, Zale expanded its exclusive, branded product offerings, launched a new marketing campaign to attract customers and improved the store environment to enrich the shopping experience.
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