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Zale's 2Q Sales +1%, Earnings Jump to $41M

Feb 21, 2013 7:59 AM   By Jeff Miller
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RAPAPORT... Zale Corporation's revenue rose 1 percent year on year to $670.8 million for the second quarter  that ended on January 31, 2013. Same-store sales grew 2.8 percent. Cost of sales rose just 0.9 percent to $331.1 million. Net earnings jumped to $41.2 million from $28.8 million one year ago.

“The growth achieved in the quarter was driven by our exclusive, branded collections. Further expanding these products and supporting them with compelling marketing and training is an important part of our growth strategy,” said Theo Killion, Zale's CEO.

Zales brand stores, consisting of Zales Jewelers and Zales Outlet, posted a comparable-store sales increase of 3.6 percent, compared with an increase of 10.1 percent one year ago. U.S. fine jewelry brands including Gordon’s Jewelers, posted a comparable-store sales increase of 2.8 percent. This increase follows an 8.9 percent rise in the same period last year.

Canadian fine jewelry brands, consisting of Peoples Jewellers and Mappins Jewellers, posted a comparable-store sales increase of 3.8 percent, which was much stronger than the 0.7 percent increase posted one year ago.  At constant-exchange-rates, same-store sales increased only 0.5 percent.

Gross margin on sales was 50.6 percent compared with 50.5 percent one year ago. Interest expense was $6 million, compared with $10 million in the second quarter of fiscal 2012. The decrease is the result of the debt refinancing completed in July 2012, according to Zale. Inventory as of January 31, had risen to $837 million, compared with $815 million in the same period one year ago.

Tags: earnings, Jeff Miller, revenue, Zale, zales
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