Zale Turns Corner, Has Great Third Quarter

As net earnings jumped 32 percent during the third quarter of last year, total revenues were almost flat – up a dismal 0.1 percent and comparable store sales increased 0.3 percent for the same period.

Total revenues for the quarter were $483 million, compared to $449 million for the same period last year, an increase of 7.6 percent. Last week Zale reported comparable store sales increased 7.2 percent.

Year-to-date revenues totaled $1.849 billion compared to $1.770 billion for the same period last year, an increase of 4.5 percent. On a comparable store basis, year-to-date sales increased 4.4 percent.

Year-to-date net earnings totaled $99.6 million or $3.70 per diluted share. For the same period last year, net earnings before a $136.3 million non-cash impairment charge from the company's annual review of goodwill were $92.7 million, or $2.86 per diluted share. Including the $136.3 million non-cash impairment charge, the net loss totaled $43.6 million, or $1.35 per share.

“We are very pleased with these earnings results as they reflect the ongoing execution of our strategy,” said Mary Forte, Zale President and CEO.

“Our merchandising and marketing initiatives have driven top-line improvement, while major initiatives such as direct product sourcing have also had a positive impact on the business. This combined with tight controls on inventory and expenses resulted in a 40 basis point improvement this quarter in operating margins over last year.”