Zale’s Holiday Revenue Up 5.8%

Revenues for the two-month period were $564 million compared to $533 million in 2010, an increase of 5.8 percent.

U.S. fine jewelry brands, which consist of Zales Jewelers, Zales Outlet and Gordon’s Jewelers, and which contribute approximately 69 percent of annual revenues, saw an increase in comparable store sales of 9 percent. Comparable store sales rose by 7.5 percent rise in 2010.

Comparable store sales for Canadian fine jewelry brands, which consist of Peoples Jewellers and Mappins Jewellers, and which contribute some 17 percent of annual revenues, rose 0.2 percent. This increase follows a 15.6 percent rise in the same period last year.

At constant exchange rates, comparable store sales for Canadian fine jewelry brands increased 1.7 percent compared to an increase of 10.2 percent in 2010.

Kiosk Jewelry (~14 percent of annual revenues) comparable store sales decreased 2.1 percent. In the same period of 2010, Kiosk Jewelry comparable store sales rose 4.2 percent.

For the quarter ending January 31, 2012, Zale expects gross margin to be consistent with the prior year quarter’s gross margin of 50.3 percent. Operating margin is expected to be slightly below the prior year quarter’s operating margin of 7 percent due to higher selling, general and administrative expenses primarily driven by the holiday advertising campaign and marketing for the launch of proprietary products.

Zale Corporation operates approximately 1,820 retail locations throughout the U.S., Canada and Puerto Rico as well as online.