Zale Corp.’s third quarter comp sales jumped a strong 15.2 percent, and although the company posted a loss, it was narrower than years past.
Some highlights of Zale’s results for the third quarter, ended April 30, 2011:
- Revenues: $412 million, up 14.5 percent
- Profits: Net loss of $10 million, compared to a net loss of $15 million last year
- Gross margin: Improved $24 million, to $206 million
- Gross margin on sales: 50.1 percent, compared to 50.8 percent last year.
More information on Zale’s financial report is here.
“We are pleased with the improving financial profile of the business, but we remain steadfastly focused on our number one goal: returning the business to profitability,” chief financial and administrative officer Matt Appel said during the conference call following the release of the financial results.
Appel added the company plans to close 10 fine jewelry stores and seven kiosks in the upcoming quarter. For fiscal year 2011, it plans to close 20 stores and five kiosks.
In the third quarter, the company closed 24 stores, closed two kiosks, and opened one.
Appel said that with diamond, gold, and silver prices all rising, the company plans to institute “significant price increases” after conducting “multiple price tests in select markets.”
CEO Theo Killion, however, stressed that Zale has “not and will not be comprising product quality.”
He noted that the business has now seen “seven consecutive months of positive comps," and that, for the Mother's Day selling period, comps rose approximately 10 percent. It has also seen "strong growth" in its warranty business.
Killion also paid tribute to his predecessor, Neal Goldberg, who died in March.