Zale Corp., North America’s largest specialty retailer of fine jewelry, reported today that it now expects comparable store sales to be flat to down 1% for its first quarter.

The Dallas-based company indicated that based on current sales trends it now expects diluted earnings per share for the first quarter ending October 31 to range between a net loss of $0.19 and $0.21. In revising its outlook, the company cited the challenging trends during August and September, specifically regarding mall traffic. It further commented this weakness in mall traffic has had a material impact on both sales and gross margin at its Piercing Pagoda business.

“While we are disappointed in having to revise sales and earnings estimates, our focus remains on executing our business strategy,” said Mary L. Forte, president and CEO. “We are well-positioned to continue to gain market share during the upcoming holiday season.”

Zale Corporation is North America’s largest specialty retailer of fine jewelry operating approximately 2,300 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation’s business units include Zales Jewelers, Zales Outlet, Zale Direct at www.zales.com, Gordon’s Jewelers, Bailey Banks & Biddle Fine Jewelers, Peoples Jewellers, Mappins Jewellers, and Piercing Pagoda.

JCK