Zale Corp., Dallas, North America’s largest jewelry chain, saw earnings plummet 74% in its fourth quarter. Results, however, beat Wall Street expectations that were reduced earlier this month after the retailer warned of lower profits as it grapples with a souring economy and internal merchandise issues, the Associated Press (AP) reported.
For the three months ended July 31, Zale reported Thursday that it earned $2.95 million in profits, or nine cents per share, compared with $11.5 million, or 32 cents per share, in the year-ago period.
Analysts surveyed by Thomson Financial/First Call had expected 6 cents a share, the Associated Press (AP) reported.
Sales were $417 million, up from $379.3 million a year ago. Sales at stores open at least a year, known as same-store sales, fell 9.7% for the quarter, compared to a year ago. Results were adjusted for inflation.
Same-store sales are the best indicator of a retailers’ health.
For its fiscal year 2001, Zale earned $82 million, or $2.36 per share, compared with $111.5 million, or $3.11 a share in the previous year. Results included special items and a nonrecurring charge.
Net sales for the full year were more than $2 billion, up 14% from the $1.8 billion in sales a year ago.
“The earnings for the year are a reflection of the difficulties within the business in the first half and the efforts of the last five months to get things back on track,” said Robert J. DiNicola, chairman and chief executive officer. “Although this has been a demanding period, we are now well positioned to execute fiscal 2002.”
DiNicola said that the quantity and quality of inventories, as well as expense structures and long-term capital expenditures have all been addressed and are now “in line.”
The company reiterated that it will post a first-quarter loss in the range of 7 cents to 11 cents per share. Analysts surveyed by Thomson Financial/First Call expect a loss of 10 cents per share, the AP reported.