Zale Corp., New York, the largest jewelry chain in the United States, on Friday reported a 7% increase in fiscal second-quarter operating earnings on sales that were stronger even though consumers reined in spending on luxury goods, Reuters reported.
Analyst Jeffrey Stein of McDonald Investments Inc. said the Dallas-based company benefited from a trend toward more sentimental gifts during the holiday season following the Sept. 11 attacks on the United States, Reuters reported. The company’s management, most notably Chief Executive Robert DiNicola, has also been praised for spending the past year refocusing Zale’s business on wedding and engagement rings, controlling costs and improving the quality of its merchandise.
The company, which operates more than 2,300 stores under the Zales, Gordon’s Jewelers and Bailey Banks & Biddle Fine Jewelers banners, said earnings in the quarter ended Jan. 31 rose to $93 million, or $2.64 a diluted share, before an unusual item. That compares with $87 million, or $2.52 before a one-time charge a year earlier.
“We enacted tighter controls on both expenses and inventory,” DiNicola reportedly said in a statement. “Our focus now is to complete our game plan of repositioning the business through the end of the fiscal year in July.”
Zale reported second-quarter sales rose 3.6% from a year before to $893 million from $861 million.
On Feb. 7, the company said second-quarter sales at stores open at least a year — a key barometer of retail performance — rose 1.4%, when adjusted to eliminate foreign currency fluctuations.