Fine jewelry retailer Zale Corp. said Tuesday that earnings declined nearly 41 percent in the fiscal fourth quarter, and the company announced plans to close 30 to 35 Bailey Banks & Biddle stores after the holiday season, The Associated Press reports.
Net income fell to $4.1 million in the three months ended July 31 from $6.9 million a year ago. Total revenue rose 3.7 percent to $472.3 million from $455.6 million last year.
For the full year, The Dallas-based retailer earned $106.8 million, up slightly from last year’s $106.5 million. Total revenue increased 3.4 percent to $2.38 billion from $2.30 billion in the prior fiscal year. At stores open at least a year, sales increased 0.3 percent for the year.
“The increases to sales and earnings in fiscal 2005 did not meet our expectations, particularly due to the underperformance of the Zales brand and its impact on our consolidated results,” said Mary L. Forte, Zale President and CEO. “With many new initiatives being implemented at Zales, significant repositioning of the brand has taken place.”
In a move to improve brand performance and profitability at Bailey Banks & Biddle, Zale plans to close 30 to 35 stores after the upcoming holiday season. The company expects to take a fiscal 2006 charge of $13 million related to the closings.
Zale sees full-year revenue growth of 5 percent to 7 percent, including a same-store sales boost of 2.5 percent to 3.5 percent. Those projections excludes the impact of store closures.