Feb 21 (Reuters) – Zale Corp on Thursday posted a
better than expected holiday quarter profit, as sales rose at
its flagship chain and it cut selling and administrative costs.
Net profit rose to $41.2 million, or $1.02 per share for the
second quarter ended Jan. 31, compared with $28.8 million or 77
cents per share a year earlier. That was 3 cents better than
Wall Street analysts were expecting, according to Thomson
Reuters I/B/E/S.
Zale restated its forecast that it will return to profit for
the fiscal year ending in late July. Zale has lost money on an
annual basis for several years.
Selling, general and administrative were down to 41.6
percent of sales, from 42.5 percent a year earlier, and the
company continued to benefit from a debt refinancing last year
which lowered its interest expense.
Same-store sales rose 2.8 percent, led by a 3.6 percent jump
at Zales and Zales Outlets, its biggest business by far.
In Canada, where it operates Peoples Jewellers, same-store
sales rose 3.8 percent. But because of unfavorable exchange
rates, that came to a 0.5 percent increase in U.S. dollar terms.
At its Piercing Pagoda chain of mall-based kiosks, which
generate about one-sixth of company revenues, same-store sales
rose 1 percent.
The company said overall revenue rose 1 percent to $670.8
million.
