Zale Corp Earnings: Margins Suffer as Costs Rise

Zale Corporation (NYSE:ZLC) reported its results for the first quarter. Zale is a specialty retailer of fine jewelry. It operates specialty retail jewelry stores and kiosks located mainly in shopping malls throughout the United States, Canada and Puerto Rico.

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Zale Corporation Earnings Cheat Sheet

Results: Loss narrowed to $28.3 million (loss of 88 cents per diluted share) from $31.9 million (loss of 99 cents per share) in the same quarter a year earlier.

Revenue: Rose 1.8% to $357.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Zale Corporation fell short of the mean analyst estimate of a loss of 68 cents per share. It fell short of the average revenue estimate of $433.9 million.

Quoting Management: “We are pleased to report our eighth consecutive quarter of positive same store sales and continued progress towards our goal of returning Zale to profitability,” commented Theo Killion, Chief Executive Officer. “As we enter the holiday period, we are confident our foundation is in place for this important selling season.”

Key Stats:

Revenue has increased for four quarters in a row. Revenue increased 7.9% to $407 million in the fourth quarter of the last fiscal year. The figure rose 8.1% in the third quarter of the last fiscal year from the year earlier and climbed 6% in the second quarter of the last fiscal year from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 23 cents, and in the third quarter of the last fiscal year, it was ahead by 2 cents.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the second quarter is 97 cents per share, up from 92 cents ninety days ago. The average estimate for the fiscal year has reached a profit of 27 cents per share, up from a loss of 3 cents ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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