Zale fiscal 4th-qtr loss narrows as sales increase
DALLAS (AP) — Zale Corp. on Wednesday predicted that it will return to annual profitability in the next year, at the same time it posted a narrower fiscal fourth-quarter loss, helped by higher demand at its U.S. fine jewelry stores.
For the quarter ended July 31, Zale's loss totaled $19.7 million, or 61 cents per share, compared with a loss of $32.6 million, or $1.02 per share, in the same quarter last year.
A change in warranty revenue recognition reduced the recent quarter's results by 20 cents per share.
The loss was smaller than Wall Street expected. Analysts, on average, expected a loss of 84 cents per share, according to FactSet.
Revenue rose 8 percent to $407 million, from $377.3 million in the year-ago period.
Revenue at stores open at least a year increased 8.3 percent. The metric is a key measure of a retailer's health, because it excludes sales at stores that opened or closed during the year.
The company's fine jewelry brands including Zales Jewelers, Zales Outlet and Gordon's Jewelers posted an 11.2 percent increase in sales at stores open at least a year, while same-store sales at its Canadian fine jewelry brands rose just 2 percent.
Revenue from kiosk jewelry stores open at least a year increased 2.7 percent.
For fiscal year 2012, the company said its loss totaled $27.3 million, or 85 cents per share, compared with a loss of $112.3 million, or $3.50 per share, in fiscal 2011. Revenue rose to $1.87 billion from $1.74 billion.
The company said that based on its current business momentum and help from its recent debt financing, it expects to post a profit for fiscal 2013. Wall Street was predicting a profit of 9 cents per share, on revenue of $1.91 billion.
Zale shares rose 8cents, or 24 percent, to $4.20 in morning trading.