Zale (ZLC) Holiday Comps Rose 2.3%, Revs Up Modestly

January 10, 2013 7:32 AM EST
Zale Corporation (NYSE: ZLC) announced that comparable store sales increased 2.3 percent for the combined months of November and December 2012, encompassing the entire holiday selling period. This increase follows a 5.9 percent rise in the same period last year. At constant exchange rates, which exclude the effect of translating Canadian currency denominated sales into U.S. dollars, comparable store sales increased 1.6 percent for the holiday selling period, compared to an increase of 6.2 percent in the prior year period.

Revenues for the two-month period were $567 million, an increase of $3 million compared to $564 million in the same period last year. The increase in revenues is primarily due to the comparable same store sales growth partially offset by revenues associated with the net decrease of 50 stores compared to last year.

For the quarter ending January 31, 2013, the Company expects gross margin to be in line with the prior year quarter’s gross margin of 50.5 percent. Operating margin is expected to be approximately 7.5 percent, or 100 basis points higher than the prior year quarter, primarily as a result of improved leverage on selling, general and administrative expenses.

As previously announced, the company expects to achieve positive net income for fiscal year 2013.

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