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Zale reports 3Q EPS loss
Zale Corp. reported today a net loss from continuing operations for the third quarter of fiscal 2008 of $17.4 million, or $0.42 per share, compared with a loss of $5 million, or $0.10 per share, for the third quarter of fiscal 2007.
In February, Zale launched a program to permanently reduce inventory levels to better clarify merchandise presentation, to improve inventory efficiency and to help position the company for the future.
The company's goal was to achieve a $100 million reduction in inventory at an anticipated 500 basis point negative impact on gross margin in the second half of fiscal 2008. During the third quarter, the clearance strategy exceeded expectations, resulting in the liquidation of $55 million of inventory with a 460 basis point reduction in gross margin.
"We are very pleased with our progress this quarter against our plan," Zale President and Chief Executive Officer Neal Goldberg said in a media release issued on Thursday. "We have a focused agenda to improve performance, and the team has stayed locked-in on achieving our objectives. This includes focusing on our core customer by clarifying our merchandise offering, improving our value proposition and simplifying our marketing message that is led by product and supported by price."
Goldberg also noted that Zale is enhancing operational effectiveness through an efficiency program and proper alignment of its organizational structure. In addition, the company is maintaining financial rigor and discipline by executing its inventory-liquidation program.
Other 3Q financial highlights for the company include:
—A warranty-adjusted EPS loss of $0.17.
—A 5.8 percent increase in third-quarter comparable-store sales.
—Approximately 8.1 million shares repurchased during the third quarter.
—13.8 million shares repurchased fiscal YTD at an average price of $18.06.
Zale is a specialty retailer of fine jewelry in North America operating approximately 2,200 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at Zales.com and Gordonsjewelers.com.
For additional information on Zale Corp., visit its Web site, Zalecorp.com.
In February, Zale launched a program to permanently reduce inventory levels to better clarify merchandise presentation, to improve inventory efficiency and to help position the company for the future.
The company's goal was to achieve a $100 million reduction in inventory at an anticipated 500 basis point negative impact on gross margin in the second half of fiscal 2008. During the third quarter, the clearance strategy exceeded expectations, resulting in the liquidation of $55 million of inventory with a 460 basis point reduction in gross margin.
"We are very pleased with our progress this quarter against our plan," Zale President and Chief Executive Officer Neal Goldberg said in a media release issued on Thursday. "We have a focused agenda to improve performance, and the team has stayed locked-in on achieving our objectives. This includes focusing on our core customer by clarifying our merchandise offering, improving our value proposition and simplifying our marketing message that is led by product and supported by price."
Goldberg also noted that Zale is enhancing operational effectiveness through an efficiency program and proper alignment of its organizational structure. In addition, the company is maintaining financial rigor and discipline by executing its inventory-liquidation program.
Other 3Q financial highlights for the company include:
—A warranty-adjusted EPS loss of $0.17.
—A 5.8 percent increase in third-quarter comparable-store sales.
—Approximately 8.1 million shares repurchased during the third quarter.
—13.8 million shares repurchased fiscal YTD at an average price of $18.06.
Zale is a specialty retailer of fine jewelry in North America operating approximately 2,200 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at Zales.com and Gordonsjewelers.com.
For additional information on Zale Corp., visit its Web site, Zalecorp.com.
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