Wall Street Journal
By Melodie Warner
Zale Corp.'s fiscal-third-quarter loss narrowed as the jewelry retailer registered double-digit gains in revenue and same-store sales.
For the quarter ended April 30, Zale reported a loss of $8.99 million, or 28 cents a share, compared with a loss of $12.1 million, or 38 cents, a year earlier. The loss from continuing operations narrowed to 31 cents a share from 46 cents. Revenue jumped 14% to $411.8 million. Gross margin slipped to 50.1% from 50.8%.
Same-store sales rose 15.2%, the second consecutive quarter of growth. Inventory jumped 9% to $756 million.
"Our results validate that the work we've done to improve our marketing, our product and our guest experience is beginning to take hold," said Chief Executive Theo Killion.
Zale, of Irving, Texas, is attempting a turnaround after several years of reduced quarterly sales, though the declines have slowed of late. The company has closed a number of stores over the past few years as the recession and its own missteps hurt results. It faced a cash shortage last year that sent it scrambling to raise capital.
Showing posts with label Zale. Show all posts
Showing posts with label Zale. Show all posts
Wednesday, May 25, 2011
Tuesday, April 26, 2011
Zale Refinances $120M of Credit Facility
by Evan Clark
From WWD Issue 04/26/2011
Prices for silver and gold, and the value of Zale Corp.’s inventory, might be on the rise, but the hot commodities market means the jeweler also has to pay up to replenish its stores.
The Dallas-based jeweler Monday said it refinanced a $120 million portion of its asset-backed credit facility Monday, pushing its due date back to April 2014 from August of this year.
Silver prices rose to $45.83 an ounce Monday as gold topped $1,507. Both commodities are near historic highs and are of just as much interest to investors as jewelers. Silver is up 52 percent this year and gold is ahead 5.7 percent.
For now, credit is cheaper than either of the precious metals.
This is part two of the firm’s refinancing. In May, Zale amended the other $530 million of its $650 million facility, which carries an interest rate 3.5 to 4 percentage points above the London Interbank Offer Rate, or LIBOR.
Borrowings under the credit agreement are contingent in part on the liquidation value of the firm’s inventory.
The company recently had its inventory reappraised, according to Matt Appel, executive vice president and chief financial officer, but he said the appraisal reflected how quickly Zale was turning its inventory and at what profit margin rather than the effect of rising commodity prices.
“Generally speaking, commodity prices would increase the cost of our inventory,” Appel said. “If we paid more to replenish inventory then the cost of what we sold would go up. As our inventory costs go up we can borrow more against it but we’re paying more for it.”
Shares of Zale slipped 1.1 percent to $3.77 Monday as the S&P Retail Index pulled back 0.3 percent to 533.34.
From WWD Issue 04/26/2011
Prices for silver and gold, and the value of Zale Corp.’s inventory, might be on the rise, but the hot commodities market means the jeweler also has to pay up to replenish its stores.
The Dallas-based jeweler Monday said it refinanced a $120 million portion of its asset-backed credit facility Monday, pushing its due date back to April 2014 from August of this year.
Silver prices rose to $45.83 an ounce Monday as gold topped $1,507. Both commodities are near historic highs and are of just as much interest to investors as jewelers. Silver is up 52 percent this year and gold is ahead 5.7 percent.
For now, credit is cheaper than either of the precious metals.
This is part two of the firm’s refinancing. In May, Zale amended the other $530 million of its $650 million facility, which carries an interest rate 3.5 to 4 percentage points above the London Interbank Offer Rate, or LIBOR.
Borrowings under the credit agreement are contingent in part on the liquidation value of the firm’s inventory.
The company recently had its inventory reappraised, according to Matt Appel, executive vice president and chief financial officer, but he said the appraisal reflected how quickly Zale was turning its inventory and at what profit margin rather than the effect of rising commodity prices.
“Generally speaking, commodity prices would increase the cost of our inventory,” Appel said. “If we paid more to replenish inventory then the cost of what we sold would go up. As our inventory costs go up we can borrow more against it but we’re paying more for it.”
Shares of Zale slipped 1.1 percent to $3.77 Monday as the S&P Retail Index pulled back 0.3 percent to 533.34.
Saturday, April 16, 2011
Zale Says No SEC Penalty
By Nathan Becker
Zale Corp. said the Securities and Exchange Commission has completed an investigation of the jewelry retailer's accounting and won't pursue any enforcement action.
The regulator launched its investigation in October 2009 after Zale restated its 2008 and 2009 earnings. The company at the time said a financial audit had uncovered internal control and accounting issues related to advertising costs, income taxes and internal company payments, among other things.
"We are glad to share with our investors and employees that this matter is now behind us," said Chief Executive Theo Killion.
Dallas-based Zale is attempting a turnaround after several years of sagging sales. The company has closed a number of stores over the past few years due to the recession and because of a cash shortage last year.
Zale in February said its fiscal second-quarter profit more than quadrupled as strong holiday sales propelled the company to its first quarterly revenue gain in years.
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