Financial Reporting

Holiday comps up 6% for Zale

Jan 11, 2012

Dallas--Same-store sales increased 6 percent in November and December for Zale Corp. following a 9 percent increase in the same period last year, the company reported Tuesday.

Total sales climbed from $533 million to $564 million, an increase of 6 percent.

While Zale reported positive comps for the holiday season, there was a marked difference between the company’s performance in the month of November as compared to December. Same-store sales were up 10 percent in November but climbed by less than half that much, 4 percent, in December.

The company’s U.S. stores, which in recent years have performed poorly compared to its Canadian operations and jewelry kiosks, turned in the strongest holiday performance.

Zales Jewelers, Zales Outlet and Gordon’s Jewelers, saw same-store sales climb 9 percent, on the heels of an 8 percent increase last holiday season. Zale’s U.S. fine jewelry brands make up the largest percentage of its annual revenues at 69 percent.

Peoples Jewellers and Mappins Jewellers in Canada reported a 0.2 percent increase in same-store sales, following a 16 percent increase last year.

The company’s kiosk jewelry operations, meanwhile, saw same-store sales decline 2 percent, compared to an increase of 4 percent last year.

For the quarter ending Jan. 31, Zale anticipates its gross margin to remain steady at 50 percent. Operating margin is expected to decline slightly due to higher expenses incurred by the holiday advertising campaign and the marketing for the launch of proprietary products.

Zale ranks No. 3 on National Jeweler’s 2011 list of $100 Million Supersellers.

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