Zale Earnings: Loses Less on the Bottom Line, Revenues Climb

Zale Corporation’s (NYSE:ZLC) third quarter loss narrowed, beating estimates. Zale is a specialty retailer of fine jewelry. It operates specialty retail jewelry stores and kiosks located mainly in shopping malls throughout the United States, Canada and Puerto Rico.

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Zale Earnings Cheat Sheet for the Third Quarter

Results: Loss narrowed to $4.5 million (loss of 14 cents per diluted share) from $9 million (loss of 28 cents per share) in the same quarter a year earlier.

Revenue: Rose 8.1% to $445.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Zale Corporation beat the mean analyst estimate of a loss of 16 cents per share. It beat the average revenue estimate of $433.9 million.

Quoting Management: “The six consecutive quarters of positive comps, coupled with continued momentum through the Mother’s Day selling period, demonstrates that the strategic initiatives we’ve undertaken are resonating with our guests,” commented Theo Killion, Chief Executive Officer. “In addition, the improvement in operating earnings this quarter is another indication of the progress we are making as we accelerate towards bottom line profitability.”

Key Stats:

Zale Corp (NYSE:ZLC) has now topped analyst estimates for the last four quarters. It beat the mark by one cent in the second quarter, by 25 cents in the first quarter, and by 10 cents in the fourth quarter of the last fiscal year.

Revenue has increased for four consecutive quarters. Revenue increased 6% to $663.8 million in the second quarter. The figure rose 7.3% in the first quarter from the year earlier and climbed 9.4% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company reported a net loss last quarter, after reporting a profit in the quarter prior. The company booked a profit of $31.9 million, or 99 cents per share, in the first quarter.

Looking Forward: Analysts seem more positive about the company’s results for the next quarter than three months ago. The average estimate for the fourth quarter has moved from a loss of 72 cents a share to a loss of 66 cents over the last ninety days. The average estimate for the fiscal year is now 90 cents per share, a rise from the 99 cents predicted ninety days ago.

Competitors to Watch: Signet Jewelers Ltd., Blue Nile, Inc., DGSE Companies, Inc., Tiffany & Co., Birks & Mayors Inc., Elegant Illusions, Inc., Whitehall Jewelers Hldgs. Inc., Bijou Brigitte modische Accessoires AG, and USN Corporation.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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