Zale Corporation Reports Fourth Quarter abd 2010 Results

Zale Corporation ZLC earlier today announced its financial results for the fourth quarter and full year ended July 31, 2010. The Company incurred a net loss for the fourth quarter ended July 31, 2010 of $28.5 million, or $0.89 per share, compared to a net loss of $89.8 million, or $2.81 per share, in the comparable period in the prior year. Revenues for the quarter ended July 31, 2010 were $345 million, a decrease of 3.4% compared to $357 million during the comparable period in the prior year. Same store sales during the quarter ended July 31, 2010 decreased 2.1%, compared to a decrease of 21.2% during the comparable period in the prior year. For the fourth quarter ended July 31, 2010, the Company achieved gross margin on sales of 52.7%, compared to 46.4% in the comparable period in the prior year. The 630 basis point improvement was primarily due to lower levels of merchandise discounts and higher warranty revenue recognition during the 2010 quarter and to a $13.5 million inventory impairment recorded in the fourth quarter of 2009. For the fiscal year ended July 31, 2010, the Company incurred a net loss of $94 million, or $2.92 per share, compared to a net loss of $190 million, or $5.94 per share, in fiscal 2009. For fiscal year 2010, revenues were $1.62 billion, a decrease of 9.2% compared to $1.78 billion for fiscal 2009. Same store sales decreased 6.6% for fiscal year 2010, compared with a decrease of 16.6% during fiscal year 2009. The Company achieved gross margin on sales of 50.4% during the fiscal year ended July 31, 2010, compared to 46.7% in the prior fiscal year. The 370 basis point improvement was primarily due to lower levels of merchandise discounts and higher warranty revenue recognition during 2010.
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