ZLC - Zale Corp. (NYSE)

About Zale Corporation

Zale Corporation operates as a specialty retailer of fine jewelry. The company operates through three segments: Fine Jewelry, Kiosk Jewelry, and All Other. The Fine Jewelry segment operates under five brands. Its Zales Jewelers brand provides diamond jewelry primarily in the bridal and fashion segments through 693 stores in 50 states and Puerto Rico; Gordon's Jewelers brand provides jewelry in 202 stores in 31 states of the United States and Puerto Rico; the Peoples Jewellers and Mappins Jewellers brands offer gold jewelry, gemstone jewelry, and watches through 212 stores in Canada; and Zales Outlet brand offers branded watches, gemstones, gold merchandise, and diamond fashion and solitaire products through 140 stores in 36 states and Puerto Rico. The Fine Jewelry segment also sells its products through e-commerce sites, such as zales.com and gordonsjewelers.com. The Kiosk Jewelry segment provides gold and silver products, such as bracelets, earrings, charms, rings, 14 karat and 10 karat gold chains, and silver and diamond jewelry primarily under Piercing Pagoda, Plumb Gold, and Silver and Gold Connection brand names, through 684 mall-based kiosks. The All Other segment provides insurance and reinsurance facilities for various types of insurance coverage, such as merchandise replacement coverage, credit insurance coverage, and discontinued lines of insurance. Zale Corporation was founded in 1989 and is headquartered in Irving, Texas.

Zale Corporation
901 West Walnut Hill Lane
Irving, TX 75038-1003
United States - Map
Phone: 972-580-4000
Fax: 972-580-5547
Web Site: http://www.zalecorp.com

http://www.zalecorp.com/





Zale Corporation, a leading specialty retailer of fine jewelry in North America uses its leverage to initiate and build upon its relationships with customers. Zale is propelled by a diversified portfolio of brands that includes Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers and Mappins Jewellers of Canada, and Piercing Pagoda.

Zale is driven by three core product categories that cater to each consumer segment with varying intensity. The bridal category, a differentiating factor for a fine jeweler, enjoys consistent, stable demand and establishes lifelong customer relationships. The fashion segment inspires gift giving and self purchases while allowing the Company to maximize the peak holiday periods. The watch business provides additional brand appeal, enhancing the Company's ability to further drive traffic.

With over 2,150 locations throughout the United States, Canada and Puerto Rico, Zale dominates the mall environment on a national scale. As the highly fragmented industry continues to consolidate, Zale is in excellent position to further increase its market share. The Company continues to increase its exposure in the industry, having successfully integrated its two most recent acquisitions and having developed an off-mall strategy to capture a customer base outside the traditional mall.

Zale is poised for future growth with a solid and straightforward balance sheet and expected strong annual free operating cash flow. Zale continues to improve its business with a focus providing an “unforgettable” customer experience and on quality merchandise assortments. The Company's strong financials, its focus on improving the core mall business, the streamlining of its organization, and its ability to identify growth opportunities positions Zale to meet its objective of enhancing shareholder value.

Our Brands

Zale Corporation offers customers an extensive selection of quality jewelry in a wide variety of price categories. Whether you are shopping for an addition to your personal jewelry wardrobe or you need a special gift, come to one of our stores for the best choices -- from fashion and contemporary styles to classic and traditional designs.

Zales Jewelers
Nationally recognized authority on diamonds. Founded in 1924, "the Diamond Store" is the most recognizable name in fine jewelers.

Zales Outlet
Value-priced fine jewelry. A wide variety of jewelry is chosen for shoppers who prefer quality merchandise at less-than-retail prices.

Gordon's Jewelers
Classic to contemporary. Regional jeweler caters to local styles and tastes by offering unique designs in select markets.

Peoples Jewellers
The Diamond Store. The largest national jewelry retailer in Canada offers fine jewelry and brand-name watches at affordable prices.

Mappins Jewellers
Fine Jewellers since 1935. Customers across Canada can shop for classic fine jewelry and watches of exceptional value in stylish mall locations.

Piercing Pagoda
Fashion-forward. For customers who appreciate quality jewelry at everyday low prices, the gold kiosk leader offers an extensive selection of gold chains, charms, bracelets, rings, earrings, body jewelry, as well as silver and stainless jewelry.

ZLC Direct
Quick and easy. Consumers who prefer to shop on the Internet have direct access to the online selection of quality merchandise from Zales Jewelers.

Contact Information

Primary IR Contact
David H. Sternblitz
Vice President and Treasurer
Phone: 972-580-4000
E-mail: ir@zalecorp.com

Rhett Butler
Manager, Investor Relations
Phone: 972-580-4482

Transfer Agent
Bank of New York
Shareholder Relations Department
Churchstreet Station, P.O. Box 11258
New York, NY 10286-1258
Phone: 1-800-524-4458
Corporate Website: http://www.bankofny.com

A Diamond and a Rough Jeweler
By Ryan Fuhrmann, CFA
August 29, 2008 | Comment (0) | Recommend (0)

Tiffany (NYSE: TIF) and Zale (NYSE: ZLC) both operate jewelry stores, and both reported impressive earnings yesterday. But that's where the similarity ends. One is on pace to become a preeminent global brand, while the other will likely remain locked in combat with domestic rivals for long-term relevancy.

If you guessed that Tiffany is the sparkling gem in this scenario, you probably know that items wrapped in its little blue boxes have become some of the jewelry industry's most recognized gifts. Tiffany's overall upscale appeal is currently sweeping across the globe, which helped the company post an 11% increase in second-quarter sales. Revenue jumped 17% in the Asia Pacific region, and an even stronger 35% in Europe.

Better-than-expected top-line trends helped leverage fixed costs, contributing to a 21% earnings improvement when you back out a charge in last year's quarter. This figure also beat expectations, giving management enough confidence to boost its full-year outlook a couple of cents. Guidance now falls between $2.82 and $2.92 per share, as the company predicts more strong sales abroad and a return to positive U.S. same-store sales by the fourth quarter.

At first glance, Zale is doing much better than Tiffany domestically, but its 6.1% fourth-quarter same-store sales growth owed largely to clearing out excess inventory on the cheap. Top-line results still managed to beat expectations, but earnings were negative for the year, even after a number of one-time gains.

Management expects a much smoother year ahead, with positive earnings and $145 million to $155 million in free cash flow. But one has to wonder how much improvement Zale is capable of over the long term. It has been in restructuring mode for a few years now, and though there have been plenty glimmers of hope, net profit margins have historically averaged less than 5%.

That's probably because Zale has to slug it out in the middle of the market, where retail giants such as Wal-Mart (NYSE: WMT), Sears (Nasdaq: SHLD), and Target (NYSE: TGT) can use volume to lower costs. So can online rivals such as Blue Nile (Nasdaq: NILE), which avoid bricks-and-mortar expenses. Tiffany's high-end focus leaves it much better-positioned, and its global reach is proving that it also has name recognition. That asset is definitely top-drawer in the cutthroat jewelry industry.

AP
Analysts tout Zale's 4th-quarter results
Friday August 29, 1:32 pm ET
Analysts encouraged by Zale's inventory reduction, following 4th-quarter results

NEW YORK (AP) -- Analysts on Friday remained upbeat on Zale Corp.'s progress in reducing inventory, after the jewelry retailer posted a smaller-than-expected fiscal fourth-quarter loss and forecast fiscal 2009 profit above analyst estimates.

Soleil Securities Group analyst Jeffery Stein said Zale has "made considerable progress" in a short period of time by reducing expenses and inventory. Stein raised his fiscal 2009 earnings per share estimate all the way to $1 from 45 cents because of these improvements.

Stein maintained a "Hold" rating on the stock, but raised his price target to $30 from $23, implying upside of 7.5 percent to Thursday's close of $27.92.

Goldman Sachs analyst Adrianne Shapira said she had been skeptical about Zale's ability to effectively clear merchandise, but the company proved otherwise.

"The new team did eliminate over $100 million in inventory by fourth-quarter's end," Shapira wrote in a client note.

Shapira said gross margin in the first half of 2009 may improve more than previously expected.

Shares of Zale declined 16 cents to $27.76 in afternoon trading on a down day for the broader market.

AP
Retailers slash prices, but at what cost?
Tuesday September 2, 5:04 pm ET
By Anne D'Innocenzio, AP Business Writer
Retailers slash prices, but run risk of hurting profit margins, eroding cache

NEW YORK (AP) -- In a bid to pull hesitant shoppers into their stores, retailers are slashing prices on everything from jeans to dinnerware. But those fat discounts will likely come at a big cost for the companies.

At teen retailer American Eagle Outfitters Inc., shoppers who buy jeans get a second pair at half off. Jewelry chain Zale Corp. is offering an extra 20 percent off on a slew of items like gold earrings that were already slashed up to 70 percent. And Pottery Barn has discounts of up to 75 percent.

"There's a fine line between aggressive promotions and panic, and we are seeing a little bit of both right now," said Dan Hess, founder and CEO of research firm Merchant Forecast.

While retailers entered the fall season with inventories well below last year, analysts say many were still a little too hopeful: August sales are turning out to be even weaker than expected, which analysts fear could lead to more piles of marked-down merchandise on the floor. That could in turn hurt third-quarter profits as the industry prepares for the critical holiday season. Major retailers, including Wal-Mart Stores Inc., J.C. Penney Co. and Gap Inc., which also operates Banana Republic and Old Navy stores, are slated to announce final August sales results on Thursday.

Hess estimated that discounts are 10 percent deeper at mall-based apparel stores than a year ago, despite a drop of anywhere from 10 percent to 15 percent in inventories.

"Even though retailers are entering the season conservatively, they still have been too optimistic about the consumer," he added.

Stifel Nicholas analyst Richard Jaffe noted that the weak sales trend suggests a downturn that more closely resembles the one of the mid-1970s than more recent difficult periods.

"It's a more prolonged consumer spending downturn," he said. "It's going to be tough. There's no quick way out of it."

Offering such deep discounts can cost high-end retailers such as Nordstrom Inc. and Saks Inc. in more ways than lower margins or falling profits. By doing so, analysts say, they risk hurting the cache of their brands. That's what happened to Saks, which operates luxury chain Saks Fifth Avenue, after the Sept. 11 attacks, when deep cuts on designer goods hurt the retailer's tony image.

Another major worry is that retailers could lose the power to raise prices once the economy improves. The longer stores are forced to offer generous discounts, the more used to them consumers will get, and resist buying regular-price items later on.

"I have always been price conscious," said Mike Hogan, 30, a publicist for technology companies. The Columbus, Ohio, resident admitted that he has cut back even more in recent months because of the higher daily costs of food and gas, which leave less money for extras. He expects to spend about $350 on clothes this fall, about half of what he spent a year ago, and he doesn't think he'll resume splurging even if the economy recovers -- unless he received a big bump in pay.

CONT...

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"If it doesn't change for me, I can't understand why I would spend more," he added.

Hogan and other shoppers may have to wait a while: Many economists predict that the economy is unlikely to improve until at least well into next year. The latest batch of economic reports show consumers are still struggling to keep up with soaring living expenses. The Commerce Department reported Friday that personal incomes plunged in July, while consumer spending slowed significantly as the impact of billions of dollars in government rebate checks began to fade.

And despite a slight improvement in consumer confidence in August according to The Conference Board -- helped in part by lower gas prices -- the level is still near historic lows as shoppers worry about the job market and the housing slump.

The malaise is hurting all income levels, including more recently the affluent shoppers.

Saks told investors last month when it reported second-quarter earnings that it expects sales at established store to be anywhere from unchanged to down by low-single digit percentages for the second half of the year. Officials also noted that its high-end customers are now pulling back; previously, it was just aspirational customers retrenching.

But Saks is trying not to duplicate the mistake of slashing prices too much. Steve Sadove, chairman and CEO of the company, told investors last month, "I don't want us to repeat what happened five years ago or six years ago after 9/11 in terms of panicking and running. We feel very good about the assortments ... and we want to stay the course strategically."

That may be tough. Deborah Weinswig, an analyst at Citi Investment Research, noted in a recent note that she's worried that Saks' inventory levels at the end of the second quarter are high relative to recent sales trends and could hurt gross profit margins in the second half of the year.

Retailers overall are expected to report a 2 percent increase in same-stores sales for August on Thursday, with discounters like Wal-Mart and warehouse club operators such as Costco Wholesale Corp. expected to keep faring much better than the slumping apparel-based stores, according to the International Council of Shopping Centers-UBS index. Same-store sales are those at stores open at least a year, and are a key indicator of a retailer's health.

With no major fashion trend inspiring them to buy, shoppers are focusing on price and sticking to discounters even as mall-based clothing stores have been aggressively discounting. That's a big hurdle for the mall-based stores, Hess says. He noted that American Eagle's prices, with the deep discounts, are at least as good as those at Aeropostale Inc., a teen retailer that has benefited from the slow economy as it typically offers goods below American Eagle and other rivals. American Eagle's jeans, for example,are typically priced about 30 percent higher than those at Aeropostale.

Stores such as American Eagle, Hess said, are "struggling to get that value message."

Perhaps it would be a good time to short ZLC...

AP
Zale making changes to business, analyst says
Thursday September 11, 11:25 am ET
Following meeting, analyst says Zale still changing organization, marketing and products

NEW YORK (AP) -- While Zale Corp. is making changes to overhaul its business, one analyst said its turnaround plan still "requires a lot of things to click," following the jewelry retailer's analyst meeting.

Soleil Securities Group analyst Jeffrey Stein, who rates the stock "Hold," said Zale's plan involves changes to its organizational, marketing, merchandising and cost structure.

Zale has returned its focus on selling diamond jewelry to middle-income consumers. Earlier this year, the company revealed plans to cut more than 200 positions and close 105 stores in 2008 to save more than $65 million a year.

Stein, however, said Zale still faces some difficulties.

"We believe that the plan conveys a sense of urgency, but requires a lot of things to click in what could be the most challenging environment facing retailers in over a decade," Stein wrote in a client note.

Stein also noted a number of management changes, including Chief Executive Neal Goldberg, named in December. Stein said the company's new management team is experienced in the retail industry, but wondered how quickly these individuals can adjust to Zale.

Last month, Zale forecast a fiscal 2009 profit above analyst estimates, but warned that same-store sales may decline.

Shares rose 13 cents to $27.11 in morning trading.

Maybe not... ..

26.99 0.01 (0.04%)

AP
Earnings roundup: Zale, Chico's FAS
Tuesday November 25, 10:52 am ET
Earnings roundup: Zale posts loss, withdraws year guidance; Chico's profit sinks as sales sag

Among the earnings stories for Tuesday, Nov. 25, from AP Financial News:

DALLAS (AP) -- Zale Corp. said Tuesday it had a loss of $45.3 million in its fiscal first quarter and withdrew its profit guidance for the full year, saying it cannot reliably gauge how the all-important holiday shopping season will go.

FORT MYERS, Fla. (AP) -- Women's clothing retailer Chico's FAS Inc. said Tuesday its third-quarter profit plunged as the weak economy hurt sales.

ST. LOUIS (AP) -- Brown Shoe Co., which operates the Famous Footwear chain, said Tuesday third-quarter profit fell 62 percent, hurt by a slowdown in consumer spending.

COLUMBUS, Ohio (AP) -- Discount shoe retailer DSW Inc. said Tuesday fiscal third-quarter profit fell 41 percent on a drop in sales at established stores, but earnings results beat analyst expectations.

This sure has come down a lot from when I first profiled it.

Ouch:

3.03 -0.67 (-18.11%)

Binks...hook me up with a brief synopsis on what you think the chart may be foretelling there. Thanks!

Elaborate a teensy bit on what indicates oversoldness. That would help me immensely.