Zale Corporation (NYSE: ZLC) today announced that comparable store sales increased 5.9% for the combined months of November and December 2011, encompassing the entire holiday selling period. This increase follows an 8.5% rise in the same period last year. Within this two-month period, comparable store sales increased 10.1% in November and 4.2% in December. At constant exchange rates, which exclude the effect of translating Canadian currency denominated sales into U.S. dollars, comparable store sales increased 6.2% for the holiday selling period, compared to an increase of 7.6% in the prior year period.
Revenues for the two-month period were $564 million compared to $533 million in the same period last year, an increase of 5.8%. Revenues include approximately $10 million resulting from the change in warranty revenue recognition.
Holiday selling period comparable store sales detail:
- U.S. Fine Jewelry brands (~69% of annual revenues), consisting of Zales Jewelers, Zales Outlet and Gordon’s Jewelers, had an increase in comparable store sales of 9.0%. This increase follows a 7.5% rise in the same period last year.
- Canadian Fine Jewelry brands (~17% of annual revenues), consisting of Peoples Jewellers and Mappins Jewellers, had an increase in comparable store sales of 0.2%. This increase follows a 15.6% rise in the same period last year. At constant exchange rates, Canadian Fine Jewelry brands comparable store sales increased 1.7%, compared to an increase of 10.2% in the prior year period.
- Kiosk Jewelry (~14% of annual revenues) comparable store sales decreased 2.1%. In the same period last year, Kiosk Jewelry comparable store sales rose 4.2%.
For the quarter ending January 31, 2012, the Company expects gross margin to be consistent with the prior year quarter’s gross margin of 50.3%. Operating margin is expected to be slightly below the prior year quarter’s operating margin of 7.0% due to higher selling, general and administrative expenses primarily driven by the holiday advertising campaign and marketing for the launch of proprietary products.
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