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Zale Management Discusses Q3 2012 Results - Earnings Call Transcript

Also, please note that during this conference call, we may discuss certain non-GAAP financial measures as we review the company's performance. One of these non-GAAP measures is EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization. A second non-GAAP measure is adjusted EBITDA, which excludes charges related to store closures. We use these measures as part of our evaluation of the performance of the company. In addition, we believe these measures provide useful information to investors. Please refer to the appendix in the Investor Relations presentation for a reconciliation of these non-GAAP measures to the most comparable GAAP financial measures.

Now, I'll turn the call over to Theo.

Theophlius Killion

Roxane, thank you, and thank you to everyone joining us on the call today as we report our earnings for the third quarter. For those of you following along with the slides that we posted on our website, please direct your attention to Slide 3.

In our press release earlier today, we highlighted 4 important financial measures that underscore the progress we're making in executing our turnaround plan. They were a comparable store sales increase of 8%. This is our sixth consecutive quarter of comp store improvement and our sales results follow a 15% increase in the same period a year ago, resulting in a 2-year comp of plus 23%. Our plan is working. We have traction, and we're committed to not only returning the business to profitability in the near term, but returning long-term value to shareholders, who believe in our strategy and the work that we're doing to execute it.

Revenues increased $33 million for the quarter to $445 million. Gross margin improved $22 million to 51.3%. During the quarter, we implemented another price increase without adversely impacting sales. We believe that we're building equity in the Diamond Store with great product, and great guest engagement. This allows our jewelry consultants to focus on the features, benefits and quality of our assortment, not just price.

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