Zale Surges on Earnings Beat, Reported Bid

Zale shares have advanced in premarket trading Wednesday after its earnings topped consensus estimates and on reports of a possible purchase of a stake in the jeweler by a private-equity firm.
Author:
Publish date:

DALLAS, Texas (

TheStreet

) --

Zale

(ZLC)

shares were higher in premarket trading Wednesday after reporting second-quarter earnings that beat consensus and on reports a private-equity firm may purchase a stake in the jeweler.

Zale shares rose 3.1% at $2.60 in premarket trading, and continued those gains during the early morning trading session, rising 7.2% to $2.75 by mid-morning.

Zale reported second-quarter earnings of $6.7 million, or 21 cents a share, compared with a year-earlier loss of $31.8 million, or $1 a share. Wall Street forecast earnings of 2 cents a share on revenue of $587.04 million.

Zale said its latest quarter had an income tax benefit of $12 million, compared with a tax expense of $7 million in the comparable period in the prior year.

Total revenue was $582 million, a 14.3% decrease from $679 million a year ago. Zale reported same-store sales during the quarter fell 11.2%.

Zale closed 187 retail locations since the end of January 2009, of which 28 were closed in the quarter.

Zale ended Tuesday's trading session up 27.4% at $2.60. The stock surged after

the Wall Street Journal

reported that private-equity firm

Apollo Management expressed interest in buying a stake in Zale.

On Wednesday, Zale said its board formed a committee of independent directors to review a "wide range of financing alternatives" and the board is at the initial stages of the process.

-- Reported by Andrea Tse in New York

RELATED STORIES:

>> Zale Surges on Apollo Bid

>>See our new stock quote page.

Follow TheStreet.com on

Twitter

and become a fan on

Facebook.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.