Zale (ZLC) posted an as-expected first-quarter loss and reaffirmed guidance for the second quarter.
The struggling Dallas-based jeweler lost $26 million, or 55 cents a share, for the quarter ended Oct. 31, compared with the year-ago loss of $24 million, or 47 cents a share. Sales rose to $432.5 million from $427.6 million a year earlier, as sales in stores open a year rose 0.4%.
Excluding the net impact of derivative vs. hedge accounting treatment, the latest-quarter loss was 45 cents a share. Analysts surveyed by Thomson Financial were looking for a 46-cent loss on sales of $432 million.
"Earnings performance met expectations for the quarter and comparable store sales were consistent with plan as we moved through clearance and increased transactions were offset by a lower average ticket," said CEO Betsy Burton. "We executed our plan for the quarter which included resetting all Zales stores with new and expanded assortments, clearing as much non-program merchandise as possible and making investments in payroll and inventory to prepare for a successful holiday."
The company reiterates its second-quarter guidance of comparable store sales growth of 3% to 4% and diluted earnings per share of $2.17 to $2.22, excluding the net impact of derivative vs. hedge accounting treatment.