Tuesday, November 24, 2009

Zale BEATS earnings estimates....by only losing $1.80 per share :( (ZLC)

What's that line from Major League?  "Well let's give him credit - at least he didn't spike himself!"

Jewelry concern Zale Corporation (ZLC) announced a loss of $1.80 per share for the quarter ended October 31st.  Shares are up over 2% today, as the street had expected a loss of over $2dollars per share.

The company claims to be pulling fixed costs out of its operating structure, but it's coming at a snail's pace.  Inventory looks a bit high to me given the pressures facing customers this holiday season, buyt management is undaunted:

We are encouraged that both sales and margin strengthened as the quarter progressed,” commented Neal Goldberg, Chief Executive Officer. “Importantly, we are well positioned to improve our Holiday execution and financial performance. Our merchandising initiatives have been tested, our stores are fully set and we have the inventory to deliver on our Holiday plans. We will not offer the same level of broad discounting this Holiday season as we did in 2008, which will help us expand our gross margin,” added Mr. Goldberg.

Hmm.  They won't budge on discounting, will they?  We'll see if that's preferable to forgoing desperately needed revenue and cash flow.

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