Zale holiday quarter sales, profit better than expected
Feb 21 (Reuters) - Zale Corp on Thursday posted a better than expected holiday quarter profit, as sales rose at its flagship chain and it cut selling and administrative costs.
Net profit rose to $41.2 million, or $1.02 per share for the second quarter ended Jan. 31, compared with $28.8 million or 77 cents per share a year earlier. That was 3 cents better than Wall Street analysts were expecting, according to Thomson Reuters I/B/E/S.
Zale restated its forecast that it will return to profit for the fiscal year ending in late July. Zale has lost money on an annual basis for several years.
Selling, general and administrative were down to 41.6 percent of sales, from 42.5 percent a year earlier, and the company continued to benefit from a debt refinancing last year which lowered its interest expense.
Same-store sales rose 2.8 percent, led by a 3.6 percent jump at Zales and Zales Outlets, its biggest business by far.
In Canada, where it operates Peoples Jewellers, same-store sales rose 3.8 percent. But because of unfavorable exchange rates, that came to a 0.5 percent increase in U.S. dollar terms.
At its Piercing Pagoda chain of mall-based kiosks, which generate about one-sixth of company revenues, same-store sales rose 1 percent.
The company said overall revenue rose 1 percent to $670.8 million.