* Q3 loss 28 cents/share vs year-ago loss 38 cents
* Q3 same-store sales up 15.2 pct
* Shares rise 10.2 percent in premarket trade
(Adds background, share rise)
NEW YORK, May 25 Jewelry retailer Zale Corp
ZLC.N reported a smaller quarterly loss as increased spending
by middle-class shoppers for Valentine's Day and the start of
the bridal season mitigated the impact of rising silver and
Sales at established stores rose 15.2 percent for the
three-month period ended April 30, marking another quarter of
improvement after sharp sales declines during the recession.
Zale, whose chains include Zales in the United States and
Peoples Jewellers in Canada, said revenue rose 14.5 percent to
$411.8 million in the company's third fiscal quarter.
Gross margin fell 0.7 percentage point to 50.1 percent.
Its net loss shrank to $9 million, or 28 cents per share,
from $12.1 million, or 38 cents per share, a year earlier.
Zale, which competes most directly with Signet Jewelers
Ltd's (SIG.N) Kay Jewelers chain for middle-income shoppers,
struggled with liquidity problems during the recession, forcing
it to pull back on advertising and leading to market share
A year ago, private equity firm Golden Gate Capital loaned
Zale $150 million, allowing it to mend relations with
But rising gold, silver and diamond prices have emerged as
a new threat. In February, Zale executives said the retailer
would have little choice but to raise prices on some jewelry
starting in the spring.
Zale, the largest North American jeweler by store count,
operates about 1,870 locations, include stores, outlets and its
Piercing Pagoda chain of mall kiosks.
Zale shares were up 43 cents to $4.65 in morning trading.
Signet and upscale jeweler Tiffany & Co (TIF.N) are due to
report quarterly earnings on Thursday.
(Reporting by Phil Wahba; Editing by Derek Caney and John