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Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (10537)	5/22/2007 2:12:56 PM
From: Smiling Bob	Read Replies (1) \| Respond to of 19256

ZLC- starting too feel the pain. Amputation ahead Why mkt is up when every indicator and most retailers say consumer WILL put a heavy damper on economy baffles me Short @ 27.50 -- Zale Swings to a 3Q Loss of $3.1 Million Tuesday May 22, 12:21 pm ET By David Koenig, AP Business Writer Zale Swings to a Loss of $3.1 Million in the 3rd Quarter, Trims Fourth-Quarter Sales Outlook DALLAS (AP) -- Zale Corp. said Tuesday that it fell to a loss in its fiscal third quarter, and the fine jewelry retailer blamed high gasoline prices that left middle-class consumers with less cash to spend. Zale officials also said they have hired an adviser to review the performance of the company's jewelry chains. It could lead to management changes or the sale of some brands, officials said. For the three months ended April 30, the company lost $3.1 million, or 6 cents per share, compared with a profit of $16.8 million, or 35 cents per share during the same period last year. Results from the most recent quarter included costs of $6.9 million or 14 cents per share for a lifetime jewelry guarantee plan, and a gain of $1.6 million or 3 cents per share from derivative contracts. Excluding those items, Zale said it earned $2.2 million, or 5 cents per share. Analysts surveyed by Thomson Financial expected a loss of 10 cents per share. Thomson estimates usually exclude one-time charges and gains. Revenue fell 3 percent to $511.9 million from $526.9 million. Analysts expected $512.2 million. Same-store sales, a key measure in retailing, fell 3.4 percent from a year ago. "It's a challenging macro environment. Retailing and jewelry retailing in particular are tough," Chief Executive Betsy Burton said, and she blamed higher gasoline prices that are taking a bigger chunk of middle-class consumers' spending money. "Clearly they are cutting back in jewelry more than in things such as apparel, which is more of a necessity," she said. Burton said the cutback in consumer spending is hitting hardest at moderately price Zales Jewelers stores and Piercing Pagoda mall kiosks, while the more upscale Bailey Banks & Biddle chain is doing better. Zale trimmed its sales expectations for the May-July quarter to a decrease of 2 to 3 percent in same-store sales, compared with the company's previous forecast of flat sales to a gain of 1 percent. Same-store sales, or sales at stores open at least a year, measure growth at existing stores and exclude the impact from opening new ones. Zale, however, stood by its forecast of May-July earnings of 11 to 15 cents per share. Excluding special items, the company predicts a loss of a penny to 5 cents per share. Analysts had expected a loss of 17 cents per share. Burton told analysts during a conference call that the company has hired an outside adviser to review its portfolio of 2,300 stores under several brands, which include Gordon's Jewelers, Peoples Jewellers and Mappins Jewellers. She said the review could lead to changes in management or even the sale of some chains. She declined to identify the adviser. Zale is also struggling to whittle down an inventory glut, including clearance items that stores are trying to sell without cannibalizing sales of other merchandise. The company is selling some of the excess at outlet stores and locations in Canada. Shares of Zale fell 35 cents to $27.25 in midday trading.