Zale Corporation, North America's largest specialty retailer of fine jewelry,reported that comparable store sales increased 0.9% for the combined months of November and December 2005, encompassing the entire holiday selling period.
Comparable store sales exclude the results of the 29 Bailey Banks & Biddle stores previously announced as designated for closure that were managed by an independent liquidator during the period.
Total revenues for the two-month period, also excluding the store closures, were $861 million compared to $844 million last year, an increase of 2.0%. Total revenues for the two-month period, including the store closures, were $873 million compared to last year's revenues of $861 million for the period, an increase of 1.4%.
Comparable store sales accelerated during the two-month period. November comparable store sales decreased approximately 6% while December comparable store sales increased over 3%.
Gordon's Jewelers, Bailey Banks & Biddle Fine Jewelers, Zales Outlet, and Zale Canada (Peoples Jewellers and Mappins Jewellers) each achieved a 6% or greater comparable store sales increase for the two-month period while Zales Jewelers and Piercing Pagoda combined for a comparable store sales decline of approximately 4%.
The Company expects gross margins for its second fiscal quarter ending January 31, 2006, for its ongoing business to increase 70 to 90 basis points over the same period last year.
Based on the current sales performance and expected gross margin improvement, the Company expects diluted earnings per share for the second quarter to range between $2.08 and $2.13 including an income tax benefit of approximately 20 cents per diluted share for the potential repatriation of foreign earnings under the American Jobs Creation Act. This range does not reflect the impact of the Bailey Banks & Biddle store closings.