Zale Corporation Reports Third Quarter Results.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. -- Zale Corporation “Zale” redirects here. For other uses, see Zale (disambiguation). Zale Corporation (NYSE: ZLC) is the second largest specialty retailer of fine jewelry in North America, operating over 2,300 retail locations, (which includes both kiosks/carts and stores) (NYSE NYSE See: New York Stock Exchange : ZLC ZLC Zero Length Column ZLC Zero Link Count ZLC Zero Loss Compaction ZLC Zero Level Correction ), the largest specialty retailer of fine jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , today reported net earnings of $16.8 million, or $0.35 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the third quarter ended April 30, 2006. This includes, on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. , (1) a benefit of $8.4 million, or $0.17 per diluted share, resulting from the settlement of certain retirement benefit obligations partially offset by (2) a charge for Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when of $2.2 million, or $0.04 per diluted share and (3) a charge of $0.9 million, or $0.02 per diluted share, related to the closing of certain Bailey Banks & Biddle Bid·dle , John 1615-1662. English theologian and founder of English Unitarianism who was several times imprisoned for his rejection of Trinitarian doctrine. locations. Excluding these items, third quarter earnings amounted to $11.6 million, or $0.24 per diluted share, exceeding prior guidance by $0.02. Last year's reported earnings amounted to $14.5 million, or $0.28 per diluted share. Total revenues for the third quarter increased by 2.2% to $526.9 million from last year's $515.6 million. Last year's total revenues included $10.6 million from certain Bailey Banks & Biddle stores which were closed in this year's second fiscal quarter. Excluding these stores, total revenues increased 4.3% over last year's $505 million. Third quarter comparable store sales increased 2.5%. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. total revenues increased 2.0% to $1.948 billion, from $1.911 billion for the comparable period last year. This includes $24.3 million and $39.5 million, for each year, respectively, from the closed Bailey Banks & Biddle stores. Excluding these stores, total revenues were $1.924 billion, compared to $1.871 billion last year, an increase of 2.8%. Year-to-date comparable store sales, which do not include the Bailey Banks & Biddle store closures, increased 1.1%. Year-to-date net earnings totaled $81.0 million, or $1.63 per diluted share. This includes, on an after-tax basis, (1) a $21.4 million charge, or $0.43 per diluted share, related to the closing of certain Bailey Banks & Biddle locations and (2) a charge for Chief Executive Officer and Chief Operating Officer severance of $7.6 million, or $0.16 per diluted share; this was partially offset by (3) a tax benefit of $11.5 million, or $0.23 per diluted share, related to income repatriated from Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of under the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act and (4) an $8.4 million, or $0.17 per diluted share, benefit resulting from the settlement of certain retirement benefit obligations. Excluding these items, year-to-date net earnings amounted to $90.1 million, or $1.82 per diluted share. For the same period last year, net earnings were $102.7 million, or $1.98 per diluted share. "We are pleased with our performance for the third quarter, especially the sales momentum we are gaining," commented Betsy Betsy is an English name for females, used as a nickname for Elizabeth. It is also a surname. Famous uses or users of Betsy include:
Australia
The Company also announced guidance for the fourth fiscal quarter, with comparable store sales expected to increase in the low to mid-single digits and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of to range between $0.00 and $0.02. As previously announced, a conference call will be held today at 9:00 a.m. Eastern Time. Parties interested in participating should dial 706-643-7467 five minutes prior to the scheduled start time. A webcast of the call, as well as a replay, will be available on the Company's Web site at www.zalecorp.com. For additional information, contact Investor Relations Investor relations The process by which the corporation communicates with its investors. . Zale Corporation is North America's largest specialty retailer of fine jewelry operating approximately 2,345 retail locations throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. . Through its ZLC Direct organization, Zale also operates online at www.zales.com and www.baileybanksandbiddle.com. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Bailey Banks & Biddle, Peoples Jewellers, Mappins Jewellers and Piercing pierce v. pierced, pierc·ing, pierc·es v.tr. 1. To cut or pass through with or as if with a sharp instrument; stab or penetrate. 2. To make a hole or opening in; perforate. 3. Pagoda. Additional information on Zale Corporation and its brands is available at www.zalecorp.com. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including statements regarding the Company's results of operations, including sales and earnings guidance for the fourth quarter of fiscal year 2006, and merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. and marketing strategies. Forward-looking statements are not guarantees of future performance and a variety of factors could cause the Company's actual results to differ materially from the results expressed in the forward-looking statements. These factors include, but are not limited to: if the general economy performs poorly, discretionary spending on goods that are, or are perceived to be, "luxuries" may not grow and may even decrease; the concentration of a substantial portion of the Company's sales in three, relatively brief selling seasons means that the Company's performance is more susceptible susceptible /sus·cep·ti·ble/ (su-sep´ti-b'l) 1. readily affected or acted upon. 2. lacking immunity or resistance and thus at risk of infection. sus·cep·ti·ble adj. to disruptions; most of the Company's sales are of products that include diamonds, precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. and other commodities, and fluctuations in the availability and pricing of commodities could impact the Company's ability to obtain and produce products at favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. prices; the Company's sales are dependent upon mall traffic; the Company operates in a highly competitive industry; changes in regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. or in the Company's private label credit card arrangement with Citi may increase the cost of or adversely affect the Company's operations and its ability to provide consumer credit and write credit insurance; acquisitions involve special risks, including the possibility that the Company may not be able to integrate acquisitions into its existing operations. For other factors, see the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended July July: see month. 31, 2005. The Company disclaims any obligation to update or revise publicly or otherwise any forward-looking statements to reflect subsequent events, new information or future circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
ZALE CORPORATION AND SUBSIDIARIES
CONSOLIDATED SELECTED FINANCIAL INFORMATION
(Unaudited, Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
April 30, April 30,
------------------- -----------------------
2006 2005 2006 2005
--------- --------- ----------- -----------
Total Revenues $526,895 $515,618 $1,948,283 $1,910,723
Comparable Store
Sales % 2.5 % 3.5 % 1.1 % 0.4 %
Cost of Sales 254,361 246,151 958,266 931,660
--------- --------- ----------- -----------
Gross Margin 272,534 269,467 990,017 979,063
% of Revenue 51.7 % 52.3 % 50.8 % 51.2 %
Selling, General and
Administrative Expenses 241,348 227,789 835,758 760,757
% of Revenue 45.8 % 44.2 % 42.9 % 39.8 %
Cost of Insurance
Operations 1,598 1,674 5,014 4,542
Depreciation and
Amortization Expense 14,935 14,953 44,798 44,184
Benefit from Settlement of
Retirement Benefit
Obligation 13,403 --- 13,403 ---
--------- --------- ----------- -----------
Operating Earnings 28,056 25,051 117,850 169,580
% of Revenue 5.3 % 4.9 % 6.0 % 8.9 %
--------- --------- ----------- -----------
Interest Expense, Net 2,449 1,558 7,685 5,990
--------- --------- ----------- -----------
Earnings Before Income
Taxes 25,607 23,493 110,165 163,590
Income Taxes 8,776 9,037 29,180 60,869
--------- --------- ----------- -----------
Net Earnings $ 16,831 $ 14,456 $ 80,985 $ 102,721
========= ========= =========== ===========
Basic Net Earnings Per
Share $ 0.35 $ 0.28 $ 1.65 $ 2.00
Diluted Net Earnings Per
Share $ 0.35 $ 0.28 $ 1.63 $ 1.98
Weighted Average Number of
Common Shares Outstanding:
Basic 47,914 50,895 49,066 51,302
Diluted 48,342 51,513 49,578 51,989
----------------------------------------------------------------------
Reconciliation of Non-GAAP Information to GAAP basis 3rd
Quarter, diluted:
Three Months Ended Nine Months Ended
April 30, 2006 April 30, 2006
------------------- -----------------------
Amount Per Share Amount Per Share
--------- --------- ----------- -----------
Earnings before certain
benefits and charges $ 11,566 0.24 $ 90,078 1.82
Settlement of
Retirement Benefit
Obligation 8,417 0.17 8,417 0.17
CEO and COO Severance
Charges (2,240) (0.04) (7,578) (0.16)
Bailey Banks & Biddle
Store Closing Charges (912) (0.02) (21,397) (0.43)
--------- --------- ----------- -----------
Earnings before Benefit
from Tax Repatriation 16,831 0.35 69,520 1.40
Benefit from Tax
Repatriation --- --- 11,465 0.23
--------- --------- ----------- -----------
Net Earnings $ 16,831 0.35 $ 80,985 1.63
========= ========= =========== ===========
----------------------------------------------------------------------
ZALE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET DATA
(Unaudited, Dollars in thousands)
Difference
April 2006 vs
April 30, April 30, April 2005
2006 2005 Amount Percent
----------- ----------- --------- -------
ASSETS
Current Assets:
Cash and Cash Equivalents $52,411 $66,782 $(14,371) -21.5%
Merchandise Inventories 938,050 926,798 11,252 1.2%
Other Current Assets 83,968 63,002 20,966 33.3%
----------- ----------- --------- -------
Total Current Assets 1,074,429 1,056,582 17,847 1.7%
Property and Equipment, Net 290,433 278,276 12,157 4.4%
Goodwill, Net 97,014 89,130 7,884 8.8%
Other Assets 34,824 33,961 863 2.5%
Deferred Tax Asset, Net --- --- --- ---
----------- ----------- --------- -------
Total Assets $1,496,700 $1,457,949 38,751 2.7%
=========== =========== ========= =======
LIABILITIES AND STOCKHOLDERS'
INVESTMENT
Current Liabilities:
Accounts Payable and
Accrued Liabilities $355,831 $373,894 $(18,063) -4.8%
Deferred Tax Liability,
Net 52,059 51,334 725 1.4%
----------- ----------- --------- -------
Total Current Liabilities 407,890 425,228 (17,338) -4.1%
Non-current Liabilities 21,176 39,075 (17,899) -45.8%
Non-current Tax Liability,
Net 4,538 5,616 (1,078) -19.2%
Long-term Debt 204,859 162,100 42,759 26.4%
Long-Term Accrued Rent 26,631 24,194 2,437 10.1%
Commitments and Contingencies
Stockholders' Investment:
Common Stock 538 530 8 1.6%
Additional Paid-In
Capital 109,618 82,145 27,473 33.4%
Accumulated Other
Comprehensive Income 37,392 19,306 18,086 93.7%
Accumulated Earnings 836,222 751,183 85,039 11.3%
Deferred Compensation (2,164) (1,428) (736) 51.5%
----------- ----------- --------- -------
981,606 851,736 129,870 15.2%
Treasury Stock (150,000) (50,000) (100,000) 200.0%
----------- ----------- --------- -------
Total Stockholders'
Investment 831,606 801,736 29,870 3.7%
----------- ----------- --------- -------
Total Liabilities and
Stockholders' Investment $1,496,700 $1,457,949 $38,751 2.7%
=========== =========== ========= =======
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion