Zale Reduces Losses - $28.5 million for Q4

(IDEX Online News) - Zale Corporation posted a net loss of $28.5 million for the fourth quarter ended July 31. For the fiscal year, the embattled jeweler sustained a net loss of $94 million, compared to a net loss of $190 million in fiscal 2009.

Zale ended a tough year, during which it did not have a permanent CEO for about six months and it was it least partially occupied by attempts to salvage its private credit card program.

The reduced loss, Zale had a net loss of $89.8 million in the fourth quarter of the prior year, was partially achieved by cutting costs by $10 million to $197 million.

Revenues for the quarter decrease 3.4 percent to $345 million and same store sales decreased 2.1 percent compared to a decrease of 21.2 percent in the fourth quarter of the prior fiscal year. Gross margin on sales increased to 52.7 percent, mostly due to less discounts and to a $13.5 million inventory impairment recorded in the fourth quarter of 2009.

For the fiscal year, revenues were $1.62 billion, a decrease of 9.2 percent compared to fiscal 2009. Same store sales decreased 6.6 percent.

On an annual basis, the company reduced selling, general and administrative expenses by approximately $88 million, or 9.4 percent, to $846 million.

The retailer’s inventory at the end of the fiscal year is valued at $703 million, a decrease of $37 million from last year, mainly due to store closures. The company’s outstanding debt is $296 million.

“Earlier this year, we began executing our multi-year turnaround strategy," said CEO Theo Killion. "Our results, which show significant progress year over year, also serve as an objective reminder of how far we need to go to reach our ultimate goal; profitable revenue growth.”