Zale Corporation announced a net loss of $3.1 million or $0.06 per share for the Company's third quarter ended April 30, 2007. This loss includes, on an after-tax basis, a reduction of $6.9 million, or $0.14 per share due to the decline in revenue recognized from the change to a lifetime jewelry protection plan and a benefit of $1.6 million, or $0.03 per share for the net impact of derivative versus hedge accounting on its gold and silver contracts. Excluding these items, the Company reported earnings of $2.2 million, or $0.05 per diluted share.
For the same period last year, the Company reported net earnings of $16.8 million, or $0.35 per diluted share. This included, on an after-tax basis, (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 severance 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 locations. Excluding these items, third quarter earnings in 2006 amounted to $11.6 million, or $0.24 per diluted share.
Revenues for the quarter ended April 30, 2007 were $511.9 million compared to $526.9 million last year, a decrease of 2.9%. Revenues recognized were $8.7 million or 1.7% less than prior year as a result of the change made in the method of amortizing jewelry protection plan sales. Comparable store sales for the third quarter decreased 3.4%.
Year-to-date revenues were flat at $1.95 billion, compared to the same period last year. Excluding revenues of $24.3 million related to Bailey Banks & Biddle store closures in the second quarter of last year, year-to-date revenues increased 1.3%. Year-to-date comparable store sales decreased 0.1%.
Year-to-date earnings totaled $58.6 million or $1.20 per diluted share. These earnings treat forward commodity contracts as derivatives under SFAS 133 and reflect the change in revenue recognition for jewelry protection plans as a result of the change in the product sold during the year.
marketing@alchempro.com
