Zale Q3 Comparable Store Sales Increase 2.5%

Zale Corporation, North America's largest specialty retailer of fine jewelry, has announced that for the third quarter ended April 30, comparable store sales increased 2.5 percent. Total revenues for the period were $527 million compared to last year's third quarter revenues of $516 million, an increase of 2.1 percent.

Last year's total revenues include the results of the Bailey Banks & Biddle stores that were closed in the second fiscal quarter, which accounted for $11 million of the Company's revenues. Excluding these store closures, total revenues increased 4.4 percent over last year's $505 million.

Year-to-date total revenues increased 1.9 percent to $1.948 billion, compared to $1.911 billion for the same period last year. Year-to-date total revenues include $24 million this year and $40 million last year from the closed Bailey Banks & Biddle stores. Excluding the store closures, total revenues were $1.924 billion, compared to $1.871 billion for the same period last year, an increase of 2.8 percent. Comparable store sales, which exclude the store closures, increased 1.1 percent for the same period.

"We delivered results in line with our expectations for the quarter," commented Betsy Burton, Interim CEO. "While sales increased slightly above plan, this was offset by a gross margin reduction primarily due to increased promotional and clearance sales at the Zales brand. We will continue to make an effort to move through product that will not be part of our go-forward assortment in a controlled yet effective manner."

Zale Corporation will announce its third quarter fiscal 2006 earnings results on May 17.