NEW YORK – Jewelry chain owner Zale Corp. (ZLC) on Tuesday said fourth quarter earnings fell sharply on slack demand for its Zales brand merchandise.
Earnings for the quarter ended July 31 fell to $4.1 million, or 8 cents per share, from $6.9 million, or 13 cents per share, a year earlier.
Wall Street analysts on average forecast earnings of 8 cents per share, according to Reuters Estimates.
"The increases to sales and earnings in fiscal 2005 did not meet our expectations, particularly due to the underperformance of the Zales brand," Zale President and Chief Executive Mary Forte said in a statement.
The company said it is repositioning the Zales brand and plans to expand market share through different groups of brands. It also announced a $100 million stock repurchase program.
Revenue in the quarter rose 3.7 percent to $472.3 million, the Dallas-based company said.
The company also forecast fiscal 2006 earnings per share to increase 12 to 14 percent, including special items, from the $2.05 per diluted share reported in fiscal 2005.
Zale expects 2006 sales to increase 5 to 7 percent on a sales increase of 2.5 to 3.5 percent at stores open more than a year.
Zale also said it would close 30 to 35 of its Bailey Banks & Biddle (search) stores in an effort to improve brand performance. It expects to take a 25 cent-per-share charge in fiscal 2006.