Zale’s (NYSE:ZLC) narrowed its third-quarter loss on Wednesday and reported higher U.S. sales of fine jewelry, led by strong demand leading up to Mother’s Day.
Revenue for the three months ended April 30 was $445 million, up 8.1% from $412 million a year ago, ahead of average analyst estimates of $434 million in a Thomson Reuters poll.
Comparable-store sales – a key growth metric for retailers that only includes sales at stores open longer than a year – climbed 8% during the period, on top of a 15.2% rise last year.
Sales of fine jewelry at veteran stores in the U.S., which accounts for 70% of total sales, increased 10.9%, while Canadian fine jewelry, which sells in its Peoples Jewellers and Mappins Jewellers stores, grew 3.8%. Gross margin improved to 51.3% from 50.1% a year ago.
The Irving, Texas, jeweler cut its quarterly net loss in half to $4 million, or 14 cents a share, compared with $10 million, or 31 cents in the year-earlier period. The Street was expecting a loss of 16 cents.
Zale’s has not had a profitable year since the 12-months ended in July 2008. In the heart of the Great Recession, its sales softened as it underwent a liquidity crisis and had to borrow in 2010 $150 million from Golden Gate Capital.
The company says it will selectively close a small number of underperforming stores at lease expiration this year and is not focused on opening new stores in the near term.