Shares Zale (NYSE:ZLC) surged nearly 16% on Wednesday after the jewelry retailer revealed a sharply higher second-quarter profit and its first sales gain in several periods, as the company continues to implement its multi-year overhaul.
The Irving, Texas-based company posted net earnings of $27.2 million, or 73 cents a share, up four-fold from $6.7 million, or 21 cents a share, in the same quarter last year, missing average analyst estimates polled by Thomson Reuters of $1.27 a share.
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The company’s improvement is a reflection of Zale’s turnaround initiatives, which it implemented following disappointing sales over several years as consumers shied away from luxury spending during the slumped economy.
“Our financial performance for the critical second quarter reflects the collaborative efforts of our total organization focusing on one objective – delivering a successful holiday,” Zale CEO Theo Killion said in a statement. “In doing so, we’ve taken an important step towards our goal of returning to profitability.”
Revenue for the operator of jewelry chain stores was $626 million, up 7.6% from $582 million a year ago, helped by a 7.9% increase in comparable store sales, on top of a decrease of 11.2% from the year-earlier period. Wall Street expected revenue of $624 million.