Why Zale Shares Sparkled
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What: Shares of Zale were looking stunning today, climbing as much as 30% after the jewelry retailer posted its first full-year profit since 2008.
So what: Zale, which was punished along with other jewelry retailers by the financial crisis, said that sales ticked up 2.5% to $417.1 million on a companywide same-store sales increase of 5.6%. At its flagship chain, Zales, comparable sales went up 8.1%. The retailer still posted a loss for the quarter of $0.25 per share, but that beat estimates of a $0.33 loss, while sales also topped expectations as analysts had expected revenue of just $409 million.
Now what: Today's report was as much about the long-term turnaround story as it was the earnings beat. Zale shares have now tripled in the last six months, and the company took additional steps toward recovery by lowering its debt burden nearly 10% in the past quarter to $410 million and closing down underperforming stores to help drive profitability. The company appears to be well on its way to full health, and shares should continue to move higher if it can maintain its strong level of organic sales growth.
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The article Why Zale Shares Sparkled originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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