Summary
Zale Corp posted a 5.8-percent increase in third-quarter same-store sales, boosted by markdowns, but said it expected a loss in the period as gross margins were hurt by those markdowns. Total sales for the quarter, which ended on Apr. 30, rose 6.3 percent to $477 million. Do we know what advantages Zale has taken by taking these steps.
Analysis
Zale Corporation's clearance strategy boosted sales in third quarter -- and the company expects promotional activity to intensify next quarter, creating additional gross margin compression.
For the retailer's third quarter, which ended April 30, 2008, same store sales rose 5.8 percent; total sales rose 6.2 percent to $477 million. Earnings will be released later, but Zale estimated loss per share from continuing operations to be in the range of 40-cents to 45-cents during the quarter.
Year-to-date revenues have fallen 2.4 percent to $1.68 billion, and comparable store sales are off by 2.3 percent. Unrecognized revenues related to warranty sales increased $17 million for the third quarter. Year-to-date, unrecognized revenues increased $64 million.
Zale tolds that sales were fueled primarily by an aggressive clearance strategy that exceeded our expectations with $55 million of inventory liquidated in the third quarter. This clearance strategy is critical for us to achieve our goal of becoming clearer in our product offering and more effective in differentiating the good, better, best value proposition.
This all because Zale has studied the US retail market very clearly. And this is all because of higher prices of basic needs items. People are moving towards discount stores for thier needs which shows Luxury Sector will going to affect badly and by doing this clearance strategy sale Zale has tried to acheive its Sales target for the quarter as well as to attract more and more customers to thier stores.
And Zale also working towards permanently reducing its inventory by $100 million plus beacuse we all know US sector is struggling financialy also.
