January 06, 2005 07:01 ET

Zale Corporation Announces Results for the Holiday Selling Season




JANUARY 6, 2005 - 07:01 ET

Zale Corporation Announces Results for the Holiday
Selling Season

DALLAS--(CCNMatthews - Jan 6, 2005) -

Zale Corporation (NYSE:ZLC), North America's largest specialty retailer
of fine jewelry, today reported that comparable store sales decreased
0.7% for the combined months of November and December 2004, encompassing
the entire holiday selling period. Total revenues for the two-month
period were $861 million compared to last year's revenues of $843
million for the period, an increase of 2.1%.

"While we are disappointed with our overall holiday sales results, they
are not reflective of the performance at most of our brands," commented
Mary L. Forte, President and Chief Executive Officer. "Our largest
brand, Zales Jewelers, under performed and thus had a significant impact
on our consolidated results. Our remaining brands all had positive
comparable store sale increases and performed at or close to our
original guidance expectations for the quarter."

The Company indicated that it now expects comparable store sales to be
flat to down 1% for its second quarter, ending January 31, 2005. Based
on these current sales trends, the Company expects diluted earnings per
share for the second quarter ending January 31, 2005 to range between
$1.88 and $1.91, compared to $1.83 in the same period last year.

Zale Corporation is North America's largest specialty retailer of fine
jewelry operating approximately 2,360 retail locations throughout the
United States, Canada and Puerto Rico, as well as online. Zale
Corporation's brands include Zales Jewelers, Zales Fine Jewelry Outlet,
Gordon's Jewelers, Bailey Banks & Biddle Fine Jewelers, Peoples
Jewellers, Mappins Jewellers and Piercing Pagoda. Through its ZLC Direct
organization, Zale also operates online at and Additional information on Zale Corporation
and its brands is available at

This release contains forward-looking statements, including statements
regarding the Company's sales and earnings estimates for the second
quarter ending January 31, 2005 which are based upon management's
beliefs as well as on assumptions made by and data currently available
to management. These forward-looking statements are not guarantees of
future performance and a variety of factors could cause the Company's
actual results to differ materially from the anticipated or expected
results expressed in these forward-looking statements. The following
list, which is not intended to be an all-encompassing list of risks and
uncertainties affecting the Company, summarizes several factors that
could cause the Company's actual results to differ materially from those
anticipated or expected in these forward-looking statements: if the
general economy performs poorly, discretionary spending on goods that
are, or are perceived to be, "luxuries" may not grow and may even
decrease; the concentration of a substantial portion of the Company's
sales in three, relatively brief selling seasons means that the
Company's performance is more susceptible to disruptions; most of the
Company's sales are of products that include diamonds, precious metals
and other commodities, and fluctuations in the availability and pricing
of commodities could impact the Company's ability to obtain and produce
products at favorable prices; the Company's sales are dependent upon
mall traffic; the Company operates in a highly competitive industry; any
failure by the Company to manage its inventory effectively will
negatively impact sales and earnings; because of the Company's
dependence upon a small number of landlords for a substantial number of
the Company's locations, any significant erosion of the Company's
relationships with those landlords would negatively impact the Company's
ability to obtain and retain store locations; changes in regulatory
requirements relating to the extension of credit may increase the cost
of or adversely affect the Company's operations; any disruption in, or
changes to, the Company's private label credit card arrangement with
Citi may adversely affect the Company's ability to provide consumer
credit and write credit insurance; acquisitions involve special risks,
including the possibility that the Company may not be able to integrate
acquisitions into its existing operations; and certain other factors
described from time to time in the Company's filings with the Securities
and Exchange Commission, including the Company's Annual Report on Form
10-K for the fiscal year ended July 31, 2004. The Company disclaims any
obligation to update or revise publicly or otherwise any forward-looking
statements to reflect subsequent events, new information or future


Contact Information

    Zale Corporation
    David H. Sternblitz, 972-580-5047