Wednesday, 1st September 2004 (4274 views)

North American fine jewelry retailer Zale Corporation has reported a 30 per cent increase in net earnings for the company's fourth quarter, before an unusual item in the prior year.

Net earnings stood at $6.9 million (£3.8 million) compared to $6.7 million (£3.7 million) for the same period last year including a $3.7 million (£2 million) debt redemption charge.

Net earnings for fiscal year 2004 were $106.5 million (£59.3 million), compared to net earnings, before unusual items, of $99.4 million (£55.4 million) for the prior fiscal year.

"We are very pleased with these financial results for both the fourth quarter and the fiscal year," said Mary Forte, president and chief executive officer of Zale.

"For the third consecutive year we generated in excess of $100 million (£55.7 million) in free operating cash flow as we generated $117 million (£65.2 million) in 2004 after capital expenditures. We continue to maintain a healthy balance sheet that provides substantial flexibility to pursue opportunities to extend our market leadership."

The company also provided its forecast for its fiscal year ending July 2005. For the full year, it currently expects revenue growth of five per cent to seven per cent, which includes a comparable store sales increase of 2 per cent to 3 per cent.

Zale plans to open 85 stores and 50 kiosks during the year. Operating margins are anticipated to increase 40 basis points with earnings per share growing 12 per cent to 14 per cent for the year. Free operating cash flow is again expected to reach $100 million (£55.7 million) for fiscal year 2005.

 

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