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Zale Reports Rise in 2Q Earnings

February 16, 2002

DALLAS (AP) _ Zale Corp., the largest U.S. jewelry retailer, said Friday its fiscal second-quarter profit rose 33 percent from a year ago, helped by cost-cutting and holiday sales.

Zale said its net income in the quarter ended Jan. 31 rose to $95 million, or $2.70 per share, from $72 million, or $2.07 per share, a year earlier.

Excluding a gain from changing its retiree medical plan, Zale said it would have earned $93 million, $2.64 per share, matching the forecast of analysts surveyed by Thomson Financial/First Call.

Sales increased 4 percent from a year earlier, to $893 million. Sales at stores open at least a year rose 1.4 percent, Zale said.

Chairman and chief executive Robert DiNicola said he was satisfied with the company’s performance during one of the weakest holiday seasons in memory. He said the company clamped down on inventory and other costs to boost earnings.

The holiday period is traditionally the strongest quarter for jewelers. Analysts expect Zale to earn a more-modest 17 cents and 22 cents per share in the next two quarters.

Zale, based in the Dallas suburb of Irving, operates more than 2,300 stores under the Bailey Banks & Biddle, Gordon’s, Zales Jewelers, Peoples Jewellers and Piercing Pagoda names.

In trading Friday, Zale shares fell $1.80, or 4.1 percent, to $42.10.

For the first six months of the fiscal year, Zale earned $133 million, or $2.61 per share, compared to $76 million, or $2.17 per share in the same period a year earlier. Sales edged up to $1.3 billion from $1.23 billion.

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On the Net:

http://www.zales.com

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