Zale surges on 3rd-quarter adjusted results

Zale Corp.'s stock jumped Thursday after its adjusted third-quarter results met analysts' estimates.

Earlier in the day, the specialty jeweler reported a quarterly loss of 42 cents per share, excluding income from discontinued operations. Revenue climbed 6 percent to $476.7 million.

Analysts surveyed by Thomson Financial expected a loss of 42 cents per share on sales of $457.9 million. Estimates typically exclude one-time items.

Jeffery Stein of Soleil Securities Group Inc. said that Zale's quarterly results met his revised expectations.

Zale "made significant progress in reducing inventories and cutting costs, paving the way for improving margins and expense leverage if new merchandising initiatives begin to take hold," the analyst wrote in a client note.

Still he said he'd prefer to stay on the sidelines until the discretionary spending outlook stabilizes.

The retail sector, and other industries, has been squeezed as consumers curb discretionary spending due to the ongoing housing slowdown, rising gas and food costs, diminishing credit and recession worries.

Stein reaffirmed a "Hold" rating on the shares.

Shares of Zale gained $2.53, or 13.6 percent, to $21.17. The stock has traded in a 52-week range of $12.48 to $29.22.