Here we go again, folks.
Jewelry retailer ZaleCorp.
In line with guidance handed out earlier this month, sales were up about 1%, while comp-store sales dropped a bit more than 1%. While management didn't go into exceptional detail, it would appear that Zales and Piercing Pagoda were the weaker performers of the bunch, with Zales seeing a high-single-digit drop in average transaction size.
The company doubled its operating and net losses on an as-reported basis, although eliminating expenses tied to the closure of 30 Bailey Banks & Biddle stores changes the picture a bit. Backing out those $5 million or so in expenses means that the net loss was just 69% higher for the quarter instead of 116%. Yee-hah.
As mentioned, management wants to write the poor performance this quarter off to difficulties in "repositioning the Zales brand." That's classic management-speak. And while they said they now believe that customers see appreciable differences in the stores, having just been to my local mall, I can say that I do not see any such appreciable changes. The jewelry stores all still look more or less the same -- modestly lit so as to enhance the "bling" factor and staffed with desperate salespeople in suits who will pounce the minute you get within a yard of a display case.
And people wonder why online jewelry retailer Blue Nile
I'll still concede that Zale Corp. could turn this around. The brand is well-known, debt is under control, and expectations seem to be pretty low nowadays. Certainly this holiday season will be important, as it is for all retailers. But I do think shareholders still have a reason to wonder why financial performance has been so mediocre in such a healthy time for retail spending.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).