". if you're offering me diamonds and rust, I've already paid." -- Joan Baez, "Diamonds and Rust"

What next? Zale (NYSE:ZLC) blew its Christmas selling season and sacked its CEO at the time. It has since received notice that the Securities and Exchange Commission would be investigating, jettisoned the chief operating officer, and recently put the chief financial officer on leave. Oh, and let's not forget the impact of higher fuel costs on shoppers' wallets and higher gold prices on its wallet.

Short of Godzilla stomping on its headquarters building, what else is left? And that's also about the best thing I can say about this quarter -- at least there were no Godzilla attacks.

Total sales were up a bit more than 2% in the third quarter, with same-store sales for the whole company up about 2.5%. While Zale did state that all units but Piercing Pagoda had positive comps for the period, it refused to give specific details -- citing "competitive reasons."

Pardon me, but that's total bull. In case you haven't noticed, Zale management, Blue Nile (NASDAQ:NILE), Wal-Mart (NYSE:WMT), and Signet (NYSE:SIG) have been collectively kicking your butt. Do you really think giving your owners a little extra data is going to change that dynamic? Does anybody out there in reader land think that same-store sales by brand really matter much relative to, oh I don't know, pricing, selection, and service?

Anyways, the gross margin stayed fairly stable, though net income was down about 20% from the year-ago period. And though management did state that the Mother's Day holiday (one of the major jewelry shopping events of the year) went well, guidance wasn't exactly robust.

The nicest thing I can really say about this company is that present valuation (even with today's spike) barely seems to give it credit for staying in business, let alone making any improvements. And I have to admit, before today's spike I did have this one on my watch list. After all, I've done well with retail turnaround stories in the past, and this one has a lot of the things I like: a good brand, a relatively clean balance sheet, and a business that really isn't heavily fad-oriented (the Italian charm stuff in Piercing Pagoda notwithstanding).

Now let's hope the board makes the right move on hiring a new CEO and letting that person do what needs to be done. This isn't a situation where adequate will do: Zale needs a good CEO with a good plan, and it needs to sit on its hands and let that plan work itself out.

All things considered, this is one that I'm still going to keep a careful eye on as a turnaround idea.

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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). He personally prefers the Judas Priest rendition of Diamonds and Rust.