Zale Sees Sales Increase and Earnings Decrease

August 30, 2001

Zale Sees Sales Increase and Earnings Decrease

Zale Corp., North America's largest specialty retailer of fine jewelry, announced today its net sales increased 14% in fiscal 2001, which ended July 31. Net sales for the year reached $2.068 billion compared to $1.814 billion last year. Comparable store sales for the year fell 3.8%.

Earnings for the fiscal year, before unusual items and a non-recurring charge, were $100.5 million, down from $111.5 million last year. Including unusual items and the non-recurring charge, net earnings for the year were $82 million. Fourth quarter earnings for the company were also down. For the quarter ended July 31, earnings were $3 million compared to $11.6 million in the same quarter last year.

"The earnings for the year are a reflection of the difficulties within the business in the first half and the efforts of the last five months to get things back on track," says CEO Robert J. DiNicola. "Although this has been a demanding period, we are now well positioned to execute fiscal 2002."

"This will certainly be a challenging year ahead, but we are prepared and ready to capture our fair share of the market," says DiNicola

- by Julia M. Duncan