Zale provides January sales

Zale Corporation ZLC, a leading specialty retailer of fine jewelry in North America, has reported that for the second quarter ended January 31, 2008, comparable store sales decreased 7.3%. Revenues for the second quarter were $827 million compared to $892 million last year, a decrease of 7.3%. As previously announced, the sale of Bailey Banks & Biddle was completed on November 9, 2007 and has been excluded from the results for both the current and comparable periods.

The Company commented that while it had a 5.7% January comparable store sales increase, approximately 3 percentage points were related to the timing of a Valentine’s Day customer appreciation event.

Year-to-date total revenues decreased 5.5% to $1.204 billion, compared to $1.274 billion for the same period last year. Year-to-date comparable store sales decreased 5.1%.

Unrecognized revenues related to warranty sales increased $33 million for the second quarter. Year-to-date, unrecognized revenues increased $47 million. This increase reflects the incremental cash collected and the future positive impact to earnings as a result of the previously announced change to the Company’s accounting method for its lifetime jewelry protection plans.

The Company stated that for the second fiscal quarter ending January 31, 2008 it continues to expect diluted earnings per share from continuing operations to be in the previously stated range of $1.08 to $1.13.

Zale Corporation will announce its second quarter 2008 earnings results on February 21, 2008.

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