Zale Corp (NYSE:ZLC)

Wow, quite a run-up based on "we're not losing money as fast as we used to". Still can't make their interest payments.

What is going on here?

omgwtfbbq spiking for no reason.

Zale is not covering interest payments. Competition from better product means revenues won't jump any time soon.

Zales was founded in 1924, so for a company that is over 80 years old I really don’t think we are going to see a bankruptcy in the near future. The stock right now is cheap around $3.24. I think this is a good time to buy, and just ride it out through the recession. I don’t like the quick ratio at .10 and know that it is a gamble, but the current ratio looks good at 2.0. I say, get it why its cheap and hold on for a long term ride.

Price to book Value < 1.0. Coming off 52 week lows. Great upside potential + possible buyout candidate of $5 to $6 per share.

With a high beta of 3.2 Zale Corp is well positioned to come back to its pre-recession highs assuming the economy continues on its upward path.

Weak competitor in a very competitive industry. More debt than I am comfortable with most small cap having on their balance sheet and alot of negative earnings.

Low end jewelry retailer. Unemployment in the US at a record high. US economy not recovering. Congress fighting over raising the debt ceiling. Greece staring default as well as the rest of the PIIGS. The entire EU looking shaky. None of this bodes well for a good Christmas. And it certainly doesn't sound like Dad is about to buy a bunch of jewelry for Mom. I don't see the forward growth for this company.

Here's an inside perspective. As a former employee of Sterling I can tell you that Kay and JBR were used as a tag team to keep Zale underwater at comparative locations. On the surface the strategy doesn't seem like a good one (2 stores selling exactly the same merchandise at exactly the same price only a few hundred feet from one another), but it seems to have worked.

As Zale continues to struggle Sterling is closing JBR locations nationwide. They no longer fear them as a competitor. This, in my opinion, is the worst form of a no confidence vote, when your competitors feel safe enough to wait for the bankruptcy because you are so deep in you can't get out.

VERY LONG

..

Cost of financing with Golden Gate is way too high. Debt on top of debt with no profit margins will only result in almost certain BK.

I don't see Zales making it past Christmas with the economy in an extended malaise.

strong buy

Low end luxury targeted market still hardest hit by current economic conditions. Relvoving door upper manangement prevents any continuity of marketing and operational strategy. Company management beating up store and operations staff over performance resulting in disasterous morale problems.

Struggling but jewelry inventories hold value unlike real-estate, other investments. Possible BK or takeover. I don't see the demand for wedding rings drastically changing. Recovery=more wealth, income=more sales.

Zale has sunk so much with the recession (and poor earnings to go with it) that barring bankruptcy (which won't happen) there is nowhere to go but up. With many underperforming stores eliminated, the operating margin has improved already. This will be a 10-20 dollar stock again in the future.

Zsa Zsa Gabor suxs