Zale Corp (NYSE:ZLC)

Slappster (93.02) Submitted: 10/8/2007 1:06:50 PM : Start Price: $25.78 ZLC Score: +79.01

Gotta agree with Dave and the CAPS consensus on this one. Blue Nile (and Mondera) both offer better product, customer service, education, and prices. Zale's products are grossly overpriced and largely cheap quality. The youngsters coming up buying engagement rings are internet savvy, and are going to realize this.

NetscribeRetail (95.38) Submitted: 5/31/2007 6:12:38 AM : Start Price: $27.18 ZLC Score: +81.10

While retail in general is showing signs of weakness, higher gas prices have directly impacted the discretionary income of the moderate customer impacting the third quarter earnings adversely. Given these overall macro trends, company has also lowered its sales projections. Besides it is also using third party to review the performance of its brands, which could lead to management changes or selling some chains.

The company, which operates its namesake stores and the Bailey Banks & Biddle, Gordon's and Piercing Pagoda chains, had warned previously that U.S. sales had suffered as snowstorms and icy weather preceding Valentine's Day had forced it to shut several stores. Hence for third quarter, revenues decreased by 2.9% to $511.9 million as comparable store sales decreased by 3.4%. Net loss totaled $3.06 million vs. a profit of $16 million due to the absence of benefit from settlement of retirement plan. Also its namesake brand and Piercing Pagoda have faced the softest sales so far in the fiscal fourth quarter, while the more upscale Bailey Banks & Biddle and Gordon's brands were off to a stronger start, but the increase in gasoline prices can have some impact on all or most of the divisions.

Jewelry is certainly not something that's a necessity. When people are cutting back, clearly they are cutting back on jewelry as opposed to things such as apparel, which are more of a necessity. Thus it makes the future of Zale more vulnerable. Moreover for Q4, the company itself projects comparable store sales decrease of 2-3% and EPS in the range of negative $0.11 to 0.15. Hence in the middle of all these conditions the company’s circumstance definitely does not seems to improve at least in the near future.

OneStarHero (< 20) Submitted: 5/27/2007 12:55:42 PM : Start Price: $26.77 ZLC Score: -81.98

They own all that expensive jewelry, they must be rich!

TMFMattyA (99.56) Submitted: 2/13/2007 10:23:48 AM : Start Price: $29.61 ZLC Score: +88.31

This company exhibits anemic growth rates, combined with a deteriorating balance sheet (higher debt and receivables and inventory levels that have outpaced sales growth); it operates in a brutally competitive market, mashed in the middle between high-end operators (Tiffany's) and low-end operators (Wal-Mart, Target), and the new wave of asset-light, low-working capital businesses such as successful Internet player Blue Nile; this company's stock can go anywhere, but it has little chance of outperforming the broader market over the long-term