Dallas – Zale Corp. reported net earnings of $9 million in the third quarter of fiscal 2014, an impressive 80% jump from $5 million a year earlier. This soaring growth came even as revenues slipped 3% to $431 million, from $443 million.
A lower cost of sales and higher pretax earnings and operating earnings helped boost Zale’s net earnings. Zale cited the net decrease of 78 stores compared to the prior year and a decline in the Canadian exchange rate, partially offset by same-store sales growth of 1.9%, as driving down revenues.
Zale has also sent a letter to TIG Advisors, a hedge fund that has been openly opposing Zale’s proposed merger with Signet Jewelers. The letter stated that Zale believes the $21 per share Zale shareholders will receive reflects fair market value, financial targets of the transaction are achievable, and that Zale shareholders will obtain long-term value. Zale has scheduled a special meeting of stockholders for Thursday, May 29 to vote on its proposed acquisition by Signet.