Edit Symbol List
Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages.
Don't know the stock symbol? Use the
Symbol Lookup tool.
Alphabetize the sort order of my symbols
Investing just got easier…
Sign up now to become a NASDAQ.com member and begin receiving instant notifications when key events occur that affect the stocks you follow.Access Now X
Q1 2012 Earnings Call
November 21, 2011 5:00 pm ET
Thomas A. Haubenstricker - Chief Financial Officer and Senior Vice President
Matthew W. Appel - Chief Administrative Officer and Executive Vice President
Theo Killion - Chief Executive Officer, President and Director
Roxane Barry - Director of Investor Relations
William R. Armstrong - CL King & Associates, Inc.
Rick B. Patel - BofA Merrill Lynch, Research Division
David Wu - Telsey Advisory Group LLC
Previous Statements by ZLC
» Zale's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Zale's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Zale's CEO Discusses Q2 2011 Results - Earnings Call Transcript
Good afternoon, and thank you for joining is for the Zale Corporation First Quarter Fiscal 2012 Conference Call. I'm Roxane Barry, Director of Investor Relations. On the call today are Theo Killion, our Chief Executive Officer; Matt Appel, Chief Administrative Officer; and Tom Haubenstricker, Chief Financial Officer.
We have posted a slide presentation for today's call on the Investor Relations homepage on our website, zalecorp.com. Before we begin, I'll read our Safe Harbor statement.
Our commentary and responses to your questions on this conference call will contain forward-looking statements, including statements relating to our future goals, plans, and objectives. These forward-looking statements are not guarantees of future performance and a variety of factors could cause our actual results to differ materially from the anticipated or expected results expressed in these forward-looking statements.
Additional information concerning other factors that could cause actual results to differ materially from those contained in the forward-looking statements is available in our annual report on Form 10-K for the fiscal year ended July 31, 2011. Also please note that during this conference call, we will discuss certain non-GAAP financial measures as we review the company's performance.
One of these non-GAAP measures is EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization. A second non-GAAP measure is adjusted EBITDA, which excludes charges related to store closures. We use these measures as part of our evaluation of the performance of the company. In addition, we believe these measures provide useful information to investors. Please refer to the appendix within the Investor Relations presentation for reconciliation of these non-GAAP measures to the most comparable GAAP financial measures.
I'll now turn the call over to Theo.
Thank you, Roxane, and good afternoon. Before I begin discussing the business in the quarter, I'd like to acknowledge and welcome Tom Haubenstricker, who Roxane mentioned during her introduction. Tom joined the company in October as Chief Financial Officer. He brings a broad range of finance, accounting and operational skills to Zale. He's a proven leader whose background includes rigorous financial management in turnaround situations. Most recently, Tom was a managing director at Turnberry Advisors and before that, he spent 24 years at Electronic Data Systems in a variety of finance and strategy leadership roles.
Other recent senior leadership appointments include Brad Furry, who joined us in September as Senior Vice President, Chief Information Officer; and Subha Ramesh, who came on board in late October as Senior Vice President of Real Estate. Brad has over 25 years of experience in leading and leveraging information technology in order to support and enhance business objectives. His 21 years of retail experience at Neiman Marcus Group will be invaluable, as we thoughtfully invest in our information technology infrastructure.
As we evolve our real estate strategy from one of primarily divesting to one focused on maintaining and growing our portfolio, Subha Ramesh is the right executive at the right time. She joins us from Hilco Real Estate, where she was a Senior Vice President. And before Hilco, she spent 8 years at Limited Brands, managing a diverse real estate portfolio across multiple divisions.
With over 25 years of experience, Subha will help us to frame and execute a multiyear plan for fleet optimization and growth. Tom, Brad and Subha join Jeannie Barsam, Senior Vice President Merchandise Planning and Allocation; and Toyin Ogun, Senior Vice President Human Resources and Customer Service, both of whom joined Zale earlier this year.
With the addition of these accomplished executives, we can accelerate building the skills, infrastructure and capabilities necessary for creating a strategic framework for long-term growth. Welcome, Tom, Brad and Subha.
Now I'd like to talk about our business results. For those of you following along on the slides that we posted on our website, you can reference my comments beginning on Slide 3. Today we reported a comparable store sales increase of 5.8%, representing our fourth consecutive quarter and 13th consecutive month of positive comps. The 300 basis point improvement in gross margin to 53.5% and the gross margin dollar increase of $22.6 million is a reflection not only of the price increases that we took in July and October, but an ongoing discipline to resist promotions or discounting that aren't a part of our plan for marketing approach that supports our financial objectives. The quarterly results that we reported underpin the work that we've been doing to stabilize the business and return to profitability.
Today our core merchandise assortment is at 85%. It's comprised of product that is predictable and replenishable. Product that reflects category margin and turning characteristics in line with or above category averages. Having achieved our stated goal, we will continue to manage and grow the core not by increasing penetration, but by continually testing new products and introducing new product if it exceeds our margin and turn requirements, or if it augments or elevates our core assortment.