Zale Corp. has declared cautious measures to offset the disappointing sales and net profit results it accounted during 2007. Referring to the second quarter ended January 31, 2008, Zale’s net profit declined by 31% to $60.83 million, jewellery sales fell sharply, while revenues slipped by 7.2% to $827.8 million. Considering the first six months of the fiscal year, net profit was lower by 47% to $32.47 million, and revenues by 5.3% to $1.2 billion.
Zale president and chief executive officer Neal Goldberg said that the company is ready to remedy this situation with reduction of $100 million in excess inventory. Through fiscal 2008, he said the company expects gross margin to decrease by about 5 percent. The decline would be compensated by the positive impact on free cash flow.