Zales Corporation

(AP) Diamond retailer Zale Corp. said its net loss shrank in its most recent quarter and posted a double-digit revenue gain despite increasing costs for gold, silver and diamonds.

Zale's revenue tumbled during the recession, hurt by tight credit and high unemployment. It has closed hundreds of stores over the past few years and shuffled top management. The company said in February that its Christmas holiday quarter had marked a turning point because a key sales measure turned positive, rising 7.9 percent.

That statistic excludes revenue growth in stores that have opened or closed in the past year. In the February-April quarter, revenue in sales open at least a year accelerated, climbing 15.2 percent compared to a decrease of 2.2 percent during the same months a year ago.

The improvement helped push up overall revenue 14.5 percent in the three months that ended on April 30, to $411.8 million from $359.8 million last year. That topped analyst expectations of $392 million.

"We continue to make progress in our multi-year initiatives to return the company to profitability," SCEO Theo Killion said in a statement.

Zale posted a net loss for the three months that ended on April 30 of $9 million, or 28 cents per share, compared to $12.1 million, or 38 cents per share, in its fiscal third quarter last year. Analysts had expected a far deeper loss of 58 cents per share.

The company managed to shrink its loss despite rising prices for the diamonds, gold and silver used in its jewelry, which weighed on gross margins. Zale started raising some prices last month and plans to increase prices across North America during the May-July quarter.

The jewelry chain is based in Dallas and has about 1,845 stores and kiosks in the U.S., Canada and Puerto Rico. It operates Zales stores as well as its Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda chains.

( Source: Associate Press )