DALLAS (AP) — Zale surprised Wall Street with a quick return to a profitable third quarter and its shares spiked higher Wednesday.
Profits during the same period last year were eaten up by huge interest expenses, but analysts following the company were still anticipating a loss of a penny per share this quarter.
In afternoon trading, Zale shares jumped $1.09, or 20.2 percent, to $6.49 after peaking at $7.29 earlier in the day. Over the past 52 weeks, the shares have traded between $2.22 and $7.66.
CEO Theo Killion said business accelerated in March and April, following a slow February.
The company reported net income of $5.1 million, or 13 cents per share, compared with a loss of $4.5 million, or 14 cents per share, a year earlier.
Revenue edged down less than 1 percent to $442.7 million, but that also topped Wall Street estimates of $440 million, according to FactSet.
And revenue at comparable stores increased 1.4 percent, boosted by a 3 percent rise at Zales Jewelers and Zales Outlet stores.
Interest expense dropped 42 percent to $5.7 million, thanks to a debt refinancing.
Zale still anticipates a profit for the full fiscal year.
Also on Wednesday, Zale named Terry Burman as a director and as chairman of the board. John Lowe Jr., the company's chairman for the past five years, will remain on the board.