Zale Announces First Quarter Sales Results

    DALLAS, November 8 /CNW/ - Zale Corporation (NYSE:  ZLC), a leading
specialty retailer of fine jewelry in North America, today reported that for
the first quarter ended October 31, 2007, comparable store sales decreased
0.4%. Revenues for the first quarter were $378 million compared to last year's
revenues of $382 million, a decrease of 1.2%. These amounts exclude revenues
from the Bailey Banks & Biddle stores. As previously announced, the Company
entered into a definitive agreement to sell Bailey Banks & Biddle to Finlay
Fine Jewelry Corporation and expects to complete the transaction in the near
future. Including Bailey Banks & Biddle, comparable store sales decreased 0.3%
and revenues for the first quarter were $428 million compared to last year's
revenues of $432 million, a decrease of 1.0%.

    Cash from warranty sales, which exclude Bailey Banks & Biddle, increased
$9.5 million over the first quarter last year and revenues recognized were
$6.1 million less than the prior year as a result of the change made in the
jewelry protection plan offering during the second quarter of fiscal 2007 from
a two-year to a lifetime agreement. The increase in unrecognized revenues on
the balance sheet was $14.3 million in the first quarter. This increase
reflects the incremental cash collected and the future positive impact to
earnings as a result of the jewelry protection plan change.

    The Company indicated it is comfortable at the more favorable end of its
previously issued earnings per share guidance of ($0.59) to ($0.63) for the
first quarter.

    Chief Executive Officer Betsy Burton commented, "We continue to execute
our strategy of maximizing gross margin dollars and maintaining good expense
control in the current challenging macro environment. This is demonstrated by
the fact that even with relatively flat sales this quarter, we expect to
achieve our earnings objectives."

    Zale Corporation will announce its first quarter 2008 earnings results on
November 20, 2007. A conference call will be held at 9:00 a.m. EST. Parties
interested in participating should dial 706-643-7467 five minutes prior to the
scheduled start time. A webcast of the call, as well as a replay, will be
available on the Company's Web site at For additional
information, contact Investor Relations.

    Zale Corporation is a leading specialty retailer of fine jewelry in North
America operating over 2,250 retail locations throughout the United States,
Canada and Puerto Rico, as well as online. Zale Corporation's brands include
Zales Jewelers, Zales Outlet, Gordon's Jewelers, Bailey Banks & Biddle Fine
Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Through
its ZLC Direct organization, Zale also operates online at, and Additional
information on Zale Corporation and its brands is available at

    This release contains forward-looking statements, including statements
regarding the Company's sales earnings for the first quarter of fiscal year
2008 and the Company's goals and strategies. Forward-looking statements are
not guarantees of future performance and a variety of factors could cause the
Company's actual results to differ materially from the results expressed in
the forward-looking statements. These factors include, but are not limited to:
we have not completed closing our books (and the closing process could impact
some of the estimates we are relying upon); if the general economy performs
poorly, discretionary spending on goods that are, or are perceived to be,
"luxuries" may not grow and may even decrease; the concentration of a
substantial portion of the Company's sales in three, relatively brief selling
seasons means that the Company's performance is more susceptible to
disruptions; personnel costs are a substantial portion of our expense
structure and are difficult to control in the short-term; most of the
Company's sales are of products that include diamonds, precious metals and
other commodities, and fluctuations in the availability and pricing of
commodities could impact the Company's ability to obtain and produce products
at favorable prices; the Company's sales are dependent upon mall traffic; the
Company operates in a highly competitive industry; changes in regulatory
requirements or in the Company's private label credit card arrangement with
Citibank U.S.A., N.A. may increase the cost of or adversely affect the
Company's operations and its ability to provide consumer credit and write
credit insurance; acquisitions involve special risks, including the
possibility that the Company may not be able to integrate acquisitions into
its existing operations. For other factors, see the Company's filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K
for the fiscal year ended July 31, 2007. The Company disclaims any obligation
to update or revise publicly or otherwise any forward-looking statements to
reflect subsequent events, new information or future circumstances.

For further information:

For further information: Zale Corporation David H. Sternblitz Vice
President and Treasurer 972-580-5047

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