Zale Announces Fourth Quarter and Full Year Sales Results

    DALLAS, August 9 /CNW/ - Zale Corporation (NYSE:   ZLC), a leading
specialty retailer of fine jewelry in North America, today reported that for
the fourth quarter ended July 31, 2007, comparable store sales decreased 0.5%.
Revenues for the fourth quarter were $488 million compared to last year's
revenues of $491 million, a decrease of 0.6%. Revenues recognized were $7.5
million or 1.5% less than the prior year as a result of the change made in the
method of amortizing jewelry protection plan sales due to a change in the
product offering from a two-year to a lifetime agreement during the second
quarter. While recognized revenue from the plans declined, actual sales of
these plans increased to $26.7 million from $16.6 million in the fourth
quarter of fiscal 2006. Full fiscal year revenues were flat at $2.44 billion,
compared to the same period last year. Full fiscal year comparable store sales
decreased 0.2%.

    The Company indicated it is comfortable at the more favorable end of its
previously issued GAAP earnings per share guidance of ($0.11) to ($0.15) for
the fourth quarter.

    "Our performance was consistent with plan for the fourth quarter,"
commented Betsy Burton, Chief Executive Officer. "We remained focused on
maximizing gross margin dollars and maintaining good expense control in a
somewhat challenging macro environment. As we start the beginning of a new
fiscal year, our focus will be value creation for shareholders and improvement
of the fundamentals of our business."

    Zale Corporation will announce its fourth quarter and complete fiscal
year 2007 earnings results on August 30, 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 approximately 2,300 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 earnings for the fourth quarter of fiscal year 2007
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, 2006. 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,
972-580-5047 Vice President and Treasurer

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