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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report
Dated February 21, 2007
of
ZALE CORPORATION
A Delaware Corporation
IRS Employer Identification No. 75-0675400
SEC File Number 001-04129
901 West Walnut Hill Lane
Irving, Texas 75038
(972) 580-4000
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Securities Act (17
CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Securities Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Securities Act (17 CFR 240.13e-2(c))
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Item 2.02. Results of Operations and Financial Condition
On February 21, 2007, Zale Corporation issued a press release reporting its
financial results for the second fiscal quarter ended January 31, 2007. A copy
of the press release is being furnished as Exhibit 99.1 and is incorporated
herein by reference.
The attached press release includes a presentation of earnings and earnings
per share for the second quarter ended January 31, 2007 that excludes the impact
of derivative versus hedge accounting on the Company's gold and silver
contracts, and reflects lifetime jewelry protection plans as if they were
amortized using percentage-of-cost-expected-to-be incurred method. In addition,
the attached press release includes a presentation of earnings and earnings per
share for the second quarter ended January 31, 2006, excluding impairment
charges associated with closing certain Bailey Banks & Biddle stores. Earnings
and earnings per share excluding the impact of derivative versus hedge
accounting and such impairment charges would not be considered measures of
financial performance under generally accepted accounting principles (GAAP) and
should not be considered as alternatives to earnings and earnings per share as
computed under GAAP for the applicable period.
The Company believes that a presentation of earnings and earnings per share
excluding the impact of derivative accounting and the impairment charges is
helpful to investors. Management will use earnings and earnings per share
measures adjusted to exclude these charges as part of its evaluation of the
performance of the Company. Further, the Company believes the adjusted earnings
and earnings per share measures provide useful information to investors because
the Company's original earnings guidance was based on hedge accounting
treatment, the Company entered into the gold and silver contracts to establish
the purchase cost of its gold and silver inventory, and the Company's adoption
of derivative accounting significantly impacted the Company's earnings and
earnings per share during the quarter ended January 31, 2007. Similarly, the
Company believes that it is appropriate to provide investors information
regarding its lifetime jewelry protection plans determined on a basis comparable
to prior period with respect to extended service agreements, which is consistent
with how the Company manages and evaluates its business. In addition, the
impairment charges excluded relate to events that had a significant impact
during the quarter and will recur in unpredictable amounts and with
unpredictable frequency in the future.
The information set forth under this Item 2.02 and in Exhibit 99.1 is being
furnished and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
ZALE CORPORATION
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Registrant
Date: February 21, 2007 By: /s/ Cynthia T. Gordon
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Cynthia T. Gordon
Senior Vice President,
Controller
(principal accounting officer
of the Registrant)
EXHIBIT INDEX
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99.1 Press Release of Zale Corporation issued February 21, 2007.