Zale Corp (ZLC) is trading significantly lower this morning after reporting a steeper Q1 loss than Wall Street expected. The company reported Q1 EPS (88c), below analysts' estimates of (68c), on revenue of $357.6M, also below estimates of $364.65M. The retailer said same-store sales for the quarter increased 3.9% vs. an increase of 5.8% in the year-ago period. Zale said SSS for U.S. Fine Jewelry brands, which includes Zales Jewelers and Zales Outlet, increased 3.9%, while SSS for Piercing Pagoda increased 2%. Inventory at October 31 was $908M vs. $857M a year-ago. The company said it expects to achieve positive net income for FY13. On its Q1 earnings conference call, Zale said that revenue for the quarter was adversely impacted by about $1M by Superstorm Sandy and that it experienced about a $2M negative impact due to Sandy in the early part of November. The company said that 375 locations were briefly closed due to Sandy, and said sales were slower than expected in the first half of November due in part to the impact of the storm; the company noted that it has seen signs of recovery in the areas affected by the storm as the month has progressed. Zale said it is not contemplating price reductions to follow lower diamond costs. In mid-morning trading, Zale shares slid $2.01, or 27.15%, to $5.42.