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Zale posts $51.1M in 3Q net income

DALLAS (AP) -- Zale surprised Wall Street with a quick return to a profitable third quarter and shares spiked 15 percent before the opening bell 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.

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, in the same quarter the year before.

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.

In premarket trading, shares of Zale Corp. rose 80 cents to $6.20.