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Zale's $28.3M 1Q loss is bigger than expected

DALLAS (AP) -- Jewelry retailer Zale Corp. reported a bigger-than-expected fiscal first-quarter loss on Tuesday, but said it is on track to turn a profit again.

Zale lost $28.3 million, or 88 cents per share, for the quarter that ended Oct. 31. That was an improvement from a year-ago loss of $31.9 million, or 99 cents per share.

Revenue rose 1.8 percent to $357.5 million.

Analysts surveyed by FactSet expected a loss of 68 cents per share on revenue of $365.6 million.

Zale repeated its expectation that it will report a profit for fiscal 2013. CEO Theo Killion said the company is making "continued progress towards our goal of returning Zale to profitability."

Zale runs Zales and Gordon's jewelry stores in the U.S., and People's Jewellers and Mappins Jewellers in Canada. It also operates Piercing Pagoda kiosks.

Revenue from stores open at least a year — a key measure for retailers — rose 3.9 percent. Growth was 3.9 percent at the U.S. jewelry stores, 5.5 percent at the Canadian stores, and 2 percent for Piercing Pagoda.

The company had $908 million in inventory on hand at the end of the quarter, compared to $857 million a year ago. Rising inventories can be a sign that business is slowing, leaving more merchandise on the shelf, or it can mean a company is stocking up to get ready for more business.

Zale shares plunged in aftermarket trading, falling 99 cents, or 13.3 percent, to $6.45. Before the results were released they had risen 16 cents, or 2.2 percent, to close at $7.44 in the regular session.