Momentum in Small-Cap Jeweler Zale Continues

Shares of Zale Corp. ZLC are continuing to rise sharply on Friday after the stock surged in the wake of the company's Q4 earnings results on Thursday. During mid-day trading, Zale was trading up nearly 9 percent to $5.47. The catalyst for the move in the stock has been its fourth quarter earnings results. Shares are now up 45 percent over the last 5 trading days and more than 80 percent over the last month. The company reported a net loss of $19.7 million or $0.61 per share, compared to a loss of $32.6 million or $1.02 per share, in last year's fourth quarter. Wall Street analysts had expected the company to report a loss of $0.84 per share. Revenues in the period rose 7.9 percent to $407 million from $377.3 million last year. This came in ahead of Wall Street revenue estimates of $405.4 million. Gross margins rose from 51.3 percent last year to 51.6 percent in the most recent quarter. Comparable store sales increased by 8.3 percent in the quarter. Chief Executive Officer Theo Killion said, "In the fourth quarter, we made significant progress in returning Zale to profitability. We recorded our seventh consecutive quarter of positive comps, reported a sizeable improvement in operating margin and strengthened our capital structure." Killion added, "We look forward to building on this momentum in 2013." A look at a chart of Zale reveals that it is one of the most explosive stocks in the market right now. The shares broke above a resistance area in recent weeks, and have staged an extremely strong breakout, sending the stock to new 52-week highs in short order.