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Zale Corp. (NYSE:ZLC) is expected to report Q1 earnings before market open Tuesday, November 25, with a conference call scheduled for 9:00 am ET.

Guidance

Analysts are looking for a loss of (93c) on revenue of $381.93M. The consensus range is ($1.02) - (77c) for EPS, and revenue $378.1M - $390.4M, according to First Call. In August, the company forecast FY09 EPS $1.10 - $1.25 vs. First Call consensus 88c. Demand for jewelry has decreased due to the overall economic slump. Instead of buying luxury items, consumers are flocking to wholesale clubs and discount apparel chains.

Analyst Views

Standard & Poor's analyst Marie Driscoll says the luxury market is slowing because wealthy shoppers are feeling the pinch of a weak economy but don't want to "trade down" to less expensive brands. Analysts and investors will look for comments from Zale on the looming holiday season. Steifel Nicolaus analyst Scott Devitt believes this season will be the worst in two decades "given how broad the economic recession is". Additionally, while jewelers typically look abroad to offset weakness in the U.S., this strategy may prove to be ineffective due to the stronger dollar and the economic slowdown in Europe.

Source: Earnings Preview: Zale Corp.