Zale Corp., the world’s largest specialty retailer of fine jewelry, ended fiscal 2001 (July 31) with a 13.8% gain in sales but a 3.8% drop in same-store sales, says a preliminary report issued Aug. 7.

The fourth quarter showed sales of $410.4 million, a 9.8% gain over figures from last year’s final quarter. However, comparable store sales were down 9.7%, compared with a 6.4% gain last year. In addition, Zale said fourth-quarter earnings would be five to 10 cents a share, much less than the 17 cents financial analysts reportedly expected.

Robert Di Nicola, chairman and chief executive officer of Zale Corp., calls the fourth-quarter results “disappointing” and says initiatives to ensure Zale’s long-term success had caused “a short-term disruption in our business.”

He notes, however, that the company had “finished this difficult year with positive cash flow and improved inventory levels” and says there are “early signs [that] the initiatives are having a positive impact” in the new fiscal year.

“For the past several months, we’ve worked very hard to get our business back on track,” Di Nicola says. “We’ve addressed the quantity and quality of product and promotional activity and worked diligently to integrate our new credit relationship into our system. We’ve positioned the Piercing Pagoda [a mall jewelry kiosk business that Zale bought last summer] properly for ‘back to school’ and beyond. We’ve realigned inventories, at the same time conserving cash, giving us more flexibility as we move ahead in our new fiscal year.”