NEW YORK — Zale Corp. concluded a year of repositioning with double-digit gains in fourth-quarter and yearend earnings on more modest sales increases.

For the three months ended July 31, income rose 23.6 percent to $3.7 million, or 11 cents a share, compared with $3 million, or 9 cents, in the year-ago quarter. The results include a charge relating to severance and other benefit payments connected with executive management changes. Excluding the charge, income would have been $5.1 million, or 15 cents a diluted share. Sales increased by 3.2 percent to $435.6 million from $422 million, while comparable-store sales were up 2 percent.

Mary L. Forte, president and chief executive officer, said in a statement: "In spite of the many external challenges of the past fiscal year, our team was able to deliver an improvement in both sales and earnings while also accomplishing the major goal of restructuring and repositioning our business. We now believe our business is on stable ground and we are prepared to maximize the many opportunities that lie ahead."

The company reaffirmed previous expectations of a same-store sales increase of 1 to 2 percent for fiscal 2003, along with earnings growth in the 10 to 12 percent range.

The retail chain said it plans to open 30 new stores and 30 kiosks in the new year. At the end of the quarter, Zale operated 2,295 retail locations under nameplates including Zales, Gordon’s, Bailey Banks & Biddle and Piercing Pagoda.

For the year, income skyrocketed 75 percent to $143.9 million, or $4.16 cents a diluted share, from $82 million, or $2.37 cents, last year. Sales rose 5 percent to $2.2 billion from $2.1 billion, and were adjusted for changes in credit insurance operations. Comps inched up 1.5 percent for the year.

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