"We are very pleased with our Internet business thisholiday," says Zale President & CEO Mary L. Forte."The website is really becoming a complement to outstores as customers use it to buy but also do researchand narrow their assortment." She added thatValentine's Day is traditionally not a high-dollarholiday; products that are most in demand are pricedat $199 and below.

While online sales exceeded the retailer'sexpectations, same store sales decreased 0.6% for thesame period. However, Forte points out that ZalesJewelers was the only concept to post negative samestore sales. Zale Corp.'s other brands, which includeZales Fine Jewelry Outlet, Gordon's Jewelers, BaileyBanks & Biddle Fine Jewelers, Peoples Jewellers,Mappins Jewellers and Piercing Pagoda, all hadpositive comparable store sales increases for thequarter.

After the earnings announcement, Zale Corp.'s stockrose nearly 13% on Friday to close at $30.40. Theretailer has roughly 2,330 locations throughout NorthAmerica.