Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Zale's Degree of Operating Leverage for the quarter that ended in Jan. 2014 was 0.00. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Zale's Degree of Operating Leverage or its related term are showing as below:
FRA:ZLC's Degree of Operating Leverage is not ranked *
in the Retail - Cyclical industry.
Industry Median: 1.305 * Ranked among companies with meaningful Degree of Operating Leverage only.
Zale Degree of Operating Leverage Historical Data
The historical data trend for Zale's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Zale's Degree of Operating Leverage
For the Luxury Goods subindustry, Zale's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Zale's Degree of Operating Leverage Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Zale's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Zale's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
Zale (FRA:ZLC) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Zale Degree of Operating Leverage Related Terms
Thank you for viewing the detailed overview of Zale's Degree of Operating Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
Zale Corporation was incorporated in Delaware in 1993. The company is a specialty retailer of fine jewelry in North America. At July 31, 2012, it operated 1,124 specialty retail jewelry stores and 654 kiosks located mainly in shopping malls throughout the United States, Canada and Puerto Rico. It report its operations under three business segments: Fine Jewelry, Kiosk Jewelry and All Other. Fine Jewelry is comprised of five brands, predominantly focused on the value-oriented consumer as its core guest target. Each brand specializes in fine jewelry and watches, with merchandise and marketing emphasis focused on diamond products. Zales Jewelers is its national brand in the U.S. providing moderately priced jewelry to a broad range of guests. Zales Outlet operates in outlet malls and neighborhood power centers and capitalizes on Zales Jewelers' national advertising and brand recognition. Gordon's Jewelers is a value-oriented regional jeweler. Peoples Jewellers, Canada's largest fine jewelry retailer, provides guests with an affordable assortment and an accessible shopping experience. Mappins Jewellers offers Canadian guests a broad selection of merchandise from engagement rings to fashionable and contemporary fine jewelry. Kiosk Jewelry operates under the brand names Piercing Pagoda, Plumb Gold, and Silver and Gold Connection (collectively, 'Piercing Pagoda') through mall-based kiosks, and is focused on the opening price point jewelry guest. Its presence in Kiosk Jewelry has been expanded through the e-commerce site, www.pagoda.com. Internet sales totaled $1.9 million in fiscal year 2012 compared to $1.4 million in fiscal year 2011. It also offers its guests the option to purchase warranty coverage on certain products. At July 31, 2012, Piercing Pagoda operated 654 locations in 41 states and Puerto Rico, sales from which accounted for 13 percent of its total revenues in fiscal year 2012. It provides insurance and reinsurance services for various types of insurance coverage, which are marketed primarily to its private label credit card guests, through Zale Indemnity Company, Zale Life Insurance Company and Jewel Re-Insurance Ltd. These three companies are the insurers (either through direct written or reinsurance contracts) of its guests' credit insurance coverage. In addition to providing merchandise replacement coverage for certain perils, credit insurance coverage provides protection to the creditor and cardholder for losses associated with the disability, involuntary unemployment, leave of absence or death of the cardholder.
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