CHARLOTTE, N.C., May 20, 2021 /PRNewswire/ -- The Cato
Corporation (NYSE: CATO) today reported net income of $20.7 million or $0.92 per diluted share for the first quarter
ended May 1, 2021, compared to a net
loss of $28.4 million or ($1.19) per diluted share for the first quarter
ended May 2, 2020.
Sales for fiscal 2020 were significantly impacted by the closure
of our stores for six weeks due to the COVID-19 pandemic, beginning
March 19, 2020. Due to the impact of
the unprecedented closures, the Company will report sales compared
to each of the past two years. Sales for the first quarter
were $211.2 million, or an increase
of 114% from sales of $98.8 million
for the first quarter ended May 2,
2020. Compared to the same period in 2019, sales decreased 7%
from sales of $228.3 million for the
quarter ended May 4, 2019. The
Company's same-store sales for the quarter increased 111% compared
to 2020 and decreased 8% when compared to the same period in
2019.
"We remain cautiously optimistic about the remainder of the year
as we see customer traffic improve, states continue to lift
capacity limits as more people are vaccinated, the comfort level
with venturing out to social events increases and people prepare to
return to work," stated John Cato,
Chairman, President, and Chief Executive Officer. "We do
anticipate the beneficial effects of stimulus funds on the economy
to taper off in the near future and retail to continue to be
negatively impacted by global supply chain challenges."
Gross margin increased from 15.4% to 41.5% of sales in the
quarter due to higher merchandise margins. SG&A expenses
as a percent of sales decreased from 53.1% to 29.9% of sales during
the quarter primarily due to leveraging of expenses as a result of
normalized sales and a $5.3 million
non-cash impairment charge in the prior year, partially offset by
higher incentive compensation. Tax impact for the quarter was a
$3.1 million expense versus a
$9.1 million benefit in the prior
year due to the pre-tax loss. The Company ended the quarter
with unrestricted cash and short-term investments of $183.2 million, with no borrowings outstanding on
its revolving line of credit compared to $117.8 million for the same period in 2020, net
of $30 million drawn on its line of
credit.
During the first quarter ended May 1,
2021, the Company permanently closed 5 stores. As of
May 1, 2021, the Company has 1,325
stores in 32 states, compared to 1,300 stores in 31 states as of
May 2, 2020.
"Our healthy cash position, no debt and actions taken to
preserve capital contributed to Cato's ability to weather a year
like 2020," Mr. Cato said. "And the hard work and dedication
of our associates and the loyalty of our customers is allowing us
to regain ground lost during 2020. Our priority, in addition
to providing a safe shopping environment, is to provide fashion and
outstanding customer service at a great value to our
customers."
"As the effects of the pandemic remain ongoing, there still
remains a high level of uncertainty as to their continued impact on
the retail industry as a whole. The lingering effects of the
prolonged supply chain disruption are also a concern," shared Mr.
Cato. "In light of these uncertainties, we remain cautiously
optimistic about the remainder of the year. However, should
our strong start continue through the first half, we expect to
revisit store development opportunities and other projects
suspended due to COVID."
The Cato Corporation is a leading specialty retailer of
value-priced fashion apparel and accessories operating three
concepts, "Cato," "Versona" and "It's Fashion." The Company's
Cato stores offer exclusive merchandise with fashion and quality
comparable to mall specialty stores at low prices every day.
The Company also offers exclusive merchandise found in its Cato
stores at www.catofashions.com. Versona is a unique fashion
destination offering apparel and accessories including jewelry,
handbags and shoes at exceptional prices every day. Select
Versona merchandise can also be found at www.shopversona.com.
It's Fashion offers fashion with a focus on the latest trendy
styles for the entire family at low prices every day.
Statements in this press release that express a belief,
expectation or intention, as well as those that are not a
historical fact, including, without limitation,
statements regarding the Company's expected or estimated
operational financial results, activities or opportunities, and
potential impacts and effects of the coronavirus are considered
"forward-looking" within the meaning of The Private Securities
Litigation Reform Act of 1995. Such forward-looking
statements are based on current expectations that are subject to
known and unknown risks, uncertainties and other factors that could
cause actual results to differ materially from those contemplated
by the forward-looking statements. Such factors
include, but are not limited to, any actual or perceived
deterioration in the conditions that drive consumer confidence and
spending, including, but not limited to, prevailing social,
economic, political and public health conditions and uncertainties,
levels of unemployment, fuel, energy and food costs, wage rates,
tax rates, interest rates, home values, consumer net worth and the
availability of credit; changes in laws or regulations affecting
our business including but not limited to tariffs; uncertainties
regarding the impact of any governmental action regarding, or
responses to, to the foregoing conditions; competitive factors and
pricing pressures; our ability to predict and respond to rapidly
changing fashion trends and consumer demands; our ability to
successfully implement our new store development strategy to
increase new store openings and the ability of any such new
stores to grow and perform as expected; adverse weather, public
health threats (including the global coronavirus (COVID-19)
outbreak) or similar conditions that may affect our sales or
operations; inventory risks due to shifts in market demand,
including the ability to liquidate excess inventory at anticipated
margins; and other factors discussed under "Risk Factors" in Part
I, Item 1A of the Company's most recently filed annual report
on Form 10-K and in other reports the Company files with or
furnishes to the SEC from time to time. The Company does not
undertake to publicly update or revise the forward-looking
statements even if experience or future changes make it clear that
the projected results expressed or implied therein will not be
realized. The Company is not responsible for any changes made to
this press release by wire or Internet services.
|
THE CATO
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
FOR THE PERIODS
ENDED MAY 1, 2021 AND MAY 2, 2020
|
(Dollars in
thousands, except per share data)
|
|
|
|
Quarter
Ended
|
|
|
|
|
|
|
|
|
|
May
1,
|
%
|
|
May 2,
|
%
|
|
2021
|
Sales
|
|
2020
|
Sales
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
Retail
sales
|
$
|
211,234
|
100.0%
|
|
$
|
98,813
|
100.0%
|
Other revenue
(principally finance,
|
|
|
|
|
|
|
|
late fees and layaway charges)
|
|
1,851
|
0.9%
|
|
|
1,919
|
1.9%
|
|
|
|
|
|
|
|
|
Total revenues
|
|
213,085
|
100.9%
|
|
|
100,732
|
101.9%
|
|
|
|
|
|
|
|
|
GROSS MARGIN
(Memo)
|
|
87,559
|
41.5%
|
|
|
15,216
|
15.4%
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES, NET
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
123,675
|
58.5%
|
|
|
83,597
|
84.6%
|
Selling,
general and administrative
|
|
63,237
|
29.9%
|
|
|
52,511
|
53.1%
|
Depreciation
|
|
3,042
|
1.4%
|
|
|
4,006
|
4.1%
|
Interest and
other income
|
|
(663)
|
-0.3%
|
|
|
(1,851)
|
-1.9%
|
|
|
|
|
|
|
|
|
Cost and expenses, net
|
|
189,291
|
89.6%
|
|
|
138,263
|
139.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes
|
|
23,794
|
11.3%
|
|
|
(37,531)
|
-38.0%
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
3,081
|
1.5%
|
|
|
(9,114)
|
-9.2%
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
$
|
20,713
|
9.8%
|
|
$
|
(28,417)
|
-28.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
0.92
|
|
|
$
|
(1.19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
$
|
0.92
|
|
|
$
|
(1.19)
|
|
THE CATO
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
May
1,
|
|
|
January
30,
|
|
2021
|
|
|
2021
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
22,276
|
|
|
$
|
17,510
|
Short-term
investments
|
|
160,897
|
|
|
|
126,416
|
Restricted
cash
|
|
3,918
|
|
|
|
3,918
|
Accounts
receivable - net
|
|
55,140
|
|
|
|
52,743
|
Merchandise
inventories
|
|
84,849
|
|
|
|
84,123
|
Other current
assets
|
|
5,978
|
|
|
|
5,840
|
|
|
|
|
|
|
|
Total Current
Assets
|
|
333,058
|
|
|
|
290,550
|
|
|
|
|
|
|
|
Property and
Equipment - net
|
|
69,925
|
|
|
|
72,550
|
|
|
|
|
|
|
|
Noncurrent Deferred
Income Taxes
|
|
5,726
|
|
|
|
5,685
|
|
|
|
|
|
|
|
Other
Assets
|
|
23,350
|
|
|
|
22,850
|
|
|
|
|
|
|
|
Right-of-Use Assets,
net
|
|
185,861
|
|
|
|
199,817
|
|
|
|
|
|
|
|
TOTAL
|
$
|
617,920
|
|
|
$
|
591,452
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
$
|
144,172
|
|
|
$
|
118,513
|
|
|
|
|
|
|
|
Current Lease
Liability
|
|
58,385
|
|
|
|
63,421
|
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
20,327
|
|
|
|
19,705
|
|
|
|
|
|
|
|
Lease
Liability
|
|
133,153
|
|
|
|
143,315
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
261,883
|
|
|
|
246,498
|
|
|
|
|
|
|
|
TOTAL
|
$
|
617,920
|
|
|
$
|
591,452
|
View original
content:http://www.prnewswire.com/news-releases/cato-reports-1q-net-income-301295650.html
SOURCE The Cato Corporation