CHARLOTTE, N.C., Aug. 17,
2023 /PRNewswire/ -- The Cato Corporation (NYSE:
CATO) today reported net income of $1.1
million or $0.06 per diluted
share for the second quarter ended July 29,
2023, compared to a net loss of $2.3
million or ($0.11) per diluted
share for the second quarter ended July
30, 2022.
Sales for the second quarter ended July
29, 2023 were $181.2 million,
or a decrease of 7% from sales of $195.0
million for the second quarter ended July 30, 2022. The Company's same-store
sales for the quarter decreased 5% compared to 2022.
For the six months ended July 29,
2023, the Company reported net income of $5.6 million or $0.27 per diluted share, compared to net income
of $7.4 million or $0.35 per diluted share for the six months ended
July 30, 2022. Sales for the
six months ended July 29, 2023 were
$371.5 million, a decrease of 7% from
sales of $399.9 million for the six
months ended July 30, 2022.
Year-to-date same-store sales decreased 5% compared to 2022.
"Our year-to-date sales trend continues to be negatively
impacted by pressure on our customers' discretionary spending,"
stated John Cato, Chairman, President, and Chief Executive
Officer. "Our gross margin improved as we took steps to right
size our inventory. However, we believe the back half of the
year will remain challenging."
Gross margin increased to 35.1% from 32.4% of sales in the
quarter due to higher merchandise margins and decreased freight
expense. SG&A expenses as a percent of sales increased
from 31.2% to 34.0% of sales during the quarter primarily due to
increased payroll and insurance expense. Tax expense for the
quarter was $1.3 million versus
$5.7 million in the prior year,
reflecting a more normalized tax rate in the quarter compared to
last year.
Year-to-date gross margin increased to 35.5% of sales from 34.0%
the prior year primarily due to increased merchandise margins and
decreased freight expense. Year-to-date SG&A expenses
were 33.3% as a percent of sales versus 30.3% in the prior year
primarily due to increased payroll and insurance expense. Income
tax expense for the first half decreased to $3.5 million versus $7.6
million last year.
During the second quarter ended July 29,
2023, the Company opened two new stores, relocated one store
and closed 19 stores. As of July 29,
2023, the Company has 1,247 stores in 31 states, compared to
1,312 stores in 32 states as of July
30, 2022.
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, 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
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THE CATO CORPORATION
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
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FOR THE PERIODS ENDED JULY 29, 2023 AND JULY 30,
2022
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(Dollars in thousands, except per share
data)
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Quarter Ended
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Six Months Ended
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July 29,
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%
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July 30,
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%
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July 29,
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%
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July 30,
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%
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2023
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Sales
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2022
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Sales
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2023
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Sales
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2022
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Sales
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REVENUES
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Retail
sales
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$
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181,181
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100.0 %
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$
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195,006
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100.0 %
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$
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371,492
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100.0 %
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$
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399,939
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100.0 %
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Other revenue
(principally finance,
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late
fees and layaway charges)
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1,690
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0.9 %
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1,858
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1.0 %
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3,429
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0.9 %
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3,646
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0.9 %
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Total revenues
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182,871
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100.9 %
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196,864
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101.0 %
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374,921
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100.9 %
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403,585
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100.9 %
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GROSS MARGIN (Memo)
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63,564
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35.1 %
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63,257
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32.4 %
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131,788
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35.5 %
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135,947
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34.0 %
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COSTS AND EXPENSES, NET
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Cost of goods
sold
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117,617
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64.9 %
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131,749
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67.6 %
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239,704
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64.5 %
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263,992
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66.0 %
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Selling, general
and administrative
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61,618
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34.0 %
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60,768
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31.2 %
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123,552
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33.3 %
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121,209
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30.3 %
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Depreciation
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2,510
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1.4 %
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2,811
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1.4 %
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4,867
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1.3 %
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5,554
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1.4 %
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Interest and
other income
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(1,334)
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-0.7 %
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(1,884)
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-1.0 %
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(2,231)
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-0.6 %
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(2,287)
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-0.6 %
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Costs and expenses, net
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180,411
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99.6 %
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193,444
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99.2 %
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365,892
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98.5 %
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388,468
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97.1 %
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Income Before Income
Taxes
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2,460
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1.4 %
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3,420
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1.8 %
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9,029
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2.4 %
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15,117
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3.8 %
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Income Tax
Expense
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1,333
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0.7 %
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5,694
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2.9 %
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3,475
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0.9 %
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7,643
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1.9 %
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Net Income
(Loss)
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$
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1,127
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0.6 %
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$
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(2,274)
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-1.2 %
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$
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5,554
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1.5 %
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$
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7,474
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1.9 %
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Basic Earnings Per
Share
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$
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0.06
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$
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(0.11)
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$
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0.27
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$
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0.35
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Diluted Earnings Per
Share
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$
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0.06
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$
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(0.11)
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$
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0.27
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$
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0.35
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THE CATO CORPORATION
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CONDENSED
CONSOLIDATED BALANCE SHEETS
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(Dollars in thousands)
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July 29,
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January 28,
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2023
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2023
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(Unaudited)
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(Unaudited)
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ASSETS
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Current
Assets
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Cash and cash
equivalents
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$
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55,977
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$
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20,005
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Short-term
investments
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77,222
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108,652
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Restricted
cash
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3,877
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3,787
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Accounts
receivable - net
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26,915
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26,497
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Merchandise
inventories
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92,718
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112,056
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Other current
assets
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7,098
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6,676
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Total Current
Assets
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263,807
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277,673
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Property and Equipment
- net
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73,871
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70,382
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Noncurrent Deferred
Income Taxes
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9,888
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9,213
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Other Assets
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21,770
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21,596
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Right-of-Use Assets,
net
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138,331
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174,276
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TOTAL
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$
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507,667
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$
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553,140
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LIABILITIES AND STOCKHOLDERS'
EQUITY
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Current
Liabilities
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$
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127,971
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$
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135,597
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Current Lease
Liability
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32,431
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67,360
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Noncurrent
Liabilities
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16,342
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16,183
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Lease
Liability
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105,390
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107,407
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Stockholders'
Equity
|
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225,533
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226,593
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TOTAL
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$
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507,667
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$
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553,140
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View original
content:https://www.prnewswire.com/news-releases/cato-reports-2q-results-301903351.html
SOURCE The Cato Corporation