CHARLOTTE, N.C., Nov. 16,
2023 /PRNewswire/ -- The Cato Corporation (NYSE:
CATO) today reported a net loss of $6.1
million or ($0.30) per diluted
share for the third quarter ended October
28, 2023, compared to a net loss of $4.5 million or ($0.21) per diluted share for the third quarter
ended October 29, 2022.
Sales for the third quarter ended October
28, 2023 were $156.7 million,
a decrease of 10% from sales of $174.9
million for the third quarter ended October 29, 2022. The Company's same-store
sales for the quarter decreased 8% compared to 2022.
For the nine months ended October 28,
2023, the Company reported a net loss of $0.5 million or ($0.02) per diluted share, compared to net income
of $3.0 million or $0.14 per diluted share for the nine months ended
October 29, 2022. Sales for the
nine months ended October 28, 2023
were $528.2 million, a decrease of 8%
to sales of $574.9 million for the
nine months ended October 29,
2022. Year-to-date same-store sales decreased 6% compared to
2022.
"Our year-to-date sales trend continues to be negatively
impacted by declining spending on goods versus services, as well as
our customers' discretionary spending levels," stated John Cato, Chairman, President, and Chief
Executive Officer. "Our gross margin rate continues to
improve compared to 2022, as we continue to focus on controlling
our inventory in this difficult economic environment. However
given the current economic conditions, we believe that the fourth
quarter will remain challenging."
Gross margin increased from 29.3% to 32.5% of sales in the
quarter due to higher merchandise margins, partially offset by
increased freight and occupancy costs as a percent of sales.
SG&A expenses as a percent of sales increased from 35.1% to
39.4% of sales during the quarter primarily due to increased
payroll and insurance expense. Tax benefit for the quarter was
$4.3 million versus a $4.7 million tax benefit in the prior year.
Year-to-date gross margin increased to 34.6% of sales from 32.5%
in the prior year primarily due to increased merchandise margins,
partially offset by occupancy costs as a percent of sales.
The year-to-date SG&A rate was 35.1% versus 31.8% primarily due
to increased payroll and insurance expense. Tax benefit for
the nine-month period was $0.8
million compared to $3.0
million tax expense last year.
During the third quarter ended October
28, 2023, the Company opened one store and closed three
stores. Year-to-date, the Company opened nine stores and
closed 44 stores. As of October 28,
2023, the Company has 1,245 stores in 31 states, compared to
1,317 stores in 32 states as of October
29, 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
THE CATO
CORPORATION
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CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
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FOR THE PERIODS
ENDED OCTOBER 28, 2023 AND OCTOBER 29, 2022
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(Dollars in thousands,
except per share data)
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Quarter
Ended
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Nine Months
Ended
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October
28,
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%
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October 29,
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%
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October
28,
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%
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October 29,
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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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156,682
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100.0 %
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$
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174,921
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100.0 %
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$
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528,174
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100.0 %
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$
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574,860
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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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1,574
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1.0 %
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1,705
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1.0 %
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5,003
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0.9 %
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5,351
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0.9 %
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Total revenues
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158,256
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101.0 %
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176,626
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101.0 %
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533,177
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100.9 %
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580,211
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100.9 %
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GROSS MARGIN
(Memo)
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50,850
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32.5 %
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51,169
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29.3 %
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182,638
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34.6 %
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187,116
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32.5 %
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COSTS AND EXPENSES,
NET
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Cost of goods
sold
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105,832
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67.5 %
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123,752
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70.7 %
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345,536
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65.4 %
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387,744
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67.5 %
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Selling, general
and administrative
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61,792
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39.4 %
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61,397
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35.1 %
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185,344
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35.1 %
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182,606
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31.8 %
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Depreciation
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2,504
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1.6 %
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2,864
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1.6 %
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7,371
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1.4 %
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8,418
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1.5 %
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Interest and
other income
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(1,523)
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-1.0 %
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(2,278)
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-1.3 %
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(3,754)
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-0.7 %
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(4,565)
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-0.8 %
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Costs and expenses, net
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168,605
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107.6 %
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185,735
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106.2 %
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534,497
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101.2 %
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574,203
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99.9 %
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Income (Loss) Before
Income Taxes
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(10,349)
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-6.6 %
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(9,109)
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-5.2 %
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(1,320)
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-0.3 %
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6,008
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1.0 %
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Income Tax Expense
(Benefit)
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(4,272)
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-2.7 %
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(4,656)
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-2.7 %
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(797)
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-0.2 %
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2,988
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0.5 %
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Net Income
(Loss)
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$
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(6,077)
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-3.9 %
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$
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(4,453)
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-2.5 %
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$
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(523)
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-0.1 %
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$
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3,020
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0.5 %
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Basic Earnings Per
Share
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$
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(0.30)
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$
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(0.21)
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$
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(0.02)
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$
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0.14
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Diluted Earnings Per
Share
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$
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(0.30)
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$
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(0.21)
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$
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(0.02)
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$
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0.14
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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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October
28,
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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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25,024
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$
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20,005
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Short-term
investments
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93,552
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108,652
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Restricted
cash
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3,908
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3,787
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Accounts
receivable - net
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31,115
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26,497
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Merchandise
inventories
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98,872
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112,056
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Other current
assets
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8,591
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6,676
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Total Current
Assets
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261,062
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277,673
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Property and Equipment
- net
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66,302
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70,382
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Noncurrent Deferred
Income Taxes
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10,977
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9,213
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Other Assets
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25,444
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21,596
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Right-of-Use Assets,
net
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123,583
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174,276
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TOTAL
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$
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487,368
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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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132,793
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$
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135,597
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Current Lease
Liability
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51,431
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67,360
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Noncurrent
Liabilities
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14,683
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16,183
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Lease
Liability
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71,143
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107,407
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Stockholders'
Equity
|
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217,318
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226,593
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TOTAL
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$
|
487,368
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$
|
553,140
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View original
content:https://www.prnewswire.com/news-releases/cato-reports-3q-results-301990218.html
SOURCE The Cato Corporation