CHARLOTTE, N.C., March 21,
2024 /PRNewswire/ -- The Cato Corporation (NYSE:
CATO) today reported a net loss of ($23.4)
million or ($1.14) per diluted
share for the fourth quarter ended February
3, 2024, compared to a net loss of ($3.0) million or ($0.14) per diluted share for the fourth quarter
ended January 28, 2023. Full-year
fiscal 2023 net loss was ($23.9)
million or ($1.17) per diluted
share compared to net income of $0.0
million or $0.00 per diluted
share for 2022. Contributing to the net loss is income tax expense
of $10.9 million for the fourth
quarter of fiscal 2023 and $10.1
million for the full year of fiscal 2023. The income tax
expense is primarily due to a non-cash valuation allowance recorded
against U.S. federal and state deferred tax assets.
Sales for the fourth quarter ended February 3, 2024 were $172.1 million, or a decrease of 3% from sales of
$177.5 million for the fourth quarter
ended January 28, 2023. The Company's
same-store sales for the quarter decreased 5% compared to the same
period in 2022. The gap between sales and same store sales
percentages is due to the fourth quarter of 2023 containing
fourteen weeks versus thirteen weeks in the fourth quarter of
fiscal 2022, as the fiscal year ended February 3, 2024 contains 53 weeks versus 52
weeks in the fiscal year ended January 28,
2023. For the year, the Company's sales decreased 7% to
$700.3 million from 2022 sales of
$752.4 million. Same-store sales for
the year decreased 6% compared to 2022.
"Our fiscal 2023 sales trend was negatively impacted by pressure
on our customers' discretionary spending levels primarily due to
higher interest rates and inflation," said John Cato, Chairman, President and Chief
Executive Officer. "Our full year gross margin rate improved
compared to fiscal 2022, as we focused on controlling our
inventory. Despite the challenges experienced throughout 2023, we
have continued investing in key capital projects and efficiency
initiatives in support of our long-term growth."
Fourth-quarter gross margin decreased from 31.3% to 31.0% of
sales in 2023 reflecting pressure from increased markdowns, coupled
with higher buying and domestic freight costs. Selling, general and
administrative expenses as a percent of sales increased from 33.8%
to 39.2% of sales during the quarter primarily due to increased
store operating expenses, insurance, closed store and impairment
expenses. Income tax for the quarter was an expense of $10.9 million compared to a benefit of
$1.2 million last year. The increase
in tax expense for the quarter was due primarily to a non-cash
valuation allowance recorded against U.S. federal and state
deferred tax assets.
For the full year 2023, gross margin increased from 32.3% of
sales in 2022 to 33.7% of sales in part due to lower ocean freight
costs and an increase in regular priced selling of goods, partially
offset by higher occupancy and buying costs. Selling, general and
administrative expenses increased to 36.1% of sales compared to
32.3% in the prior year. The selling, general and administrative
rate increase was primarily due to higher payroll costs, insurance
and closed store expenses including impairment expenses. Income tax
expense for the year was $10.1
million compared to an expense of $1.7 million last year. The increase in tax
expense for the year was due primarily to a non-cash valuation
allowance recorded against U.S. federal and state deferred tax
assets.
"As we look ahead to 2024, we remain cautious in this
challenging economic environment with continued high interest rates
and persistent inflation impacting our customers' disposable
income," stated Mr. Cato. "In 2024, we will continue to introduce
new merchandise offerings, as well as refine our existing
merchandise assortments. We will also continue to invest in our
productivity and efficiency initiatives. As always we will continue
our strategy of offering great fashion at a value, with outstanding
customer service."
During 2023, the Company opened seven stores, relocated two
stores and permanently closed 109 stores. As of February 3, 2024, the Company operated 1,178
stores in 31 states, compared to 1,280 stores in 32 states as of
January 28, 2023. During 2024, the
Company plans to open up to 15 new stores and close up to
75 underperforming stores as leases expire. These store
closings are anticipated to have minimal financial impact.
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 interest rates, inflation or other
factors that may affect our customers' disposable income or our
costs, 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,
inflation, wage rates, tax rates, interest rates, home values,
consumer net worth and the availability of credit; changes in laws,
regulations or government policies 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; adverse developments or
volatility affecting the financial services industry or broader
financial markets; 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 (LOSS) (UNAUDITED)
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FOR THE PERIODS
ENDED FEBRUARY 3, 2024 AND JANUARY 28, 2023
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(Dollars in thousands,
except per share data)
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Quarter
Ended
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Twelve Months
Ended
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February
3,
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%
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January 28,
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%
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February
3,
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%
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January 28,
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%
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2024
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Sales
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2023
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Sales
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2024
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Sales
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2023
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Sales
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REVENUES
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Retail
sales
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$
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172,144
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100.0 %
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$
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177,510
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100.0 %
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$
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700,318
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100.0 %
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$
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752,370
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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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2,738
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1.6 %
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1,539
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0.9 %
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7,741
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1.1 %
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6,890
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0.9 %
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Total revenues
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174,882
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101.6 %
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179,049
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100.9 %
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708,059
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101.1 %
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759,260
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100.9 %
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GROSS MARGIN
(Memo)
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53,367
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31.0 %
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55,590
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31.3 %
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236,005
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33.7 %
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242,706
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32.3 %
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COSTS AND EXPENSES,
NET
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Cost of goods
sold
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118,777
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69.0 %
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121,920
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68.7 %
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464,313
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66.3 %
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509,664
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67.7 %
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Selling, general
and administrative
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67,433
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39.2 %
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60,042
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33.8 %
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252,777
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36.1 %
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242,648
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32.3 %
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Depreciation
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2,500
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1.5 %
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2,662
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1.5 %
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9,871
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1.4 %
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11,080
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1.5 %
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Interest and
other income
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(1,347)
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-0.8 %
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(1,337)
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-0.8 %
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(5,101)
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-0.7 %
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(5,902)
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-0.8 %
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Costs and expenses, net
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187,363
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108.8 %
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183,287
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103.3 %
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721,860
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103.1 %
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757,490
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100.7 %
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Income (Loss) Before
Income Taxes
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(12,481)
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-7.3 %
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(4,238)
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-2.4 %
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(13,801)
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-2.0 %
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1,770
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0.2 %
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Income Tax Expense
(Benefit)
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10,937
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6.4 %
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(1,246)
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-0.7 %
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10,140
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1.4 %
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1,741
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0.2 %
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Net Income
(Loss)
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$
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(23,418)
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-13.6 %
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$
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(2,992)
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-1.7 %
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$
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(23,941)
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-3.4 %
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$
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29
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0.0 %
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Basic Earnings Per
Share
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$
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(1.14)
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$
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(0.14)
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$
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(1.17)
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$
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0.00
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Diluted Earnings Per
Share
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$
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(1.14)
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$
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(0.14)
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$
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(1.17)
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$
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0.00
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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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February
3,
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January 28,
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2024
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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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23,940
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$
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20,005
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Short-term
investments
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79,012
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108,652
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Restricted
cash
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3,973
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3,787
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Accounts
receivable - net
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29,751
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26,497
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Merchandise
inventories
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98,603
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112,056
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Other current
assets
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7,783
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6,676
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Total Current
Assets
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243,062
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277,673
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Property and Equipment
- net
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64,022
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70,382
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Noncurrent Deferred
Income Taxes
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0
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9,213
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Other Assets
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25,047
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21,596
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Right-of-Use Assets,
net
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154,686
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174,276
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TOTAL
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$
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486,817
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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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126,900
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$
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135,597
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Current Lease
Liability
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61,108
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67,360
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Noncurrent
Liabilities
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14,475
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16,183
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Lease
Liability
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92,013
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107,407
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Stockholders'
Equity
|
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192,321
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226,593
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TOTAL
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$
|
486,817
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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-4q-and-full-year-loss-302095297.html
SOURCE The Cato Corporation