CHARLOTTE, N.C., May 19, 2017 /PRNewswire/ -- The Cato Corporation
(NYSE: CATO) held its Annual Shareholders' Meeting on Friday, May 19, 2017 at its corporate offices in
Charlotte, N.C.
John Cato, Chairman, President,
and Chief Executive Officer, began the meeting with a recap of
three major initiatives undertaken by The Company in 2014 to
address changes in customer buying habits. The initiatives
were the launch of our e-commerce platform, opening our own
overseas sourcing offices, and shifting to a new model of designing
fashions internally. Mr. Cato indicated each of these
initiatives has required adjustments to how the business operates
and each will play a key role in The Company's future success.
Mr. Cato stated The Company reported record earnings in 2015 and
achieved over $1 billion in
sales. Unfortunately, Mr. Cato said 2016 was more difficult,
as it was for many retailers, but he was proud to highlight the
year was still very profitable. He also indicated these
challenges are continuing in 2017 and are primarily the result of
changing consumer buying habits affecting the entire retail
industry, as well as internal merchandising missteps.
"The good news is we have identified these issues related to our
merchandise assortment and design and are taking corrective actions
that will put us back on track," Mr. Cato said. "While we had
hoped to turn the corner on this by now, our merchandise
corrections will continue through the summer and most likely into
fall. Bottom line, this means 2017 will be a very challenging
year."
Mr. Cato mentioned several factors compounding the challenges of
a volatile and competitive retail market. Among them are the
rising cost of living, consumer spending shifts away from apparel
and more toward "experiences," the general decline in
brick-and-mortar sales due to online shopping, and the continuing
lack of new shopping center development and increased competition
for good retail space.
But Mr. Cato also outlined a number of reasons he remains
optimistic about The Company's future. First, he said, Cato
is committed to providing exclusive styles at a great value by
utilizing its new internal design team. Second, the
opening of sourcing offices in Asia gives Cato better control and flexibility
in the manufacturing of our goods. Finally, the success of
our e-commerce initiatives has created a convenient and
increasingly popular shopping alternative.
Mr. Cato indicated that the overall strategy at Cato remains
sound. "We are committed to growing our business by driving
same-store sales profitably, growing our e-commerce business and
adding additional stores when the right space becomes available,"
stated Mr. Cato.
In addition, Mr. Cato remarked that, while Cato is not immune to
the effects of the distressed retail environment, The Company is
better positioned than most. Cato stores are located in strip
shopping centers, which offer convenience for our customers and
lower occupancy costs as compared to malls, where much of the
retail difficulty is occurring. Also, Cato stores are located
in smaller markets with less competition than in major cities. The
company's everyday low-price strategy gives our customers
confidence they can shop at any time and always get the best
value. Additionally, the company has a loyal customer base
that still prefers the in-store shopping experience. Mr. Cato
also stressed that Cato is very strong financially with over
$250 million in cash at year end, and
no debt.
Mr. Cato also reiterated The Company's commitment to its
shareholders. In 2016, Cato returned more than $78 million in value to shareholders through
quarterly dividends of $35.4 million
and share repurchases of $42.6
million. The Company also maintained its quarterly
dividend of $.33 per share, or
$1.32 annually.
In summary, Mr. Cato said, "The challenges of 2016 are
continuing this year. But the good news is we have recognized
our merchandising missteps and are correcting them as quickly as
possible."
In a meeting of the Board of Directors prior to the shareholder
meeting, the Board declared a regular quarterly dividend of
$0.33 per share. This dividend
equates to a dividend of $1.32 on an
annualized basis, and represents an annualized yield of 6.1% based
on the closing market price of $21.53
on May 18, 2017.
During the Annual Meeting, shareholders re-elected Bryan F. Kennedy, III and Thomas B. Henson each for a term expiring in
2020. Shareholders voted yes for a proposal to approve the
compensation of executive officers and voted to hold an advisory
vote on "say on pay" annually. Finally, shareholders ratified
the selection of PricewaterhouseCoopers LLP (PwC) as the company's
independent registered public accounting firm for the fiscal year
ending February 3, 2018.
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 not historical in nature
including, without limitation, statements regarding the Company's
expected or estimated operational and financial results 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, the following: any
actual or perceived deterioration in the conditions that drive
consumer confidence and spending, including, but not limited to,
levels of unemployment, fuel, energy and food costs, wage rates,
tax rates, home values, consumer net worth and the availability of
credit; uncertainties regarding the impact of any governmental
responses to the foregoing conditions; competitive factors and
pricing pressures; our ability to predict and respond to rapidly
changing fashion trends and consumer demands; adverse weather 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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SOURCE The Cato Corporation