CHARLOTTE, N.C., March 18, 2021 /PRNewswire/ -- The Cato
Corporation (NYSE: CATO) today reported losses for the fourth
quarter and year ended January 30, 2021. For the fourth
quarter, the Company reported a net loss of $6.9 million, or
($0.31) per diluted share, compared
to a net loss of $3.2 million or ($0.13) per diluted share for the prior
fourth quarter ended February 1, 2020. Full-year fiscal
2020 net loss was $46.1 million or ($1.96) per diluted share compared to income
of $35.9
million or $1.46 earnings per diluted share for
2019.
Sales for fiscal fourth quarter ended January 30,
2021 were $153.2 million, a decrease of 19% from sales
of $188.4 million for the fourth quarter
ended February 1, 2020. For the quarter, same-store sales
decreased 20% from last year. For the year, the Company's
sales decreased 30% to $567.5 million from 2019 sales
of $816.2 million. Same-store sales for the year
decreased 32% to last year.
"We began 2020 with a focus on growing the business," said
John Cato, Chairman, President and
Chief Executive Officer. "As a result of the COVID-19
pandemic, our focus quickly shifted to protecting the
business."
Fourth-quarter gross margin decreased to 29.9% of sales from
34.3% of sales in 2019 primarily due to a reduction in merchandise
contribution combined with the effects of deleveraging occupancy
expense. Selling, general and administrative expenses were
37.0% of sales compared to 35.6% in the prior year. SG&A
costs as a percent of sales were higher in the quarter primarily
due to a store impairment charge of $6.2
million, partially offset by the elimination of incentive
compensation compared to prior year and company-wide expense
reductions. A pre-tax loss and the beneficial effects of the CARES
Act resulted in $2.4 million of tax
benefit versus expense of $0.8
million last year.
For 2020, gross margin decreased to 23.7% of sales from 37.6% of
sales in 2019 due to a reduction in merchandise contribution
combined with the effects of deleveraging occupancy and buying
expenses. 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 impairment charges of $13.7 million and the effects of deleveraging
corporate expenses, partially offset by the elimination of
incentive compensation and company-wide expense reductions.
Income tax benefit for the year was $25.1
million compared to an expense of $7.3 million last year.
"2020 was a challenging year for specialty apparel retail.
We made some difficult decisions in an effort to sustain our
business in the wake of the pandemic," Mr. Cato said.
"Despite the challenges of the COVID-19 pandemic, Cato continues to
maintain a strong balance sheet, with $143.9 million in unrestricted cash and
short-term investments and no debt. As we begin to regain
ground lost during 2020, our priority will continue to be the
health and safety of our associates and customers, providing a safe
shopping environment, while offering great value to our
customers." For the fiscal year ended January 30, 2021,
the Company opened 76 stores, relocated 3 stores and closed 27
stores. As of January 30, 2021, the Company operated
1,330 stores in 33 states.
As the effects of the pandemic continue into 2021, there remains
a high level of uncertainty about when these effects will subside,
the continued impact they will have on our customers' buying habits
and the duration of supply chain disruption. In light of
these uncertainties, we are not planning any store development for
2021, are keeping our capital expenditures to a minimum and not
providing a 2021 outlook.
Statements, in this press release that express a belief,
expectation or intention, as well as those that are not historical
fact, including, without limitation, any statements regarding the
potential impact of the COVID-19 pandemic on the Company's
business, under the Private Securities Litigation Reform Act of
1995. We can give no assurance that actual results or events will
not differ materially from those expressed or implied in any such
forward-looking statements. 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, 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, regulations or
governmental 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 our
ability of any such new stores to grow and perform as expected;
adverse weather, public health threats (including the global
coronavirus (COVID-19) pandemic) 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 we file with or
furnish to the Securities and Exchange Commission ("SEC") from time
to time. The Company does not undertake, to publicly update
or revise any forward-looking statements made in this press release
even if experience or future changes make it clear that any
outcomes expressed or implied by such forward-looking statements
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 JANUARY 30, 2021 AND FEBRUARY 1, 2020
|
(Dollars in
thousands, except per share data)
|
|
|
Quarter
Ended
|
|
Twelve Months
Ended
|
|
|
January
30,
|
%
|
|
February
1,
|
%
|
|
January
30,
|
%
|
|
February
1,
|
%
|
|
2021
|
Sales
|
|
2020
|
Sales
|
|
2021
|
Sales
|
|
2020
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
sales
|
$
|
153,233
|
100.0%
|
|
$
|
188,404
|
100.0%
|
|
$
|
567,516
|
100.0%
|
|
$
|
816,184
|
100.0%
|
Other revenue
(principally finance,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
late fees and layaway charges)
|
|
2,185
|
1.4%
|
|
|
2,475
|
1.3%
|
|
|
7,595
|
1.3%
|
|
|
9,151
|
1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
155,418
|
101.4%
|
|
|
190,879
|
101.3%
|
|
|
575,111
|
101.3%
|
|
|
825,335
|
101.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN
(Memo)
|
|
45,784
|
29.9%
|
|
|
64,577
|
34.3%
|
|
|
134,329
|
23.7%
|
|
|
307,278
|
37.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
107,449
|
70.1%
|
|
|
123,827
|
65.7%
|
|
|
433,187
|
76.3%
|
|
|
508,906
|
62.4%
|
Selling,
general and administrative
|
|
56,726
|
37.0%
|
|
|
67,065
|
35.6%
|
|
|
205,079
|
36.1%
|
|
|
263,802
|
32.3%
|
Depreciation
|
|
3,568
|
2.3%
|
|
|
3,963
|
2.1%
|
|
|
14,681
|
2.6%
|
|
|
15,485
|
1.9%
|
Interest and
other income
|
|
(3,027)
|
-2.0%
|
|
|
(1,574)
|
-0.8%
|
|
|
(6,630)
|
-1.2%
|
|
|
(6,065)
|
-0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses, net
|
|
164,716
|
107.5%
|
|
|
193,281
|
102.6%
|
|
|
646,317
|
113.9%
|
|
|
782,128
|
95.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes
|
|
(9,298)
|
-6.1%
|
|
|
(2,402)
|
-1.3%
|
|
|
(71,206)
|
-12.6%
|
|
|
43,207
|
5.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
(2,370)
|
-1.5%
|
|
|
808
|
0.4%
|
|
|
(25,069)
|
-4.4%
|
|
|
7,310
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
$
|
(6,928)
|
-4.5%
|
|
$
|
(3,210)
|
-1.7%
|
|
$
|
(46,137)
|
-8.1%
|
|
$
|
35,897
|
4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
(0.31)
|
|
|
$
|
(0.13)
|
|
|
$
|
(1.96)
|
|
|
$
|
1.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
$
|
(0.31)
|
|
|
$
|
(0.13)
|
|
|
$
|
(1.96)
|
|
|
$
|
1.46
|
|
THE CATO
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Dollars in
thousands)
|
|
|
January
30,
|
|
|
February
1,
|
|
2021
|
|
|
2020
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
17,510
|
|
|
$
|
11,824
|
Short-term
investments
|
|
126,416
|
|
|
|
200,387
|
Restricted
cash
|
|
3,918
|
|
|
|
3,896
|
Accounts
receivable - net
|
|
52,320
|
|
|
|
26,088
|
Merchandise
inventories
|
|
84,123
|
|
|
|
115,365
|
Other current
assets
|
|
5,839
|
|
|
|
5,237
|
|
|
|
|
|
|
|
Total Current
Assets
|
|
290,126
|
|
|
|
362,797
|
|
|
|
|
|
|
|
Property and
Equipment - net
|
|
72,550
|
|
|
|
88,667
|
|
|
|
|
|
|
|
Noncurrent Deferred
Income Taxes
|
|
5,685
|
|
|
|
8,636
|
|
|
|
|
|
|
|
Other
Assets
|
|
22,850
|
|
|
|
24,073
|
|
|
|
|
|
|
|
Right-of-Use Assets,
net
|
|
199,817
|
|
|
|
200,803
|
|
|
|
|
|
|
|
TOTAL
|
$
|
591,028
|
|
|
$
|
684,976
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
$
|
116,913
|
|
|
$
|
136,153
|
|
|
|
|
|
|
|
Current Lease
Liability
|
|
63,421
|
|
|
|
63,149
|
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
19,536
|
|
|
|
21,976
|
|
|
|
|
|
|
|
Lease
Liability
|
|
143,315
|
|
|
|
147,184
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
247,843
|
|
|
|
316,514
|
|
|
|
|
|
|
|
TOTAL
|
$
|
591,028
|
|
|
$
|
684,976
|
View original
content:http://www.prnewswire.com/news-releases/cato-reports-4q-and-full-year-loss-301249837.html
SOURCE The Cato Corporation