CHARLOTTE, N.C., Aug. 19, 2021 /PRNewswire/ -- The Cato
Corporation (NYSE: CATO) today reported net income of $14.0 million or $0.62 per diluted share for the second quarter
ended July 31, 2021, compared to a
net loss of $7.2 million or
($0.30) per diluted share for the
second quarter ended August 1,
2020.
Sales for fiscal 2020 were significantly impacted by the closure
of our stores for six weeks due to the COVID-19 pandemic, beginning
March 19, 2020. Due to the impact of
the unprecedented closures, the Company will report sales compared
to the past two years. Sales for the second quarter ended
July 31, 2021 were $206.0 million, or an increase of 24% from sales
of $166.3 million for the second
quarter ended August 1, 2020.
Compared to the same period in 2019, sales decreased 2% from sales
of $210.4 million for the quarter
ended August 3, 2019. The Company's
same-store sales for the quarter increased 23% compared to 2020 and
decreased 5% when compared to the same period in 2019.
For the six months ended July 31,
2021, the Company reported net income of $34.7 million or $1.54 per diluted share, compared to a net loss
of $35.6 million or ($1.48) per diluted share for the six months
ended August 1, 2020. Sales for
the six months ended July 31, 2021
were $417.2 million, an increase of
57% to sales of $265.1 million for
the six months ended August 1,
2020. Compared to the same period in 2019, sales decreased 5%
from sales of $438.4 million for
the six months ended August 3,
2019. Year-to-date same-store sales increased 56% to 2020 and
decreased 7% compared to the same period in 2019.
"Our sales were favorably impacted during the first half of the
year by increased vaccination availability coupled with pent-up
demand, an increase in social events, summer vacation travel and
anticipated return to work for many customers, but were tempered by
late merchandise shipments driven by continued supply chain
disruptions," stated John Cato,
Chairman, President, and Chief Executive Officer. "We
anticipate seeing some impact to the business due to increased
COVID cases, however we do not expect to see the same level of
impact to the business as experienced in 2020."
Gross margin increased from 20.2% to 43.9% of sales in the
quarter due to higher merchandise margins. SG&A expenses
as a percent of sales increased from 26.4% to 34.5% of sales during
the quarter primarily due to increased employee benefit/bonus
expense and store operating expenses as operating hours have
increased substantially compared to prior year's phased store
reopening following the extended store closure due to COVID. Tax
expense for the quarter was $4.6
million versus a $3.9 million
benefit in the prior year due to the pre-tax loss. The
Company ended the quarter with unrestricted cash and short-term
investments of $216.9 million.
This compares with $137.0 million for
the same period in 2020.
Year-to-date gross margin increased to 42.6% of sales from 18.4%
the prior year primarily due to increased merchandise
margins. The year-to-date SG&A rate was 32.2% versus
36.4% primarily due to leveraging of expenses as a result of
normalized sales and a $5.3 million
non-cash impairment charge in the prior year, partially offset by
higher employee benefit/bonus expense and store operating
expenses. Income tax expense for the first half was
$7.6 million versus a $13.0 million benefit last year.
As of July 31, 2021, the Company
has 1,325 stores in 32 states, compared to 1,333 stores in 31
states as of August 1, 2020.
"As infections continue to increase both abroad and within the
US, we have temporarily reinstated our mask policy for associates
in our stores, DC and Home Office, regardless of vaccination
status," Mr. Cato said. "As always, our associates' and
customers' safety remains foremost in our minds as we continue to
navigate this challenging retail environment and strive to offer
our customers a safe place to shop."
As COVID infections continue to rise as a result of the Delta
variant, there remains a high level of uncertainty as to the impact
COVID will have on the second half of the year. Additionally, the
continued impact of the supply chain disruption still remains a
concern. In light of these uncertainties, we remain
cautiously optimistic about the remainder of the year.
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, 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
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
FOR THE PERIODS
ENDED JULY 31, 2021 AND AUGUST 1, 2020
|
(Dollars in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July
31,
|
%
|
|
August 1,
|
%
|
|
July
31,
|
%
|
|
August 1,
|
%
|
|
2021
|
Sales
|
|
2020
|
Sales
|
|
2021
|
Sales
|
|
2020
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
sales
|
$
|
205,962
|
100.0%
|
|
$
|
166,265
|
100.0%
|
|
$
|
417,196
|
100.0%
|
|
$
|
265,078
|
100.0%
|
Other revenue
(principally finance,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
late fees and layaway charges)
|
|
1,784
|
0.9%
|
|
|
1,905
|
1.1%
|
|
|
3,635
|
0.9%
|
|
|
3,824
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
207,746
|
100.9%
|
|
|
168,170
|
101.1%
|
|
|
420,831
|
100.9%
|
|
|
268,902
|
101.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN
(Memo)
|
|
90,375
|
43.9%
|
|
|
33,529
|
20.2%
|
|
|
177,934
|
42.6%
|
|
|
48,745
|
18.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
115,587
|
56.1%
|
|
|
132,736
|
79.8%
|
|
|
239,262
|
57.4%
|
|
|
216,333
|
81.6%
|
Selling,
general and administrative
|
|
70,984
|
34.5%
|
|
|
43,957
|
26.4%
|
|
|
134,221
|
32.2%
|
|
|
96,468
|
36.4%
|
Depreciation
|
|
3,137
|
1.5%
|
|
|
3,488
|
2.1%
|
|
|
6,179
|
1.5%
|
|
|
7,494
|
2.8%
|
Interest and
other income
|
|
(515)
|
-0.3%
|
|
|
(961)
|
-0.6%
|
|
|
(1,178)
|
-0.3%
|
|
|
(2,812)
|
-1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses, net
|
|
189,193
|
91.9%
|
|
|
179,220
|
107.8%
|
|
|
378,484
|
90.7%
|
|
|
317,483
|
119.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes
|
|
18,553
|
9.0%
|
|
|
(11,050)
|
-6.6%
|
|
|
42,347
|
10.2%
|
|
|
(48,581)
|
-18.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
4,561
|
2.2%
|
|
|
(3,880)
|
-2.3%
|
|
|
7,642
|
1.8%
|
|
|
(12,994)
|
-4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
$
|
13,992
|
6.8%
|
|
$
|
(7,170)
|
-4.3%
|
|
$
|
34,705
|
8.3%
|
|
$
|
(35,587)
|
-13.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
0.62
|
|
|
$
|
(0.30)
|
|
|
$
|
1.54
|
|
|
$
|
(1.48)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
$
|
0.62
|
|
|
$
|
(0.30)
|
|
|
$
|
1.54
|
|
|
$
|
(1.48)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE CATO
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
July
31,
|
|
|
January
30,
|
|
2021
|
|
|
2021
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
25,354
|
|
|
$
|
17,510
|
Short-term
investments
|
|
191,520
|
|
|
|
126,416
|
Restricted
cash
|
|
3,918
|
|
|
|
3,918
|
Accounts
receivable - net
|
|
51,296
|
|
|
|
52,743
|
Merchandise
inventories
|
|
72,042
|
|
|
|
84,123
|
Other current
assets
|
|
5,421
|
|
|
|
5,840
|
|
|
|
|
|
|
|
Total Current
Assets
|
|
349,551
|
|
|
|
290,550
|
|
|
|
|
|
|
|
Property and
Equipment - net
|
|
67,280
|
|
|
|
72,550
|
|
|
|
|
|
|
|
Noncurrent Deferred
Income Taxes
|
|
5,770
|
|
|
|
5,685
|
|
|
|
|
|
|
|
Other
Assets
|
|
23,441
|
|
|
|
22,850
|
|
|
|
|
|
|
|
Right-of-Use Assets,
net
|
|
144,765
|
|
|
|
199,817
|
|
|
|
|
|
|
|
TOTAL
|
$
|
590,807
|
|
|
$
|
591,452
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
$
|
146,796
|
|
|
$
|
118,513
|
|
|
|
|
|
|
|
Current Lease
Liability
|
|
54,604
|
|
|
|
63,421
|
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
20,550
|
|
|
|
19,705
|
|
|
|
|
|
|
|
Lease
Liability
|
|
95,045
|
|
|
|
143,315
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
273,812
|
|
|
|
246,498
|
|
|
|
|
|
|
|
TOTAL
|
$
|
590,807
|
|
|
$
|
591,452
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/cato-reports-2q-net-income-301358481.html
SOURCE The Cato Corporation