CHARLOTTE, N.C., March 19, 2020 /PRNewswire/ -- The Cato
Corporation (NYSE: CATO) today reported earnings for the
fourth quarter and year ended February 1, 2020. For the
fourth quarter, the Company reported a net loss of $3.2
million, or a loss of $0.13 per diluted share, compared
to a net loss of $3.2 million or a loss of
$0.13 per diluted share for the
prior fourth quarter ended February 2, 2019. Full-year
fiscal 2019 net income was $35.9
million or $1.46 per diluted share compared
to $30.5 million or $1.23 per diluted share for
2018. For the year, net income increased 18% and earnings per
diluted share increased 19% from the prior year.
Sales for fiscal fourth quarter ended February 1,
2020 were $188.4 million, a decrease of 1% from sales
of $190.3 million for the fourth quarter
ended February 2, 2019. For the quarter, same-store
sales increased 1% from last year. For the year, the
Company's sales decreased 1% to $816.2 million from 2018
sales of $821.1 million. Same-store sales for the
year increased 2% to last year.
"We are encouraged by the growth experienced in 2019, building
off a stabilized 2018," said John
Cato, Chairman, President and Chief Executive
Officer. "We continued to focus on our product and
merchandise assortments, while maintaining strong inventory
control."
Fourth-quarter gross margin increased to 34.3% of sales from
33.1% of sales in 2018 due primarily to improved merchandise
margins partially offset by higher occupancy costs. Selling,
general and administrative expenses were 35.6% of sales, compared
to 34.7% in the prior year. SG&A costs as a percent of
sales were higher primarily due to higher incentive compensation
partially offset by lower store impairment charges. Income tax for
the quarter was an expense of $0.8
million compared to a benefit of $0.3
million last year. The tax expense is primarily due to
discrete items that were recognized during the fourth quarter of
2019.
For 2019, gross margin increased to 37.6% of sales from 36.4% of
sales in 2018 due to increased merchandise margins. Selling,
general and administrative expenses increased to 32.3% of
sales compared to 31.9% in the prior year. The selling,
general and administrative expense increase was primarily due to
increased incentive compensation partially offset by lower store
impairment charges and insurance costs. Income tax for the
year was an expense of $7.3 million
compared to an expense of $2.6
million last year.
"Cato continues to maintain a strong balance sheet, with
approximately $212 million in unrestricted cash and
short-term investments and no debt," Mr. Cato said. "As a
company, our priority remains to provide great value to our
customers, opportunity for growth to our associates, and strong
returns to our shareholders." During 2019, the Company
returned $42.2 million to shareholders through dividends
of $32.6 million and share repurchases of $9.6
million. The Company maintained its quarterly dividend
of $0.33 per share, or $1.32 over the year.
For the fiscal year ended February 1, 2020, the Company
opened 5 stores and closed 35 stores. As of February 1,
2020, the Company operated 1,281 stores in 31 states.
We continue to assess the potential impact of the coronavirus,
which remains uncertain at this time. Because of the
uncertainties we are not providing a 2020 outlook or
assumptions. There remains a high level of uncertainty over
the extent of supply chain disruption, and as many other retailers,
we are seeing the dramatic impact on our customers and are unsure
how long this will continue.
We are monitoring this unprecedented situation and continue to
be mindful of the current events unfolding and of the safety of our
customers and associates. And although we cannot quantify the
impact of this unprecedented situation, first quarter results will
be negatively impacted.
Statements in this press release not historical in
nature including, without limitation, statements
regarding the Company's expected or estimated operational and
financial results and potential impact 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 tariffs; 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; our ability to successfully open new stores as
planned 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) 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 FEBRUARY 1, 2020 AND FEBRUARY 2, 2019
|
(Dollars in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February
1,
|
%
|
|
February
2,
|
%
|
|
February
1,
|
%
|
|
February
2,
|
%
|
|
2020
|
Sales
|
|
2019
|
Sales
|
|
2020
|
Sales
|
|
2019
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
sales
|
$
|
188,404
|
100.0%
|
|
$
|
190,348
|
100.0%
|
|
$
|
816,184
|
100.0%
|
|
$
|
821,113
|
100.0%
|
Other revenue
(principally finance,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
late fees and layaway charges)
|
|
2,475
|
1.3%
|
|
|
2,087
|
1.1%
|
|
|
9,151
|
1.1%
|
|
|
8,551
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
190,879
|
101.3%
|
|
|
192,435
|
101.1%
|
|
|
825,335
|
101.1%
|
|
|
829,664
|
101.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN
(Memo)
|
|
64,577
|
34.3%
|
|
|
62,915
|
33.1%
|
|
|
307,278
|
37.6%
|
|
|
298,578
|
36.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
123,827
|
65.7%
|
|
|
127,433
|
67.0%
|
|
|
508,906
|
62.4%
|
|
|
522,535
|
63.6%
|
Selling,
general and administrative
|
|
67,065
|
35.6%
|
|
|
65,990
|
34.7%
|
|
|
263,802
|
32.3%
|
|
|
262,606
|
31.9%
|
Depreciation
|
|
3,963
|
2.1%
|
|
|
3,993
|
2.1%
|
|
|
15,485
|
1.9%
|
|
|
16,463
|
2.0%
|
Interest and
other income
|
|
(1,574)
|
-0.8%
|
|
|
(1,432)
|
-0.8%
|
|
|
(6,065)
|
-0.7%
|
|
|
(4,991)
|
-0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses, net
|
|
193,281
|
102.6%
|
|
|
195,984
|
103.0%
|
|
|
782,128
|
95.8%
|
|
|
796,613
|
97.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
(Loss) Taxes
|
|
(2,402)
|
-1.3%
|
|
|
(3,549)
|
-1.9%
|
|
|
43,207
|
5.3%
|
|
|
33,051
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
(Benefit)/Expense
|
|
808
|
0.4%
|
|
|
(317)
|
-0.2%
|
|
|
7,310
|
0.9%
|
|
|
2,590
|
0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
$
|
(3,210)
|
-1.7%
|
|
$
|
(3,232)
|
-1.7%
|
|
$
|
35,897
|
4.4%
|
|
$
|
30,461
|
3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
(0.13)
|
|
|
$
|
(0.13)
|
|
|
$
|
1.46
|
|
|
$
|
1.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
$
|
(0.13)
|
|
|
$
|
(0.13)
|
|
|
$
|
1.46
|
|
|
$
|
1.23
|
|
THE CATO
CORPORATION
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February
1,
|
|
|
February
2,
|
|
2020
|
|
|
2019
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
11,824
|
|
|
$
|
24,603
|
Short-term
investments
|
|
200,387
|
|
|
|
182,711
|
Restricted
cash
|
|
3,896
|
|
|
|
3,802
|
Accounts
receivable - net
|
|
26,088
|
|
|
|
28,137
|
Merchandise
inventories
|
|
115,365
|
|
|
|
119,585
|
Other current
assets
|
|
5,237
|
|
|
|
11,750
|
|
|
|
|
|
|
|
Total Current
Assets
|
|
362,797
|
|
|
|
370,588
|
|
|
|
|
|
|
|
Property and
Equipment - net
|
|
88,667
|
|
|
|
94,304
|
|
|
|
|
|
|
|
Noncurrent Deferred
Income Taxes
|
|
8,636
|
|
|
|
11,209
|
|
|
|
|
|
|
|
Other
Assets
|
|
24,073
|
|
|
|
21,805
|
|
|
|
|
|
|
|
Right-of-Use Assets,
net
|
|
200,803
|
|
|
|
0
|
|
|
|
|
|
|
|
TOTAL
|
$
|
684,976
|
|
|
$
|
497,906
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
$
|
136,153
|
|
|
$
|
141,086
|
|
|
|
|
|
|
|
Current Lease
Liability
|
|
63,149
|
|
|
|
0
|
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
21,976
|
|
|
|
39,984
|
|
|
|
|
|
|
|
Lease
Liability
|
|
147,184
|
|
|
|
0
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
316,514
|
|
|
|
316,836
|
|
|
|
|
|
|
|
TOTAL
|
$
|
684,976
|
|
|
$
|
497,906
|
View original
content:http://www.prnewswire.com/news-releases/cato-reports-4q-and-full-year-earnings-301026482.html
SOURCE The Cato Corporation