CHARLOTTE, N.C., May 18, 2023
/PRNewswire/ -- The Cato Corporation (NYSE: CATO) today reported
net income of $4.4 million or
$0.22 per diluted share for the first
quarter ended April 29, 2023,
compared to net income of $9.7
million or $0.46 per diluted
share for the first quarter ended April
30, 2022.
Sales for the first quarter ended April
29, 2023 were $190.3 million,
or a decrease of 7% from sales of $204.9
million for the first quarter ended April 30, 2022. The Company's same-store
sales for the quarter decreased 6% compared to the same period in
2022.
"Our customer continues to feel the strain of higher interest
rates and inflation on their discretionary income, which has
negatively impacted our sales for the first quarter," said
John Cato, Chairman, President and
Chief Executive Officer. "We are finally experiencing
sustained relief from previous supply chain challenges, but the
continued volatility in the economy causes us to remain cautious
about the remainder of the year."
First-quarter gross margin as a percentage of sales increased
from 35.5% in 2022 to 35.8% in 2023. The improved merchandise
margin was driven by reduced markdowns attributable to on-time
merchandise shipments, coupled with lower freight and distribution
costs. Selling, General and Administrative expenses as a
percent of sales increased from 29.5% to 32.5% of sales during the
quarter due to increased operating expenses, including higher
wages, combined with the effects of deleveraging resulting from
sales decline, when compared to the prior year. Income tax
expense for the quarter was $2.1
million compared to $1.9
million last year.
During the first quarter ended April 29,
2023, the Company opened 4 stores and permanently closed 20
stores. As of April 29, 2023,
the Company operated 1,264 stores in 32 states, compared to 1,315
stores in 32 states as of April 30,
2022.
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, 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
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CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
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FOR THE PERIODS
ENDED APRIL 29, 2023 AND APRIL 30, 2022
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(Dollars in thousands,
except per share data)
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Quarter
Ended
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April
29,
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%
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April 30,
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%
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2023
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Sales
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2022
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Sales
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REVENUES
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Retail
sales
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$
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190,311
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100.0 %
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$
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204,933
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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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1,739
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0.9 %
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1,788
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0.9 %
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Total revenues
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192,050
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100.9 %
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206,721
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100.9 %
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GROSS MARGIN
(Memo)
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68,224
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35.8 %
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72,690
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35.5 %
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COSTS AND EXPENSES,
NET
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Cost of goods
sold
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122,087
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64.2 %
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132,243
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64.5 %
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Selling, general
and administrative
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61,934
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32.5 %
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60,441
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29.5 %
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Depreciation
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2,357
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1.2 %
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2,743
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1.3 %
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Interest and
other income
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(897)
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-0.5 %
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(403)
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-0.2 %
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Costs and expenses, net
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185,481
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97.5 %
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195,024
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95.2 %
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Income Before Income
Taxes
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6,569
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3.5 %
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11,697
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5.7 %
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Income Tax
Expense
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2,141
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1.1 %
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1,949
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1.0 %
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Net
Income
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$
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4,428
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2.3 %
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$
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9,748
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4.8 %
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Basic Earnings Per
Share
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$
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0.22
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$
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0.46
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Diluted Earnings Per
Share
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$
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0.22
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$
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0.46
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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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April
29,
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January 28,
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2023
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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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38,103
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$
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20,005
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Short-term
investments
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87,750
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108,652
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Restricted
cash
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3,826
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3,787
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Accounts
receivable - net
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29,731
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26,497
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Merchandise
inventories
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106,813
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112,056
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Other current
assets
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7,298
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6,676
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Total Current
Assets
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273,521
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277,673
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Property and Equipment
- net
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74,187
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70,382
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Noncurrent Deferred
Income Taxes
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9,938
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9,213
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Other Assets
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21,478
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21,596
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Right-of-Use Assets,
net
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155,512
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174,276
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TOTAL
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$
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534,636
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$
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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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135,934
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$
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135,597
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Current Lease
Liability
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49,707
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67,360
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Noncurrent
Liabilities
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16,449
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16,183
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Lease
Liability
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105,765
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107,407
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Stockholders'
Equity
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226,781
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226,593
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TOTAL
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$
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534,636
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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-1q-earnings-301828036.html
SOURCE The Cato Corporation