Welcome!

News Feed Item

Cato Reports 2Q EPS of $.56, Exceeds Guidance

Provides Second Half Guidance

CHARLOTTE, N.C., Aug. 21, 2014 /PRNewswire/ -- The Cato Corporation (NYSE: CATO) today reported net income of $15.7 million or $.56 per diluted share for the second quarter ended August 2, 2014, compared to net income of $14.8 million or $.51 per diluted share for the second quarter ended August 3, 2013.  Net income increased 6% and earnings per diluted share increased 10% from the prior year. Earnings per share benefited $.03 in the second quarter due to share repurchases.  Sales for the second quarter ended August 2, 2014 were $243.8 million, up 6% from sales of $229.4 million last year.  Second quarter same-store sales increased 3%.

For the six months ended August 2, 2014, the Company earned net income of $45.7 million or $1.61 per diluted share, compared with net income of $45.6 million or $1.56 per diluted share for the six months ended August 3, 2013.  Net income was flat and earnings per diluted share increased 3%.  Earnings per share benefited $.05 in the first half due to share repurchases.  Sales for the first half were $526.2 million, up 6% to the prior year's first half sales of $496.6 million.  Same-store sales for the first half were up 3% from the prior year.

"Second quarter same-store sales were in line with our year-to-date trend," said John Cato, Chairman, President, and Chief Executive Officer.  "However, we continue to expect the second half earnings per diluted share will be within our original guidance range, updated for share repurchases, of $.21 to $.30."

Second quarter gross margin was 38.9% compared to 36.8% last year due primarily to higher merchandise margins.  Second quarter SG&A costs as a percent of sales increased to 28.0% from 25.7% last year primarily as a result of higher incentive compensation and point-of-sale (POS) equipment upgrades.  The effective tax rate for the quarter was 36.8% compared to 36.0% last year, primarily due to the lack of the Work Opportunity Tax Credit (WOTC) this year, which has not been renewed by Congress.

Our guidance of earnings per diluted share for the second half is unchanged, but is updated for share repurchases, at $.21 to $.30.  By quarter, earnings per share are estimated to be in the range of $.08 to $.13 versus $.17 last year for the third quarter and $.13 to $.17 versus $.13 last year for the fourth quarter.  Comparable store sales for both the third and fourth quarters are estimated to be in the range of down 2% to flat.  Based on year-to-date results and this guidance for the second half, earnings per diluted share are expected to be within the adjusted range of $1.82 to $1.91 versus $1.86 last year, a decrease of 2% to an increase of 3%.

During the first half, the Company opened 11 new stores, relocated one store and closed three stores.  The Company now expects to open 46 stores, down from the original plan of 65.  As of August 2, 2014, The Cato Corporation operated 1,328 stores in 32 states, compared to 1,306 stores in 31 states as of August 3, 2013.

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 accessories and apparel including jewelry, handbags and shoes at exceptional prices every day.  It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day.  Additional information on The Cato Corporation is available at www.catocorp.com.

Statements in this press release not historical in nature including, without limitation, statements regarding the Company's expected or estimated financial results for the third and fourth quarters 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: general economic conditions; competitive factors and pricing pressures; the Company's ability to predict fashion trends; consumer apparel buying patterns; adverse weather conditions and inventory risks due to shifts in market demand 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, as amended or supplemented, 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 AUGUST 2, 2014 AND AUGUST 3, 2013

(Dollars in thousands, except per share data)


















Quarter Ended


Six Months Ended


















August 2,

%


August 3,

%


August 2,

%


August 3,

%


2014

Sales


2013

Sales


2014

Sales


2013

Sales

















REVENUES
















  Retail sales

$

243,775

100.0%


$

229,378

100.0%


$

526,238

100.0%


$

496,559

100.0%

  Other income (principally finance,

    late fees and layaway charges)

















2,685

1.1%



2,340

1.0%



4,955

0.9%



4,857

1.0%

















    Total revenues


246,460

101.1%



231,718

101.0%



531,193

100.9%



501,416

101.0%

















GROSS MARGIN (Memo)


94,736

38.9%



84,428

36.8%



212,835

40.4%



194,708

39.2%

















COSTS AND EXPENSES, NET
















  Cost of goods sold


149,039

61.1%



144,950

63.2%



313,403

59.6%



301,851

60.8%

  Selling, general and administrative


68,332

28.0%



58,965

25.7%



135,819

25.8%



118,354

23.8%

  Depreciation


5,424

2.2%



5,436

2.4%



10,875

2.1%



10,885

2.2%

  Interest and other income


(1,099)

-0.5%



(730)

-0.3%



(1,841)

-0.4%



(1,605)

-0.3%

















    Cost and expenses, net


221,696

90.8%



208,621

91.0%



458,256

87.1%



429,485

86.5%

































Income Before Income Taxes


24,764

10.2%



23,097

10.1%



72,937

13.9%



71,931

14.5%

















Income Tax Expense


9,113

3.7%



8,322

3.6%



27,279

5.2%



26,317

5.3%

















Net Income

$

15,651

6.4%


$

14,775

6.4%


$

45,658

8.7%


$

45,614

9.2%

































Basic Earnings Per Share

$

0.56



$

0.51



$

1.61



$

1.56


































Diluted Earnings Per Share

$

0.56



$

0.51



$

1.61



$

1.56


 


 

THE CATO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS 

(Dollars in thousands)


















August 2,



August 3,



February 1,







2014



2013



2014







(Unaudited)



(Unaudited)


























ASSETS
















Current Assets
















  Cash and cash equivalents

$

92,247



$

88,559



$

79,427






  Short-term investments


158,198




157,326




161,128






  Restricted Cash


4,692




4,807




4,701






  Accounts receivable - net


40,315




39,908




39,224






  Merchandise inventories


116,026




111,206




150,861






  Other current assets


11,970




15,834




11,407






















Total Current Assets


423,448




417,640




446,748






















Property and Equipment - net


145,614




139,550




141,129






















Noncurrent Deferred Income Taxes


1,375




0




1,373






















Other Assets


9,674




10,223




7,668






















      TOTAL

$

580,111



$

567,413



$

596,918






















LIABILITIES AND STOCKHOLDERS' EQUITY






























Current Liabilities

$

168,934



$

154,002



$

177,131






















Noncurrent Liabilities


31,951




29,850




28,678






















Stockholders' Equity


379,226




383,561




391,109






















      TOTAL

$

580,111



$

567,413



$

596,918






 

 

SOURCE The Cato Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"LinearHub provides smart video conferencing, which is the Roundee service, and we archive all the video conferences and we also provide the transcript," stated Sunghyuk Kim, CEO of LinearHub, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
Things are changing so quickly in IoT that it would take a wizard to predict which ecosystem will gain the most traction. In order for IoT to reach its potential, smart devices must be able to work together. Today, there are a slew of interoperability standards being promoted by big names to make this happen: HomeKit, Brillo and Alljoyn. In his session at @ThingsExpo, Adam Justice, vice president and general manager of Grid Connect, will review what happens when smart devices don’t work togethe...
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Discover top technologies and tools all under one roof at April 24–28, 2017, at the Westin San Diego in San Diego, CA. Explore the Mobile Dev + Test and IoT Dev + Test Expo and enjoy all of these unique opportunities: The latest solutions, technologies, and tools in mobile or IoT software development and testing. Meet one-on-one with representatives from some of today's most innovative organizations
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 7-9, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and E...
Hardware virtualization and cloud computing allowed us to increase resource utilization and increase our flexibility to respond to business demand. Docker Containers are the next quantum leap - Are they?! Databases always represented an additional set of challenges unique to running workloads requiring a maximum of I/O, network, CPU resources combined with data locality.
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
WebRTC sits at the intersection between VoIP and the Web. As such, it poses some interesting challenges for those developing services on top of it, but also for those who need to test and monitor these services. In his session at WebRTC Summit, Tsahi Levent-Levi, co-founder of testRTC, reviewed the various challenges posed by WebRTC when it comes to testing and monitoring and on ways to overcome them.
"This week we're really focusing on scalability, asset preservation and how do you back up to the cloud and in the cloud with object storage, which is really a new way of attacking dealing with your file, your blocked data, where you put it and how you access it," stated Jeff Greenwald, Senior Director of Market Development at HGST, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.