The Cato Corporation (NYSE: CATO) recently declared net income of $22.20M or $.850 per diluted share for the 1st- quarter finished April 29, 2017, contrast to net income of $35.90M or $1.290 per diluted share for the 1st- quarter finished April 30, 2016. Net income reduced 38.00 percent and earnings per diluted share reduced 34.00 percent for the quarter. Sales for the 1st- quarter were $237.70M, or a reduce of 17.00 percent from sales of $285.50M for the 1st- quarter finished April 30, 2016. The Company’s similar-store sales for the quarter diminished 17.00 percent to last year.
“Our negative sales trend persisted throughout the 1st- quarter, impacting margins and earnings as we continued to work through our merchandise missteps,” stated John Cato, Chairman, President, and CEO. “It is taking longer to work through these issues than expected and the remainder of the year will be influenced. We imagine earnings for the year to be below last year.”
Gross margin reduced 390.00 basis points to 38.70 percent of sales in the quarter, mainly because of lower merchandise margins and deleveraging of buying and occupancy costs. SG&A costs as a percent of sales increased 190.00 basis points to 26.80 percent throughout the quarter mainly because of deleveraging of store costs, offset by lower incentive compensation. The effective tax rate reduced to 14.70 percent as compared to the prior year at 28.50 percent because of reduced earnings, ongoing tax saving programs and favorable tax adjustments in the quarter. The Company finished the quarter with cash and short-term investments of $235.00M.
Throughout the 1st- quarter, the Company opened 3- stores and relocated one store. As of April 29, 2017, the Company operated 1,374.00 stores in 33.00 states, contrast to 1,372.00 stores in 33.00 states as of April 30, 2016.
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 daily. The Company also offers exclusive merchandise found in its Cato stores. Versona is an exclusive fashion destination offering apparel and accessories numbering jewelry, handbags and shoes at outstanding prices each day. Select Versona merchandise can also be found. It’s Fashion offers fashion with a concentrate on the most recent trendy styles for the entire family at low prices each day.