Cato Reports Third Quarter Net Profit | State / Regional

CHARLOTTE, North Carolina, November 17, 2021 / PRNewswire / – The Cato Corporation (NYSE: CATO) today reported net income of $ 8.6 million Where $ 0.39 per diluted share for the third quarter ended October 30, 2021, compared to a net loss of $ 3.6 million Where ($ 0.15) per diluted share for the third quarter ended October 31, 2020.

Fiscal 2020 sales were strongly impacted by the closure of our stores for six weeks due to the COVID-19 pandemic, as of March 19, 2020. Due to the impact of unprecedented closings, the Company will post sales from the past two years. Revenue for the third quarter ended October 30, 2021 were $ 170.5 million, a 14% increase in sales of $ 149.2 million for the third quarter ended October 31, 2020. Compared to the same period in 2019, sales decreased by 10% compared to sales of $ 189.4 million for the quarter ended November 2, 2019. The Company’s comparable store sales for the quarter increased 14% compared to 2020 and decreased 13% compared to the same period in 2019.

For the nine months ended October 30, 2021, the Company reported net income of $ 43.3 million Where $ 1.93 per diluted share, against a net loss of $ 39.2 million Where ($ 1.64) per diluted share for the nine months ended October 31, 2020. Sales for the nine months ended October 30, 2021 were $ 587.7 million, a 42% increase in sales of $ 414.3 million for the nine months ended October 31, 2020. Compared to the same period in 2019, sales decreased by 6% compared to sales of $ 627.8 million for the nine months ended November 2, 2019. Year-to-date comparable store sales increased 41% compared to 2020 and decreased 9% compared to the same period in 2019.

“We continue to face challenges due to the lingering effects of the pandemic on the retail sector and the economy as a whole,” said Jean Caton, Chairman of the Board, President and Chief Executive Officer. “Our sales for the third quarter were negatively impacted by lower inventory levels linked to further deterioration in the supply chain coupled with an increase in positive cases related to the COVID-19 Delta variant.”

Gross margin increased from 26.7% to 38.9% of sales in the quarter due to higher merchandise margins. General and administrative expenses as a percentage of sales increased from 34.8% to 36.6% of sales in the quarter, mainly due to increased payroll taxes / premiums and store operating expenses as store opening hours have increased significantly compared to the previous year. The tax savings for the quarter were $ 5.7 million due to increased benefits of tax planning initiatives and lower reserves related to uncertain tax positions, offset by higher profit before tax compared to a $ 9.7 million the previous year due to the pre-tax loss. The Company ended the quarter with unallocated cash and short-term investments of $ 200.1 million driven by solid operating cash flow, offset by dividends and share buybacks. This compares with $ 151.4 million for the same period in 2020.

Year-to-date gross margin increased to 41.6% of sales from 21.4% a year earlier, mainly due to increased margins on merchandise. The SG&A rate since the start of the year was 33.5% versus 35.8% mainly due to the leverage effect of expenses, partially offset by the increase in social charges / bonuses. Income tax expense for the nine months ended October 30, 2021 was $ 1.9 million against one $ 22.7 million profit last year.

Since the start of the year, the Company has permanently closed 6 stores. From October 30, 2021, the Company operates 1,324 stores in 32 states, compared to 1,347 stores in 33 states in October 31, 2020.

“While our first half sales benefited from pent-up demand, government stimulus and more reasonable inventory levels, third quarter sales slowed due to lower inventory levels caused by the worsening supply chain disruptions, ”said Mr. Cato. “As we see these conditions persist, coupled with the effects of rising inflation and potential government vaccine mandates, we believe the fourth quarter will be very difficult.”

“As we move into the holidays, amid the lingering effects of the pandemic, the safety of our associates and customers remains our primary focus,” said Mr. Cato. “We strive to provide our customers with a safe place to shop for their favorite fashion trends at a great price with exceptional customer service. “

The Cato Corporation is a leading specialty retailer of discount fashionable clothing and accessories that operates three concepts, “Cato”, “Versona” and “It’s Fashion”. The company’s Cato stores offer exclusive merchandise with a fashion and quality comparable to specialty stores in low-cost malls every day. The Company also offers exclusive merchandise found in its Cato stores at www.catofashions.com. Versona is a one-stop fashion destination offering clothing and accessories including jewelry, handbags and shoes at great prices every day. Some Versona products are also available at www.shopversona.com. It’s Fashion offers fashion with an emphasis on the latest trendy styles for the whole family at low prices every day.

Statements in this press release which express any belief, expectation or intention, as well as those which are not historical fact, Iincluding, without limitation, statements regarding the Company’s expected or estimated operating financial results, activities or opportunities, and the potential impacts and effects of the coronavirus are considered “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations which are subject to known and unknown risks, uncertainties and other factors which could cause actual results to differ materially from those contemplated by forward-looking statements. These factors include, but are not limited to,, any real or perceived deterioration in the conditions that boost consumer confidence and spending, including, but not limited to, social, economic, political and public health conditions and uncertainties, unemployment levels, costs fuel, energy and food, wage rates, tax rates, interest rates, home values, consumer equity and credit availability; changes in laws or regulations affecting our business, including, but not limited to, pricing; uncertainties regarding the impact of any government action regarding, or responses to, the above conditions; competitive factors and pricing pressures; our ability to predict and respond to fashion trends and rapidly changing consumer demands; our ability to successfully implement our new store development strategy to increase new store openings and the ability of those new stores to grow and operate as planned; adverse weather conditions, threats to public health (including the global coronavirus epidemic (COVID-19)) or similar conditions that may affect our sales or operations; inventory risks due to changes in market demand, including the ability to liquidate excess inventory at expected margins; and other factors discussed under “Risk Factors” in Part I, Item 1A of the last annual report filed by the Company on Form 10-K and in other reports that the Company files or provides to the SEC from time to time. to other. The Company does not undertake to publicly update or revise any forward-looking statements even if experience or future changes clearly indicate that the projected results expressed or implied therein will not be achieved. The Company is not responsible for changes made to this press release by wire or Internet services.

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SOURCE The Caton company