CHARLOTTE, N.C., March 16,
2023 /PRNewswire/ -- The Cato Corporation (NYSE:
CATO) today reported a net loss of $3.0
million or ($0.14) per diluted
share for the fourth quarter ended January
28, 2023, compared to a net loss of $6.5 million or ($0.30) per diluted share for the fourth quarter
ended January 29, 2022. Full-year
fiscal 2022 net income was $0.0
million or $0.00 per diluted
share compared to net income of $36.8
million or $1.65 per diluted
share for 2021.
Sales for the fourth quarter ended January 28, 2023 were $177.5 million, or an increase of 2% from sales
of $173.6 million for the fourth
quarter ended January 29, 2022. The
Company's same-store sales for the quarter increased 3% compared to
the same period in 2021.
For the year, the Company's sales decreased 1% to $752.4
million from 2021 sales of $761.4 million.
Same-store sales for the year decreased 1% compared to
2021.
"We are pleased that we were able to deliver comparable store
sales growth in the fourth quarter, in these challenging economic
times. That said, we were negatively impacted by late
merchandise shipments for most of the year, leading to
significantly more markdowns than anticipated," said John Cato, Chairman, President and Chief
Executive Officer. "The impact of rising inflation and higher
interest rates on our customer's discretionary income, coupled with
the negative impact of supply chain disruption on our merchandise
assortment was difficult to overcome. Despite the challenges
experienced throughout 2022, we have continued investing in key
capital projects and efficiency initiatives in support of our
long-term growth."
Fourth-quarter gross margin decreased from 36.9% to 31.3% of
sales in 2022 reflecting pressure from increased markdowns, coupled
with higher freight and distribution costs. Selling, General
and Administrative expenses as a percent of sales decreased from
40.5% to 33.8% of sales during the quarter primarily due to lower
store equipment expense and employee incentive compensation
expense, partially offset by increased store operating expenses,
related to investments in hourly associate wages and increased
operating hours compared to the prior year. Income tax for
the quarter was a benefit of $1.2
million compared to an expense of $0.2 million last year.
For the full year 2022, gross margin decreased from 40.5% of
sales in 2021 to 32.3% of sales reflecting pressure from increased
markdowns. Selling, general and administrative expenses
decreased to 32.3% of sales compared to 35.1% in the prior
year. The selling, general and administrative rate decrease
was primarily due to lower employee incentive compensation expense
and store equipment expense, partially offset by increased
store operating expenses, related to investments in hourly
associate wages and increased operating hours compared to prior
year. Income tax expense for the year was $1.7 million compared to an expense of
$2.1 million last year. Income
tax expense for the year is primarily related to overseas
operations.
"As we look ahead, we remain focused on our strategy of offering
great fashion at a value, with outstanding customer service.
We are planning cautiously for 2023, in an effort to remain nimble
in this challenging economic environment. We anticipate the impact
of inflation on our operating expenses and associate wages to
continue. Additionally, the current inflationary and higher
interest rate environment will continue to pressure our customers'
discretionary spending, " stated Mr. Cato. "We view 2023 as
an opportunity to strengthen the Company, as we continue
investments in support of our future growth."
During 2022, the Company opened 15 stores, relocated 4 stores
and permanently closed 46 stores. As of January 28, 2023, the Company operated 1,280
stores in 32 states, compared to 1,311 stores in 32 states as of
January 29, 2022. During 2023,
the Company plans to open up to 30 new stores and close up to 50
stores as leases expire. These store closings are anticipated
to have minimal financial impact.
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 JANUARY 28, 2023 AND JANUARY 29, 2022
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(Dollars in thousands,
except per share data)
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Quarter
Ended
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Twelve Months
Ended
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January
28,
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%
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January 29,
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%
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January
28,
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%
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January 29,
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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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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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177,510
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100.0 %
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$
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173,649
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100.0 %
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$
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752,370
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100.0 %
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$
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761,358
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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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1,539
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0.9 %
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2,578
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1.5 %
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6,890
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0.9 %
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7,913
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1.0 %
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Total revenues
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179,049
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100.9 %
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176,227
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101.5 %
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759,260
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100.9 %
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769,271
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101.0 %
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GROSS MARGIN
(Memo)
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55,590
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31.3 %
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64,071
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36.9 %
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242,706
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32.3 %
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308,293
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40.5 %
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COSTS AND EXPENSES,
NET
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Cost of goods
sold
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121,920
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68.7 %
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109,578
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63.1 %
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509,664
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67.7 %
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453,065
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59.5 %
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Selling, general
and administrative
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60,042
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33.8 %
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70,338
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40.5 %
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242,648
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32.3 %
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267,026
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35.1 %
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Depreciation
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2,662
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1.5 %
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3,004
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1.7 %
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11,080
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1.5 %
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12,356
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1.6 %
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Interest and
other income
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(1,337)
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-0.8 %
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(422)
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-0.2 %
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(5,902)
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-0.8 %
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(2,141)
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-0.3 %
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Costs and expenses, net
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183,287
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103.3 %
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182,498
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105.1 %
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757,490
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100.7 %
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730,306
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95.9 %
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Income (Loss) Before
Income Taxes
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(4,238)
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-2.4 %
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(6,271)
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-3.6 %
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1,770
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0.2 %
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38,965
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5.1 %
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(1,246)
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-0.7 %
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192
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0.1 %
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1,741
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0.2 %
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2,121
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0.3 %
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Net Income
(Loss)
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$
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(2,992)
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-1.7 %
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$
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(6,463)
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-3.7 %
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$
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29
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0.0 %
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$
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36,844
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4.8 %
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Basic Earnings Per
Share
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$
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(0.14)
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$
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(0.30)
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$
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0.00
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$
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1.65
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Diluted Earnings Per
Share
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$
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(0.14)
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$
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(0.30)
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$
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0.00
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$
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1.65
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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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January
28,
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January 29,
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2023
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2022
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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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20,005
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$
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19,759
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Short-term
investments
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108,652
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145,998
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Restricted
cash
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3,787
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3,919
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Accounts
receivable - net
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26,497
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55,812
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Merchandise
inventories
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112,056
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124,907
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Other current
assets
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6,676
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5,273
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Total Current
Assets
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277,673
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355,668
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Property and Equipment
- net
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70,382
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63,083
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Noncurrent Deferred
Income Taxes
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9,213
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9,313
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Other Assets
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21,596
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24,437
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Right-of-Use Assets,
net
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174,276
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181,265
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TOTAL
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$
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553,140
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$
|
633,766
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LIABILITIES AND
STOCKHOLDERS' EQUITY
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Current
Liabilities
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$
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135,597
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$
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177,327
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Current Lease
Liability
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67,360
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66,808
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Noncurrent
Liabilities
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16,183
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17,914
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Lease
Liability
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107,407
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117,521
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Stockholders'
Equity
|
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226,593
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254,196
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TOTAL
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$
|
553,140
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$
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633,766
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View original
content:https://www.prnewswire.com/news-releases/cato-reports-4q-and-full-year-earnings-301773543.html
SOURCE The Cato Corporation