The Cato Corporation
05/23/2022 | Press release | Distributed by Public on 05/23/2022 09:51
- Press Release issued May 19, 2022 - Form 8-K
The CATO Corporation
NEWS RELEASE
FOR IMMEDIATE RELEASE
For Further Information Contact:
Charles D. Knight
Executive Vice President
Chief Financial Officer
CATOREPORTS 1Q EARNINGS
CHARLOTTE, N.C. (May 19, 2022) - The Cato Corporation (NYSE: CATO)today reported net
income of $9.7 million or $0.46 per diluted share for the first quarter ended April 30, 2022, compared
to net income of $20.7 million or $0.92 per diluted share for the first quarter ended May 1, 2021.
Sales for the first quarter ended April 30, 2022 were $204.9 million, or a decrease of 3% from sales of
$211.2 million for the first quarter ended May 1, 2021.The Company's same-store sales for the
quarter decreased 2% compared to 2021.
"Our first quarter sales were negatively impacted by cooler, wetter weather,"said John Cato,
Chairman, President and Chief Executive Officer.
"As anticipated, we continued to
experience late
merchandise shipments, a result of the supply chain disruption and overseas COVID restrictions,
coupled with the pressure of inflation on consumers' discretionary income and intermittent store
closings due to the effects of the tight labor market.
"
First-quarter gross margin decreased from 41.5% to 35.5% of sales in 2022 due to lower
merchandise margins.
Selling, General and Administrative expenses as a percent of sales
decreased from 29.9% to 29.5% of sales during the quarter primarily due to decreased incentive
compensation expense, partially offset by increased payroll, reflecting more normalized operations,
compared to the prior year.
Income tax expense for the quarter was $1.9 million compare
d to $3.1
million last year.
"The effects of continued late merchandise shipments, inflation-related increases to our costs and
increased pressure on our customers' discretionary income are expected to remain challenging
throughout the year," stated Mr.Cato."As we move forward, following two years of unpredictable
business cycles, we are cautious about the remainder of the year in the face of these ongoing
uncertainties."
During the first quarter ended April 30, 2022, the Company opened 4 stores and relocated 1 store.
As of April 30, 2022, the Company operated 1,315 stores in 32 states, compared to 1,325 stores in 32
states as of May 1, 2021.
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 ahistorical
fact,
i
ncluding, without limitation, statements regarding the Company'sexpected or estimated operational financial results,
activities or opportunities, and potential impacts and effectsof the coronavirus are considered "forward-looking" withinthe
meaning of The Private Securities Litigation Reform Actof 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 actualresults
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 conditionsthat drive consumer confidence and spending, including,but not
limited to, prevailing social, economic, political and public healthconditions and uncertainties, levels of unemployment,
fuel, energy and food costs, wage rates, tax rates, interestrates, home values, consumer net worth and the availabilityof
credit; changes in laws or regulations affecting our business includingbut not limited to tariffs; uncertainties regardingthe
impact of any governmental action regarding, or responsesto, the foregoing conditions; competitive factors and pricing
pressures; our ability to predict and respond to rapidlychanging fashion trends and consumer demands; our abilityto
successfully implement our new store development strategyto increase new store openings and the ability ofany 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 affectour sales or operations; inventory risks due to shiftsin market
demand, including the ability to liquidate excess inventoryat anticipated margins; and other factors discussed under"Risk
Factors" in Part I, Item 1Aof the Company's most recently filed annual reporton Form 10-K and in other reports the
Company files with or furnishes to the SEC from time totime.The Company does not undertake to publicly update or
revise the forward-looking statements even if experienceor future changes make it clear that the projected results
expressed or implied therein will not be realized. TheCompany is not responsible for any changes made tothis press
release by wire or Internet services
.
* * *
THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTSOF INCOME (UNAUDITED)
FOR THE PERIODS ENDED APRIL 30, 2022 AND MAY 1, 2021
(Dollars in thousands, except per share data)
Q
u
a
r
t
e
r
E
n
d
e
d
April 30,
%
May 1,
%
2
0
2
2
Sales
2
0
2
1
Sales
REVENUES
Retail sales
$
204,933
100.0%
$
211,234
100.0%
Other revenue (principally
finance,
late fees and layaway
charges)
1,788
0.9%
1,851
0.9%
Total revenues
206,721
100.9%
213,085
100.9%
GROSS MARGIN (Memo)
72,690
35.5%
87,559
41.5%
COSTS AND EXPENSES,
NET
Cost of goods sold
132,243
64.5%
123,675
58.5%
Selling, general and
administrative
60,441
29.5%
63,237
29.9%
Depreciation
2,743
1.3%
3,042
1.4%
Interest and other income
(403)
-0.2%
(663)
-0.3%
Cost and expenses, net
195,024
95.2%
189,291
89.6%
Income (Loss) Before Income
Taxes
11,697
5.7%
23,794
11.3%
Income Tax Expense (Benefit)
1,949
1.0%
3,081
1.5%
Net Income (Loss)
$
9,748
4.8%
$
20,713
9.8%
Basic Earnings Per Share
$
0.46
$
0.92
Basic Weighted Average
Shares
21,345,489
22,512,566
Diluted Earnings Per Share
$
0.46
$
0.92
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Ap
ril
30,
January
29,
202
2
2022
(Un
aud
ited
)
(Unaudite
d)
ASSETS
Current Assets
Cash and cash equivalents
$
25,881
$
19,759
Short-term investments
120,021
145,998
Restricted cash
3,920
3,919
Accounts receivable - net
60,121
55,812
Merchandise inventories
127,576
124,907
Other current assets
6,029
5,273
Total Current Assets
343,548
355,668
Property and Equipment - net
67,079
63,083
Noncurrent Deferred Income
Taxes
9,674
9,313
Other Assets
23,192
24,437
Right-of-Use Assets, net
168,537
181,265
TOTAL
$
612,030
$
633,766
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current Liabilities
$
172,569
$
177,327
Current Lease Liability
63,175
66,808
Noncurrent Liabilities
17,797
17,914
Lease Liability
107,837
117,521
Stockholders' Equity
250,652
254,196
TOTAL
$
612,030
$
633,766