Home / Knowledge / News / Apparel/Garments / Rising raw material may hurt Cato's Q2 performance
Rising raw material may hurt Cato's Q2 performance
23
Aug '11
The Cato Corporation reported net income of $18.1 million or $.61 per diluted share for the second quarter ended July 30, 2011, compared to net income of $17.0 million or $.58 per diluted share, as restated, for the second quarter ended July 31, 2010. Both net income and earnings per diluted share increased 6% over last year. Sales for the second quarter were $234.1 million, a 1% increase over sales of $231.8 million last year. Second quarter same-store sales decreased 1%.

For the six months ended July 30, 2011, the Company earned net income of $48.6 million or $1.65 per diluted share, compared with net income of $42.0 million or $1.42 per diluted share, as restated, for the six months ended July 31, 2010, an increase of 16% in both net income and earnings per diluted share. Sales for the first half were $505.0 million, a 3% increase over the prior year's first half sales of $490.9 million. Same-store sales for the first half were flat to the prior year.

"Same-store sales for the second quarter were within our estimated range and we were able to control expenses well," stated John Cato, Chairman, President, and Chief Executive Officer. "As we noted in our July sales release, our same-store sales trend reflects the difficult economic conditions and uncertainty affecting our customers, especially the lower income customer. Also, we continue to expect rising raw material costs will have a negative effect on second half performance. As a result, we now expect earnings per diluted share for second half of the year will be at the low end of our original guidance range of $.50 to $.56."

Second quarter gross margin was 38.0% compared to 39.0% last year due primarily to higher markdowns. Second quarter SG&A costs as a percent of sales decreased to 25.2% from 26.9% last year primarily as a result of lower accrued incentive compensation and insurance costs. The effective tax rate for the quarter was 36.0% compared to 36.3% last year.

As noted above, based on year-to-date results and the Company's original guidance for the second half, earnings per diluted share are expected to be at the low end of the adjusted range of $2.15 to $2.21 versus $2.00 last year, as restated, an increase of 8% to 11%. By quarter, earnings per diluted share are estimated to be in the range of $.18 to $.21 versus $.20 last year, as restated, for the third quarter and $.32 to $.35 versus $.37 last year, as restated, 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.

During the first half, the Company opened 12 new stores, relocated one store and closed nine stores. Five of the closings were It's Fashion stores closed to open as It's Fashion Metro stores in the same market. The Company now expects to open approximately 41 stores during 2011. As of July 30, 2011, The Cato Corporation operated 1,285 stores in 31 states, compared to 1,275 stores in 31 states as of July 31, 2010.

The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories operating two divisions, "Cato" and "It's Fashion". The Company's Cato division offers exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices every day.

The Cato Corporation


Must ReadView All

Global economic upswing became broader & stronger: IMF

Textiles | On 19th Apr 2018

Global economic upswing became broader & stronger: IMF

The global economic upswing that began around mid-2016 has become...

Courtesy: ITMA

Textiles | On 19th Apr 2018

ITMA 2019 expanding space due to overwhelming response

Due to overwhelming response, the exhibition space has been increased ...

BIDA’s Europe trip to showcase a different Bangladesh

Apparel/Garments | On 19th Apr 2018

BIDA’s Europe trip to showcase a different Bangladesh

The Bangladesh Investment Development Authority (BIDA) is taking a...

Interviews View All

Mukesh Agarwal & Rajesh Agarwal
Madhuram Fincap Pvt Ltd

Increasing prices and lack of demand main issues facing industry

Top executives
Textile & apparel bodies

The decision to reduce GST on MMF yarn to 12% is transformational

Headhonchos
Indian textile value chain

Adopt innovative techniques, go for automisation rather than being...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Harsh Shah

Fynd is the central online shopping destination for fashion, offering...

Riddhi Jain

Conceived in Europe and curated in New Delhi, NeceSera is a...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Anisha Chaudhari
Threads & Shirts

Threads & Shirts is a freshly-tailored concept providing men/women a...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


April 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.9%
No
12.6%
Skip
17.5%

Total Votes: 103

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.1%
No
29.1%
Skip
7.8%

Total Votes: 103

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.4%
No
8.7%
Skip
3.9%

Total Votes: 103

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
82.5%
No
7.8%
Skip
9.7%

Total Votes: 103


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search