Earnings per diluted share for the third quarter were $0.17, compared to $0.16 last year, an increase of 5%. Sales for the third quarter ended November 2, 2013 were $198.8 million, a 1% increase over sales of $197.6 million for the third quarter ended October 27, 2012. Same-store sales for the quarter decreased 1%.
For the nine months ended November 2, 2013, the Company earned net income of $50.5 million, compared to net income of $53.7 million for the nine months ended October 27, 2012, a decrease of 6%.
Earnings per diluted share were $1.73 compared to $1.84 last year, a decrease of 6%. Sales for the nine months ended November 2, 2013 were $695.3 million, a decrease of 1% from sales of $701.8 million for the nine months ended October 27, 2012. Year-to-date same-store sales decreased 3%.
For the quarter, the gross margin rate increased to 35.2% of sales from 34.0% last year, primarily due to higher merchandise margin. The SG&A rate for the quarter increased to 30.7% from 29.5% last year due to store fixture write-offs and accrued incentive compensation offset by lower insurance expense.
The Company's effective tax rate for the third quarter was 24.7% vs. 31.6% last year. The tax rate for third quarter 2013 reflects the resolution of various audits during the quarter and the benefit of the Work Opportunity Tax Credit this year versus limited benefit in 2012 because the credit had not been renewed as of the end of the third quarter last year.
"Our third quarter results were above expectations and were primarily the result of a stronger than estimated October," stated John Cato, Chairman, President, and Chief Executive Officer. "We continue to expect that fourth quarter sales results will be in line with our year-to-date trend with same-store sales in the range of down 3% to flat.
"Based on that range, we expect fourth quarter earnings per diluted share will be within our original guidance range of $0.17 to $0.23 versus $0.27 last year, a decrease of 37% to 15%. For the year, earnings per diluted share are estimated to be in the range of $1.90 to $1.96 vs. $2.11 last year, a decrease of 10% to 7%."
The Company's fourth quarter includes 13 weeks compared to 14 weeks in 2012 and the fiscal year includes 52 weeks compared to 53 weeks in 2012.
Year-to-date, the Company has opened 16 new stores, relocated four stores, and closed eight stores. The Company now expects to open 33 stores during 2013. As of November 2, 2013, the Company operated 1,318 stores in 32 states, compared to 1,306 stores in 31 states as of October 27, 2012.
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. Versona is a unique fashion destination offering accessories and apparel including jewelry, handbags and shoes at exceptional prices every day. It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day.
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