Home / Knowledge / News / Apparel/Garments / Clothing retailer Cato reports Q1 EPS up 12%
Clothing retailer Cato reports Q1 EPS up 12%
22
May '09
The Cato Corporation reported net income of $18.8 million or $.64 per diluted share for the first quarter ended May 2, 2009, compared to net income of $16.9 million or $.57 per diluted share for the first quarter ended May 3, 2008.

Net income increased 11% and earnings per diluted share increased 12%. Sales for the first quarter were $238.1 million, a 5% increase over sales of $225.8 million for the first quarter ended May 3, 2008. The Company's comparable store sales increased 3% in the first quarter.

"Sales and markdowns for the first quarter were better than expected and resulted in higher merchandise margin," said John Cato, Chairman, President, and Chief Executive Officer. "We continue to believe our customer's discretionary spending ability is limited and expect comparable store sales to be in the range of down 3% to flat for the second quarter and for the balance of the year.

We estimate second quarter earnings per diluted share to be in the range of $.48 to $.54 versus $.41 last year. After adjusting our original 2009 guidance for first quarter actual results, our estimate of earnings per diluted share for the full year is now a range of $1.13 to $1.27 versus $1.14 last year."

SG&A expenses for the quarter increased 230 basis points primarily as a result of higher accrued incentive compensation. The Company's cash and short-term investments increased by $21.9 million during the quarter to $166.7 million.

All 2008 quarterly and annual result references reflect the restatement of earnings per diluted share under EITF 03-6-1.

During the first quarter, the Company opened eight stores and closed four stores. Two of the closings were conversions to the It's Fashion Metro concept. As of May 2, 2009, the Company operated 1,285 stores in 31 states, compared to 1,326 stores in 32 states as of May 3, 2008.

Cato Corporation

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