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Comparable store sales flat at Cato Corporation
21 Aug '08
3 min read
The Cato Corporation reported net income of $12.1 million or $.41 per diluted share for the second quarter ended August 2, 2008, compared to net income of $12.5 million or $.39 per diluted share for the second quarter ended August 4, 2007. Net income decreased 3% and earnings per diluted share increased 5% over last year. Sales for the second quarter were $231.0 million, a 5% increase over sales of $219.0 million last year. Second quarter comparable store sales increased 2%.
For the six months ended August 2, 2008, the Company earned net income of $28.9 million or $.99 per diluted share, compared with net income of $31.2 million or $.97 per diluted share for the six months ended August 4, 2007, a 7% decrease in net income and a 2% increase in earnings per diluted share. Sales for the first half were $456.7 million, an increase of 3% over the prior year's first half sales of $443.1 million. Comparable store sales for the first half were flat compared to first half 2007.
"Second quarter results benefited from tight inventory management, better sell-throughs of regular priced merchandise and the impact on overall sales from stimulus checks," said John Cato, Chairman, President, and Chief Executive Officer. "We expect the remainder of the year to be difficult as our customer continues to face difficult economic conditions. We remain comfortable with our original guidance for the second half of the year with earnings per diluted share in a range of ($.06) to $.04 versus $.03 last year."
Second quarter gross margin was 35.9% compared to 32.6% last year due primarily to better merchandise margins. Second quarter SG&A costs as a percent of sales increased to 27.5% from 23.9% last year. The increase in SG&A for the quarter was primarily a result of the costs associated with closing 47 underperforming stores, higher than expected medical costs and an increase in accrued incentive compensation.
Based on year-to-date results and our original guidance for the second half, we estimate earnings per diluted share for the year to be in the range of $.93 to $1.03 versus $1.03 last year, a decrease of 10% to flat. By quarter, earnings per diluted share are estimated to be in the range of ($.05) to $.00 versus $.09 last year for the third quarter and ($.01) to $.04 versus ($.06) last year for the fourth quarter. Comparable store sales for both the third and fourth quarters are estimated to be in the range of down 3% to flat.
During the first half, the Company opened 32 new stores and closed 63 stores. The Company continues to expect to open approximately 70 stores during 2008. As of August 2, 2008, The Cato Corporation operated 1,287 stores in 31 states, compared to 1,306 stores in 31 states as of August 4, 2007.
For the six months ended August 2, 2008, the Company earned net income of $28.9 million or $.99 per diluted share, compared with net income of $31.2 million or $.97 per diluted share for the six months ended August 4, 2007, a 7% decrease in net income and a 2% increase in earnings per diluted share. Sales for the first half were $456.7 million, an increase of 3% over the prior year's first half sales of $443.1 million. Comparable store sales for the first half were flat compared to first half 2007.
"Second quarter results benefited from tight inventory management, better sell-throughs of regular priced merchandise and the impact on overall sales from stimulus checks," said John Cato, Chairman, President, and Chief Executive Officer. "We expect the remainder of the year to be difficult as our customer continues to face difficult economic conditions. We remain comfortable with our original guidance for the second half of the year with earnings per diluted share in a range of ($.06) to $.04 versus $.03 last year."
Second quarter gross margin was 35.9% compared to 32.6% last year due primarily to better merchandise margins. Second quarter SG&A costs as a percent of sales increased to 27.5% from 23.9% last year. The increase in SG&A for the quarter was primarily a result of the costs associated with closing 47 underperforming stores, higher than expected medical costs and an increase in accrued incentive compensation.
Based on year-to-date results and our original guidance for the second half, we estimate earnings per diluted share for the year to be in the range of $.93 to $1.03 versus $1.03 last year, a decrease of 10% to flat. By quarter, earnings per diluted share are estimated to be in the range of ($.05) to $.00 versus $.09 last year for the third quarter and ($.01) to $.04 versus ($.06) last year for the fourth quarter. Comparable store sales for both the third and fourth quarters are estimated to be in the range of down 3% to flat.
During the first half, the Company opened 32 new stores and closed 63 stores. The Company continues to expect to open approximately 70 stores during 2008. As of August 2, 2008, The Cato Corporation operated 1,287 stores in 31 states, compared to 1,306 stores in 31 states as of August 4, 2007.
Cato Corporation
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