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Cato revises Q1 fiscal 2007 guidance
25 May '07
2 min read
The Cato Corporation reported net income of $18.7 million or $.59 per diluted share for the first quarter ended May 5, 2007, compared to net income of $20.8 million or $.65 per diluted share for the first quarter ended April 29, 2006. Net income decreased 10% and earnings per diluted share decreased 9% from the prior year (the difference in percentage change is due to rounding).
Sales for the first quarter were $224.1 million, a 2% decrease from sales of $229.7 million for the first quarter last year. The Company's first quarter comparable store sales decreased 5%.
"Lower sell-throughs of regular priced goods had a negative impact on sales and gross margin in the first quarter," said John Cato, Chairman, President, and Chief Executive Officer. "As a result of higher than planned inventories at the end of the first quarter, we expect higher markdowns in the second quarter."
"Also, after two quarters of continuing weakness in our sales and the softness in the women's specialty apparel segment, we are forecasting that trend to continue and now estimate 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 now expect second quarter earnings per diluted share to be in the range of $.27 to $.31 versus $.38 last year. For the year, we are estimating earnings per diluted share to be in the range of $1.11 to $1.31 versus $1.62 last year."
During the first quarter, the Company opened10 stores and relocated six stores. The Company now expects to open an additional 70 new stores and close 10 for the balance of the year. As of May 5, 2007, the Company operated 1,286 stores in 31 states, compared to 1,252 stores in 31 states as of April 29, 2006.
Sales for the first quarter were $224.1 million, a 2% decrease from sales of $229.7 million for the first quarter last year. The Company's first quarter comparable store sales decreased 5%.
"Lower sell-throughs of regular priced goods had a negative impact on sales and gross margin in the first quarter," said John Cato, Chairman, President, and Chief Executive Officer. "As a result of higher than planned inventories at the end of the first quarter, we expect higher markdowns in the second quarter."
"Also, after two quarters of continuing weakness in our sales and the softness in the women's specialty apparel segment, we are forecasting that trend to continue and now estimate 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 now expect second quarter earnings per diluted share to be in the range of $.27 to $.31 versus $.38 last year. For the year, we are estimating earnings per diluted share to be in the range of $1.11 to $1.31 versus $1.62 last year."
During the first quarter, the Company opened10 stores and relocated six stores. The Company now expects to open an additional 70 new stores and close 10 for the balance of the year. As of May 5, 2007, the Company operated 1,286 stores in 31 states, compared to 1,252 stores in 31 states as of April 29, 2006.
The Cato Corporation
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