American specialty retailer Cato swings back to profit in Q3 FY21

22 Nov '21

2 min read

Pic: Cato Fashions

The Cato Corporation, a US-based retailer of women's fashion and accessories, has reported a 14 per cent sales jump to $170.5 million in the third quarter (Q3) of FY21 ended on October 31, 2021, compared to the sales of $149.2 million in the corresponding quarter of last year. Net income for the three-month period rose to $8.6 million (Q3 FY20: loss $3.6 million).

“We continue to face challenges due to the lingering effects of the pandemic on the retail industry and the economy as a whole,” John Cato, chairman, president and chief executive officer at Cato Corporation, said in a press release. “Our sales for the third quarter were negatively impacted by lower inventory levels related to further deterioration in the supply chain coupled with increased positive cases related to the COVID-19 Delta variant.”

The American fashion retailer’s gross margin during Q3 surged to $66.3 million ($39.8 million), while cost and expenses totalled to $169.3 million ($164.1 million).

“While our first half sales benefitted from pent-up demand, government stimulus and more reasonable inventory levels, third quarter sales softened due to decreasing inventory levels caused by worsening supply chain disruption,” Cato continued. “As we see these conditions persisting, coupled with the effects of rising inflation and potential government vaccine mandates, we believe the fourth quarter will be very challenging.”

“As we enter the holidays, amid the lingering effects of the pandemic, our associates' and customers' safety remain our primary focus,” Cato concluded. “We strive to offer our customers a safe place to shop for their favourite fashion trends at a great value with outstanding customer service.”

Fibre2Fashion News Desk (JL)

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