Cato Reports 3Q Net Loss
CHARLOTTE, N.C., Nov. 19, 2020 /PRNewswire/ -- The Cato Corporation (NYSE: CATO) today reported a net loss of
As previously announced, Cato closed all stores due to the COVID-19 pandemic beginning March 19, 2020. On May 1, 2020, the Company began reopening stores in a phased approach, with limited operating hours, consistent with local health and safety guidelines and regulations. As of June 15, 2020, all stores had reopened.
For the nine months ended October 31, 2020, the Company reported a net loss of
"Sales in the third quarter reflected continued softening of customer demand as COVID-19 cases continued to rise throughout our market areas and many people still have not returned to work. As we see this trend continuing, we anticipate that the remainder of the year will be challenging," stated John Cato, Chairman, President, and Chief Executive Officer. "We appreciate our store associates' diligence in providing a safe shopping environment and our customers' patience as we continue our enhanced cleaning and product handling procedures to make our stores as safe as possible in light of the COVID-19 pandemic."
For the quarter, gross margin decreased to
Year-to-date gross margin decreased to
During the third quarter ended October 31, 2020, the Company opened 16 new stores, which had leases prior to the COVID-19 pandemic and permanently closed 2 stores. As of October 31, 2020, the Company operated 1,347 stores in 33 states, compared to 1,298 stores in 31 states as of August 3, 2019.
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. The Company also offers exclusive merchandise found in its Cato stores at www.catofashions.com. Versona is a unique fashion destination offering apparel and accessories including jewelry, handbags and shoes at exceptional prices every day. Select Versona merchandise can also be found at www.shopversona.com. It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day.
Statements in this press release not historical in nature including, without limitation, statements regarding the Company's expected or estimated operational and financial results and potential impact of the coronavirus are considered "forward-looking" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but are not limited to, any actual or perceived deterioration in the conditions that drive consumer confidence and spending, including, but not limited to, prevailing social, economic, political and public health conditions and uncertainties, levels of unemployment, fuel, energy and food costs, wage rates, tax rates, interest rates, home values, consumer net worth and the availability of credit; changes in laws or regulations affecting our business including tariffs; uncertainties regarding the impact of any governmental responses to the foregoing conditions; competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and consumer demands; our ability to successfully open new stores as planned and our ability of any such new stores to grow and perform as expected; adverse weather, public health threats (including the global coronavirus (COVID-19) outbreak) or similar conditions that may affect our sales or operations; inventory risks due to shifts in market demand, including the ability to liquidate excess inventory at anticipated margins; and other factors discussed under "Risk Factors" in Part I, Item 1A of the Company's most recently filed annual report on Form 10-K and in other reports the Company files with or furnishes to the SEC from time to time. The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press release by wire or Internet services.
THE CATO CORPORATION | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||
FOR THE PERIODS ENDED OCTOBER 31, 2020 AND NOVEMBER 2, 2019 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||
October 31, | % | November 2, | % | October 31, | % | November 2, | % | ||||||||
2020 | Sales | 2019 | Sales | 2020 | Sales | 2019 | Sales | ||||||||
REVENUES | |||||||||||||||
Retail sales | $ | 149,205 | $ | 189,357 | $ | 414,283 | $ | 627,780 | |||||||
Other revenue (principally finance, | |||||||||||||||
late fees and layaway charges) | 1,586 | 2,166 | 5,410 | 6,676 | |||||||||||
Total revenues | 150,791 | 191,523 | 419,693 | 634,456 | |||||||||||
GROSS MARGIN (Memo) | 39,801 | 70,733 | 88,545 | 242,701 | |||||||||||
COSTS AND EXPENSES, NET | |||||||||||||||
Cost of goods sold | 109,404 | 118,624 | 325,738 | 385,079 | |||||||||||
Selling, general and administrative | 51,885 | 64,681 | 148,353 | 196,737 | |||||||||||
Depreciation | 3,619 | 3,844 | 11,113 | 11,523 | |||||||||||
Interest and other income | (791) | - | (1,662) | - | (3,603) | - | (4,491) | - | |||||||
Cost and expenses, net | 164,117 | 185,487 | 481,601 | 588,848 | |||||||||||
Income (Loss) Before Income Taxes | (13,326) | - | 6,036 | (61,908) | - | 45,608 | |||||||||
Income Tax (Benefit) Expense | (9,704) | - | 51 | (22,698) | - | 6,501 | |||||||||
Net Income (Loss) | $ | (3,622) | - | $ | 5,985 | $ | (39,210) | - | $ | 39,107 | |||||
Basic Earnings Per Share | $ | (0.15) | $ | 0.24 | $ | (1.64) | $ | 1.59 | |||||||
Diluted Earnings Per Share | $ | (0.15) | $ | 0.24 | $ | (1.64) | $ | 1.59 |
THE CATO CORPORATION | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(Dollars in thousands) | ||||||
October 31, | February 1, | |||||
2020 | 2020 | |||||
(Unaudited) | (Unaudited) | |||||
ASSETS | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ | 18,812 | $ | 11,824 | ||
Short-term investments | 132,574 | 200,387 | ||||
Restricted cash | 3,917 | 3,896 | ||||
Accounts receivable - net | 47,725 | 26,088 | ||||
Merchandise inventories | 84,281 | 115,365 | ||||
Other current assets | 7,185 | 5,237 | ||||
Total Current Assets | 294,494 | 362,797 | ||||
Property and Equipment - net | 81,853 | 88,667 | ||||
Noncurrent Deferred Income Taxes | 7,464 | 8,636 | ||||
Other Assets | 22,722 | 24,073 | ||||
Right-of-Use Assets, net | 184,338 | 200,803 | ||||
TOTAL | $ | 590,871 | $ | 684,976 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current Liabilities | $ | 122,489 | $ | 136,153 | ||
Current Lease Liability | 54,250 | 63,149 | ||||
Noncurrent Liabilities | 19,799 | 21,976 | ||||
Lease Liability | 138,196 | 147,184 | ||||
Stockholders' Equity | 256,137 | 316,514 | ||||
TOTAL | $ | 590,871 | $ | 684,976 |
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SOURCE The Cato Corporation