Cato 2Q Profit Rises 38 Percent On Lower Costs
CHARLOTTE, N.C. (AP) ¿ Women's clothing retailer The Cato Corp. said Thursday its second-quarter profit rose 38 percent as the company cut expenses and more than offset a drop in sales.
But investors weren't pleased and Cato shares dropped $1.39, or 7.7 percent, to $16.67 in morning trading.
For the quarter ended Aug. 1, Cato earned $16.7 million, or 56 cents per share, up from $12.1 million, or 41 cents per share, in the year-ago period.
Sales fell 2.4 percent to $228.3 million from $233.9 million, as same-store sales ¿ or sales at stores open at least a year ¿ fell 3 percent.Gross margin rose to 36.3 percent from 35.9 percent last year due primarily to lower freight costs. Selling, general and administrative costs as a percent of sales fell to 25.1 percent from 27.5 percent last year. The company attributed the drop to costs related to closing stores in last year's quarter and lower health and worker's compensation costs this year. The company also projected a third-quarter loss of 3 cents to 7 cents per share and a fourth-quarter profit of 8 cents to 13 cents per share. For the year, earnings are pegged at $1.21 to $1.29 per share. Same-store sales for both quarters are expected to be in the range of flat to down 3 percent. At Aug. 1, Cato operated 1,285 stores in 31 states, and it expects to open 46 stores this year.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV