• Home
  • News
  • Business
  • Cato expects to report sharp drop in FY17 earnings

Cato expects to report sharp drop in FY17 earnings

By Prachi Singh

loading...

Scroll down to read more

Business

The Cato Corporation reported net income of 2.7 million dollars for the third quarter ended October 28, 2017, compared to 8.3 million dollars for the same quarter ended October 29, 2016. Earnings per diluted share were 0.11 dollar compared to 0.30 dollar last year. Sales decreased 9 percent to 188.4 million dollars, while same-store sales also decreased 9 percent.

"Consistent with our previous releases, pressure on merchandise margins and profitability persist as we continue to work through our merchandise missteps," stated John Cato, Chairman, President, and Chief Executive Officer said in a media release, adding, "The negative sales trends are below our expectations and, consequently, we continue to expect our full year earnings to be significantly below last year."

Nine month net income drops to 24 mn dollars

For the nine months ended October 28, 2017, the company earned net income of 24 million dollars compared to 60 million dollars for the same period ended October 29, 2016. Earnings per diluted share were 0.93 dollar compared to 2.17 dollars last year. Sales declined 13 percent to 631 million dollars and year-to-date same-store sales decreased 14 percent.

For the third quarter, the company said, gross margin rate decreased to 33.9 percent of sales from 35.5 percent last year, due to lower merchandise margins and deleveraging of occupancy expenses. Year-to-date, the gross margin rate decreased to 34.8 percent of sales from 38.7 percent the prior year.

The company opened six new stores during 2017, down from its original plan of 13 stores and expects to close 26 stores versus the original plan of 19 stores. Additionally, two stores have been relocated. As of October 28, 2017, the company operated 1,370 stores in 33 states, compared to 1,372 stores in 33 states as of October 29, 2016.

Picture:Facebook/Cato Fashions

Cato Fashions