Cato Q1 sales increase 6 percent

REPORT_ The Cato Corporation reported net income of 30 million dollars or 1.04 dollars per diluted share for the first quarter

ended May 3, 2014, compared to net income of 30.8 million dollars or 1.05 dollars per diluted share for the first quarter ended May 4, 2013. Net income decreased 3 percent and earnings per diluted share decreased 1 percent for the quarter.

The company repurchased 1.4 million shares during the quarter which increased the earnings per share by 0.02 dollars. Sales for the first quarter were 282.5 million dollars, a 6 percent increase from sales of 267.2 million dollars for the first quarter ended May 4, 2013. The company's same-store sales increased 3 percent in the quarter.

“Sales for the first quarter were above expectations,” stated John Cato, Chairman, President, and Chief Executive Officer, adding, “Our expectations for the second quarter remain unchanged from what was included in the original guidance for the full year and reflect same store sales in the range of down 2 percent to flat. However, due to the impact of share repurchases, the revised earnings per diluted share estimate for the second quarter is a range of 0.40 dollars to 0.45 dollars versus 0.51 dollars last year. After adjusting our original 2014 guidance for first quarter actual results and share repurchases, our estimated earnings per diluted share for the full year is now a range of 1.66 dollars to 1.79 dollars versus 1.86 dollars last year and versus original guidance of 1.47 dollars to 1.66 dollars.”

Gross margin increased 50 basis points to 41.8 percent of sales primarily due to higher merchandise contribution in the quarter. During the first quarter, the company headquartered in Charlotte, N.C. opened six stores and closed two stores. As of May 3, 2014, the company operated 1,324 stores in 32 states, compared to 1,307 stores in 31 states as of May 4, 2013.