Cato Q3 net income up 5 percent

REPORT_ Cato net income for the third quarter increased 5 percent. Earnings per diluted

share increased 5 percent. Sales showed a 1 percent increase. Same-store sales decreased 1 percent. The gross margin rate increased to 35.2 percent of sales from 34 percent last year. The SG&A rate for the quarter increased to 30.7 percent from 29.5 percent last year. The company’s effective tax rate for the third quarter was 4.7 percent versus 31.6 percent last year. Year-to-date, the gross margin rate decreased to 38.1 percent of sales from 38.6 percent the prior year.

For the nine month period net income fell 6 percent. Earnings per diluted share fell 6 percent. Sales for the nine months fell 1 percent. Year-to-date same-store sales decreased 3 percent. The company expects fourth quarter sales results to be in line with the year-to-date trend with same-store sales in the range of down 3 percent to flat. Based on that range, it expects fourth quarter earnings per diluted share to decrease by 37 percent to 15 percent. For the year, earnings per diluted share are estimated to show a decrease of 10 percent to 7 percent.

Cato is based in North Carolina. It offers value-priced fashion apparel and accessories under Cato, Versona and It's Fashion. Cato offers exclusive merchandise. Versona offers jewelry, handbags and shoes. It’s Fashion offers the latest trendy styles. “Our third quarter results were above expectations and were primarily the result of a stronger than estimated October,” stated John Cato, Chairman, President, and Chief Executive Officer.