Cato sales increase 6 percent in Q2

REPORT_ The Cato Corporation reported net income of 15.7 million dollars or 0.56 dollars per diluted share for the

second quarter ended August 2, 2014, compared to net income of 14.8 million dollars or 0.51 dollars per diluted share for the second quarter ended August 3, 2013. Net income increased 6 percent and earnings per diluted share increased 10 percent from the prior year. Earnings per share benefited 0.03 dollars in the second quarter due to share repurchases. Sales for the second quarter ended August 2, 2014 were 243.8 million dollars, up 6 percent from sales of 229.4 million dollars last year. Second quarter same-store sales increased 3 percent.

For the six months ended August 2, 2014, the company earned net income of 45.7 million dollars or 1.61 dollars per diluted share, compared with net income of 45.6 million dollars or 1.56 dollars per diluted share for the six months ended August 3, 2013. Net income was flat and earnings per diluted share increased 3 percent. Sales for the first half were 526.2 million dollars, up 6 percent to the prior year's first half sales of 496.6 million dollars. Same-store sales for the first half were up 3 percent from the prior year.

“Second quarter same-store sales were in line with our year-to-date trend,” said John Cato, Chairman, President, and Chief Executive Officer, “However, we continue to expect the second half earnings per diluted share will be within our original guidance range, updated for share repurchases, of 0.21 dollars to 0.30 dollars.”

Company’s guidance of earnings per diluted share for the second half is unchanged, but is updated for share repurchases, at 0.21 dollars to 0.30 dollars. By quarter, earnings per share are estimated to be in the range of 0.08 dollars to 0.13 dollars versus 0.17 dollars last year for the third quarter and 0.13 dollars to 0.17 dollars versus 0.13 dollars last year for the fourth quarter. Comparable store sales for both the third and fourth quarters are estimated to be in the range of down 2 percent to flat. Based on year-to-date results and this guidance for the second half, earnings per diluted share are expected to be within the adjusted range of 1.82 dollars to 1.91 dollars versus 1.86 dollars last year, a decrease of 2 percent to an increase of 3 percent.

During the first half, the company opened 11 new stores, relocated one store and closed three stores. The Company now expects to open 46 stores, down from the original plan of 65. As of August 2, 2014, The Cato Corporation operated 1,328 stores in 32 states, compared to 1,306 stores in 31 states as of August 3, 2013.