Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - CATO CORP | exhibit992.htm |
| 8-K - FORM 8-K - CATO CORP | cato8k1qtr2021.htm |
8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510
EXHIBIT 99.1
The CATO Corporation
NEWS RELEASE
FOR IMMEDIATE RELEASE
For Further Information Contact:
CATO REPORTS 1Q NET INCOME
CHARLOTTE, N.C. (May 20, 2021)
income of $20.7 million or $0.92 per diluted share for the first quarter ended May 1, 2021, compared
to a net loss of $28.4 million or ($1.19) per diluted share for the first quarter ended May 2, 2020.
Sales for fiscal 2020 were significantly impacted by the closure of our stores for six weeks due to the
COVID-19 pandemic, beginning March 19, 2020. Due to the impact of the unprecedented closures,
the Company will report sales compared to each of the past two years. Sales for the first quarter
were $211.2 million, or an increase of 114% from sales of $98.8 million for the first quarter ended
May 2, 2020. Compared to the same period in 2019, sales decreased 7% from sales of $228.3
million for the quarter ended May 4, 2019. The Company’s same-store sales for the quarter increased
111% compared to 2020 and decreased 8% when compared to the same period in 2019.
“We remain cautiously optimistic about the remainder of the year as we see customer traffic improve,
states continue to lift capacity limits as more people are vaccinated, the comfort level with venturing
out to social events increases and people prepare to return to work,” stated John Cato, Chairman,
President, and Chief Executive Officer. “We do anticipate the beneficial effects of stimulus funds on
the economy to taper off in the near future and retail to continue to be negatively impacted by global
supply chain challenges.”
Gross margin increased from 15.4% to 41.5% of sales in the quarter due to higher merchandise
margins. SG&A expenses as a percent of sales decreased from 53.1% to 29.9% of sales during the
quarter primarily due to leveraging of expenses as a result of normalized sales and a $5.3 million
non-cash impairment charge in the prior year, partially offset by higher incentive compensation. Tax
impact for the quarter was a $3.1 million expense versus a $9.1 million benefit in the prior year due to
the pre-tax loss. The Company ended the quarter with unrestricted cash and short-term investments
of $183.2 million, with no borrowings outstanding on its revolving line of credit compared to $117.8
million for the same period in 2020, net of $30 million drawn on its line of credit.
8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510
During the first quarter ended May 1, 2021, the Company permanently closed 5 stores. As of May
1, 2021, the Company has 1,325 stores in 32 states, compared to 1,300 stores in 31 states as of May
2, 2020.
to weather a year like 2020,” Mr. Cato said. “And the hard work and dedication of our associates and
the loyalty of our customers is allowing us to regain ground lost during 2020. Our priority, in addition
to providing a safe shopping environment, is to provide fashion and outstanding customer service at a
great value to our customers.”
“As the effects of the pandemic remain ongoing, there still remains a high level of uncertainty as to
their continued impact on the retail industry as a whole. The lingering effects of the prolonged supply
chain disruption are also a concern,” shared Mr. Cato. “In light of these uncertainties, we remain
cautiously optimistic about the remainder of the year. However, should our strong start continue
through the first half, we expect to revisit store development opportunities and other projects
suspended due to COVID.”
The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories
operating three concepts, “Cato,” “Versona” and “It’s Fashion.” The Company’s Cato stores offer
exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices
every day. The Company also offers exclusive merch andise found in its Cato stores at
www.catofashions.com. Versona is a unique fashion destination offering apparel and accessories
including jewelry, handbags and shoes at exceptional prices every day. Select Versona merchandise
can also be found at www.s hopversona.com. It’s Fashion offers fashion with a focus on the latest
trendy styles for the entire family at low prices every day.
Statements in this press release that express a belief, expectation or intention, as well as those that are not a historical
fact, including, without limitation, statements regarding the Company’s expected or estimated operational financial results,
activities or opportunities, and potential impacts and effects of the coronavirus are considered “forward-looking” within the
meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current
expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results
to differ materially from those contemplated by the forward -looking statements. Such factors include, but are not limited
to, any actual or perceived deterioration in the conditions that drive consumer confidence and spending, including, but not
limited to, prevailing social, economic, political and public health conditions and uncertainties, levels of unemployment,
fuel, energy and food costs, wage rates, tax rates, interest rates, home values, consumer net worth and the availability of
credit; changes in laws or regulations affecting our business including but not limited to tariffs; uncertainties regarding the
impact of any governmental action regarding, or responses to, to the foregoing conditions; competitive factors and pricing
pressures; our ability to predict and respond to rapidly changing fashion trends and consumer demands; our ability to
8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510
successfully implement our new store development strategy to increase new store openings and the ability of any such
new stores to grow and perform as expected; adverse weather, public health threats (including the global coronavirus
(COVID-19) outbreak) or similar conditions that may affect our sales or operations; inventory risks due to shifts in market
demand, including the ability to liquidate excess inventory at anticipated margins; and other factors discussed under “Risk
Factors” in Part I, Item 1A of the Company’s most recently filed annual report on Form 10-K and in other reports the
Company files with or furnishes to the SEC from time to time. The Company does not undertake to publicly update or
revise the forward-looking statements even if experience or future changes make it clear that the projected results
expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press
release by wire or Internet services.
# # #
8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510
THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED MAY 1, 2021 AND MAY 2, 2020
(Dollars in thousands, except per share data)
Quarter Ended
May 1,
%
May 2,
%
2021
Sales
2020
Sales
REVENUES
$
211,234
100.0%
$
98,813
100.0%
1,851
0.9%
1,919
1.9%
213,085
100.9%
100,732
101.9%
GROSS MARGIN (Memo)
87,559
41.5%
15,216
15.4%
COSTS AND EXPENSES, NET
123,675
58.5%
83,597
84.6%
63,237
29.9%
52,511
53.1%
3,042
1.4%
4,006
4.1%
(663)
-0.3%
(1,851)
-1.9%
189,291
89.6%
138,263
139.9%
Income (Loss) Before Income Taxes
23,794
11.3%
(37,531)
-38.0%
Income Tax (Benefit)/Expense
3,081
1.5%
(9,114)
-9.2%
Net Income (Loss)
$
20,713
9.8%
$
(28,417)
-28.8%
Basic Earnings Per Share
$
0.92
$
(1.19)
Diluted Earnings Per Share
$
0.92
$
(1.19)
8100 Denmark Road
P.O. Box 34216
Charlotte, NC 28234
(704) 554-8510
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
May 1,
January 30,
2021
2021
(Unaudited)
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
22,276
$
17,510
Short-term investments
160,897
126,416
Restricted cash
3,918
3,918
Accounts receivable - net
55,140
52,743
Merchandise inventories
84,849
84,123
Other current assets
5,978
5,840
Total Current Assets
333,058
290,550
Property and Equipment – net
69,925
72,550
Noncurrent Deferred Income Taxes
5,726
5,685
Other Assets
23,350
22,850
Right-of-Use Assets, net
185,861
199,817
$
617,920
$
591,452
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
$
144,172
$
118,513
Current Lease Liability
58,385
63,421
Noncurrent Liabilities
20,327
19,705
Lease Liability
133,153
143,315
Stockholders' Equity
261,883
246,498
$
617,920
$
591,452