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Cato expects to 11 to 13 percent decline in FY16 earnings

By Prachi Singh

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Business

The Cato Corporation reported net income of 8.3 million dollars for the third quarter ended October 29, 2016, which was flat compared to net income of 8.3 million dollars for the third quarter ended October 31, 2015. EPS was 0.30 dollar, which was flat compared to 0.30 dollar last year. Sales of 207 million dollars decreased 7 percent over 223.3 million dollars for the same quarter last year, while same-store sales decreased 8 percent.

“The liquidation of fall merchandise will put severe pressure on fourth quarter earnings. We now expect fourth quarter earnings will be a loss of 0.11 dollars per diluted share to a loss of 0.07 dollars versus earnings of 0.42 dollar per diluted share last year. For the year, earnings are now estimated to be in the range of 2.08 dollars per diluted share to 2.12 dollars per diluted share versus 2.39 dollars, a decrease of 13 percent to 11percent," said John Cato, Chairman, President, and Chief Executive Officer in a statement.

Cato reports 10 percent rise in nine months earnings

For the nine months, the company earned net income of 60 million dollars, compared to 55 million dollars for the nine months ended October 31, 2015, an increase of 9 percent. Earnings per diluted share were 2.17 dollars compared to 1.97 dollars last year, an increase of 10 percent. Sales decreased 3 percent to 729.2 million dollars and year-to-date same-store sales decreased 4 percent.

Year-to-date, the company opened three new stores, relocated four stores, and closed three stores. As of October 29, 2016, the it operated 1,372 stores in 33 states, compared to 1,370 stores in 32 states as of October 31, 2015.

"The retail environment continues to be soft, and markdown sales in the latter part of the quarter were significantly less than our earlier forecasts," stated Cato, adding, "Soft sales in the first half of the year continued and eroded further in the third quarter and we expect this trend to continue into the fourth quarter.”

Picture:Cato Fashions

Cato Corporation