Cato reports Q1 loss, sales decline by 57 percent
By Prachi Singh
May 21, 2020
The Cato Corporation has reported net loss of 28.4 million dollars or 1.19 dollars per diluted share for the first quarter compared to net income of 21.3 million dollars or 87 cents per diluted share for the same quarter ended May 4, 2019. The company said in a statement that sales for the quarter were 98.8 million dollars or a decrease of 57 percent, while same-store sales for the quarter decreased 56 percent to last year.
“Cato closed its stores on March 19, along with most non-essential retailers. We were able to reopen approximately 700 of our 1,300 stores May 1 and hope to have the rest reopened by early June,” stated John Cato, the company’s Chairman, President, and Chief Executive Officer, adding, “As noted in recent business updates in regards to the coronavirus pandemic, Cato has had to make difficult decisions in an effort to sustain our business and safeguard the long-term health of our company by cutting costs across the organization, preserving cash by reducing capital expenditures, delaying or cancelling non-leased, planned new store development and suspending the quarterly dividend.”
The company’s gross margin decreased 24.9 percent to 15.4 percent of sales in the quarter. The company ended the quarter with unrestricted cash and short-term investments of 147.8 million dollars, including 30 million dollars drawn on its revolving line of credit.
During the first quarter ended May 2, 2020, Cato opened 24 new stores and permanently closed 5 stores and has 1,300 stores in 31 states at the end of the quarter, compared to 1,302 stores in 31 states as of May 4, 2019.