Despite posting a 43.8 percent leap in first-quarter profits, women’s apparel retailer Cato Corp. said Thursday that, based on economic volatility, it is remaining “conservative” going forward.
Robust Easter sales and favorable weather helped the Charlotte, N.C.-based company generate net income of $27.1 million, or 92 cents a diluted share, for the period ended May 1. This compared with income of $18.8 million, or 64 cents a share, in the year-ago quarter. Analysts expected EPS of 90 cents.
Revenues rose 9 percent, to $262.7 million from $241 million in 2009, and were up 8 percent on a same-store basis.
Fewer markdowns helped gross margin for the period improve to 43 percent of sales versus 40 percent a year earlier. Selling, general and administrative costs were reduced $3.9 million to $68.6 million.
“A significant amount of uncertainty remains in the economic outlook in many of our markets and for many of our customers,” said president, chairman and chief executive officer John Cato.
Based on such ambiguity, the company said it would maintain its second-quarter earnings guidance of 43 cents to 46 cents a share with same-store sales in the range of down 3 percent to flat. Full-year EPS is expected to be between $1.72 and $1.81 a share. Analysts forecasted second-quarter earnings of 57 cents a share and annual EPS of $1.82.