CATO NET UP 10% IN QUARTER
NEW YORK — Profits at Cato Corp. gained 10 percent to $3.1 million, or 11 cents a share, in the first quarter ended Feb. 3. In the same period last year, profits were $2.8 million, or 10 cents.
Sales were up 5.4 percent to $141.6 million from $134.3 million. Same-store sales were up 3 percent.
In the year, profits sank 33.6 percent to $12 million, or 42 cents a share, from $18.1 million, or 62 cents, a year ago.
Sales inched up 2.9 percent to $490 million from $476.2 million, but same-store sales declined 5 percent.
Throughout the year, the Charlotte, N.C.-based specialty retailer struggled with high inventory levels and lower-than-expected sales resulting in heavy markdowns and “erosion of merchandise margins,” Waylan H. Cato Jr., chairman and chief executive officer, said in a statement. “The extremely competitive and promotional environment prevailing throughout all women’s apparel channels produced a severe price compression.”
He noted that there was a 5 percent decrease in the average unit selling price during the year.
The company finished the year with $47.9 million in cash and short-term investments, and its net worth increased to $149.7 million, said Cato. He also noted that the firm’s revolving credit loan was extended to May 31, 1999.
During 1995, the company opened 37 new stores and closed 12, ending the year with 671 stores in 22 states. The company also relocated 18 stores and expanded 11.
— Fairchild News Service