CATO TO SELL OFF SHARES
NEW YORK — The Cato Corp. said Wednesday an investment firm run by founder and chairman Wayland H. Cato Jr. would sell up to 1.5 million shares of the company’s stock over the next two years.
At Wednesday’s close, shares of Cato rose 15 cents to close at $18 in Nasdaq trading. At that price, proceeds from sales of stock would be about $27 million.
The Charlotte, N.C.-based women’s apparel discount chain, which operates under the nameplates Cato and It’s Fashion, said The Cato Family Investments would sell shares representing roughly 26 percent of the total Cato company shares. Excluding these shares, the investment fund owns 44 percent of the voting power of the company’s stock.
“Cato stock represents a significant portion of Cato Family Investments’ capital and this plan provides a prudent financial option for estate planning purposes,” said Cato in a statement.
For the just-completed third quarter, Cato recorded a 13.6 percent profit increase to a record $5 million, or 20 cents a share, versus last year’s profits of $4.4 million, or 18 cents. Sales for the Nov. 3 ending quarter rose 7.8 percent to $147.6 million from $136.9 million last year and 3 percent on a comparable basis. The company said it continues to expect a 27.9 percent gain in fourth-quarter income to $11 million, or 42 cents a share, compared with the $8.6 million, or 34 cents, reached last year.