- Prachi Singh |
The Cato Corporation net income for the first quarter ended April 29 was 22.2 million dollars or 0.85 dollar per diluted share compared to 35.9 million dollars or 1.29 dollars per diluted share for the first quarter ended April 30, 2016. Net income decreased 38 percent and earnings per diluted share decreased 34 percent for the quarter. Sales for the first quarter were 237.7 million dollars, a decrease of 17 percent, while same-store sales for the quarter decreased 17 percent to last year.
"Our negative sales trend persisted throughout the first quarter, impacting margins and earnings as we continued to work through our merchandise missteps," stated John Cato, Chairman, President, and CEO in a media release, adding, "It is taking longer to work through these issues than expected and the remainder of the year will be impacted. We expect earnings for the year to be below last year."
Financial review of the first quarter
The company said, gross margin decreased 390 basis points to 38.7 percent of sales in the quarter, primarily due to lower merchandise margins and deleveraging of buying and occupancy costs.
The opened three stores and relocated one store during the quarter. As of April 29, 2017, the company operated 1,374 stores in 33 states, compared to 1,372 stores in 33 states as of April 30, 2016.