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Cato net income increases 46 percent in Q3

By Prachi Singh

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The Cato Corporation reported net income of 8.3 million dollars for the third quarter ended October 31, 2015, compared to net income of 5.7 million dollars for the third quarter ended November 1, 2014, an increase of 46 percent.

“Our third quarter results exceeded our latest guidance," stated John Cato, Chairman, President, and Chief Executive Officer, adding, “This was primarily the result of recent stronger sales trends and a favorable tax adjustment. We expect fourth quarter earnings per diluted share will be at the lower end of our original guidance range of 0.35 dollar to 0.39 dollar (versus 0.33 dollar last year, an increase of 6 percent to 18 percent), due to unfavorable comparisons to fourth quarter last year. For the year, earnings per diluted share are now estimated to be in the range of 2.31 dollars to 2.35 dollars versus 2.15 dollars last year, an increase of 7 percent to 9 percent.”

Third quarter and nine months highlights

Earnings per diluted share for the third quarter were 0.30 dollar, compared to 0.20 dollar last year, an increase of 50 percent. Sales for the quarter were 223.3 million dollars, a 4 percent increase over sales of 213.8 million dollars for the third quarter ended November 1, 2014. Same-store sales for the quarter increased 2 percent.

For the nine months ended October 31, 2015, the company earned net income of 55 million dollars, compared to net income of 51.4 million dollars for the nine months ended November 1, 2014, an increase of 7 percent. Earnings per diluted share were 1.97 dollars compared to 1.82 dollars last year, an increase of 8 percent. Sales were 754.1 million dollars, an increase of 2 percent from sales of 740 million dollars for the nine months ended November 1, 2014. Year-to-date same-store sales decreased 1 percent.

Year-to-date, the company has opened 28 new stores, relocated eight stores, and closed four stores. The company now expects to open 31 stores during 2015, down from last estimate of 40 due to a lack of shopping center development and increased competition for available space. As of October 31, 2015, the company operated 1,370 stores in 32 states, compared to 1,343 stores in 32 states as of November 1, 2014.

Cato Corporation