EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
For Further Information Contact:
CATO REPORTS 2Q RESULTS
CHARLOTTE, N.C. (August 17, 2023) – The Cato Corporation (NYSE: CATO) today reported net income of $1.1
million or $0.06 per diluted share for the second quarter ended July 29, 2023, compared to a net loss of $2.3 million or
($0.11) per diluted share for the second quarter ended July 30, 2022.
Sales for the second quarter ended July 29, 2023 were $181.2 million, or a decrease of 7% from sales of $195.0 million
for the second quarter ended July 30, 2022. The Company’s same-store sales for the quarter decreased 5% compared to
2022.
For the six months ended July 29, 2023, the Company reported net income of $5.6 million or $0.27 per diluted share,
compared to net income of $7.4 million or $0.35 per diluted share for the six months ended July 30, 2022. Sales for the
six months ended July 29, 2023 were $371.5 million, a decrease of 7% from sales of $399.9 million for the six months
ended July 30, 2022. Year-to-date same-store sales decreased 5% compared to 2022.
stated John Cato, Chairman, President, and Chief Executive Officer. “Our gross margin improved as we took steps to
right size our inventory. However, we believe the back half of the year will remain challenging.”
Gross margin increased to 35.1% from 32.4% of sales in the quarter due to higher merchandise margins and decreased
freight expense. SG&A expenses as a percent of sales increased from 31.2% to 34.0% of sales during the quarter
primarily due to increased payroll and insurance expense. Tax expense for the quarter was $1.3 million versus $5.7
million in the prior year, reflecting a more normalized tax rate in the quarter compared to last year.
Year -to-date gross margin increased to 35.5% of sales from 34.0% the prior year primarily due to increased merchandise
margins and decreased freight expense. Year-to-date SG&A expenses were 33.3% as a percent of sales versus 30.3% in
the prior year primarily due to increased payroll and insurance expense. Income tax expense for the first half decreased to
$3.5 million versus $7.6 million last year.
During the second quarter ended July 29, 2023, the Company opened two new stores, relocated one store and closed 19
stores. As of July 29, 2023, the Company has 1,247 stores in 31 states, compared to 1,312 stores in 32 states as of July
30, 2022.
concepts, “Cato,” “Versona” and “It’s Fashion.” The Company’s Cato stores offer exclusive merchandise with fashion
and quality comparable to mall specialty stores at low prices every day. The Company also offers exclusive merchandise
found in its Cato stores at www.catofashions.com. Versona is a unique fashion destination offering apparel and
accessories including jewelry, handbags and shoes at exceptional prices every day. Select Versona merchandise can also
be found at www.shopversona.com. It’s Fashion offers fashion with a focus on the latest trendy styles for the entire
family at low prices every day.
Statements in this press release that express a belief, expectation or intention, as well as those that are not a historical
fact,
results, activities or opportunities, and potential impacts and effects of the coronavirus are considered “forward-looking”
within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based
on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause
actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but
are not limited to, any actual or perceived deterioration in the conditions that drive consumer confidence and spending,
including, but not limited to, prevailing social, economic, political and public health conditions and uncertainties, levels
of unemployment, fuel, energy and food costs, wage rates, tax rates, interest rates, home values, consumer net worth and
the availability of credit; changes in laws or regulations affecting our business including but not limited to tariffs;
uncertainties regarding the impact of any governmental action regarding, or responses to, the foregoing conditions;
competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and
consumer demands; our ability to successfully implement our new store development strategy to increase new store
openings and the ability of any such new stores to grow and perform as expected; adverse weather, public health threats
(including the global coronavirus (COVID-19) outbreak) or similar conditions that may affect our sales or operations;
inventory risks due to shifts in market demand, including the ability to liquidate excess inventory at anticipated margins;
and other factors discussed under “Risk Factors” in Part I, Item 1A of the Company’s most recently filed annual report
on Form 10-K and in other reports the Company files with or furnishes to the SEC from time to time. The Company does
not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it
clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any
changes made to this press release by wire or Internet services
* * *
THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED July 29, 2023 AND July 30, 2022
(Dollars in thousands, except per share data)
Quarter Ended
Six Months Ended
July 29,
%
July 30,
%
July 29,
%
July 30,
%
2023
Sales
2022
Sales
2023
Sales
2022
Sales
REVENUES
$
181,181
100.0%
$
195,006
100.0%
$
371,492
100.0%
$
399,939
100.0%
1,690
0.9%
1,858
1.0%
3,429
0.9%
3,646
0.9%
182,871
100.9%
196,864
101.0%
374,921
100.9%
403,585
100.9%
GROSS MARGIN (Memo)
63,564
35.1%
63,257
32.4%
131,788
35.5%
135,947
34.0%
COSTS AND EXPENSES, NET
117,617
64.9%
131,749
67.6%
239,704
64.5%
263,992
66.0%
61,618
34.0%
60,768
31.2%
123,552
33.3%
121,209
30.3%
2,510
1.4%
2,811
1.4%
4,867
1.3%
5,554
1.4%
(1,334)
-0.7%
(1,884)
-1.0%
(2,231)
-0.6%
(2,287)
-0.6%
180,411
99.6%
193,444
99.2%
365,892
98.5%
388,468
97.1%
Income Before Income Taxes
2,460
1.4%
3,420
1.8%
9,029
2.4%
15,117
3.8%
Income Tax Expense
1,333
0.7%
5,694
2.9%
3,475
0.9%
7,643
1.9%
Net Income (Loss)
$
1,127
0.6%
$
(2,274)
-1.2%
$
5,554
1.5%
$
7,474
1.9%
Basic Earnings Per Share
$
0.06
$
(0.11)
$
0.27
$
0.35
Basic Weighted Average Shares
20,593,949
21,177,321
20,474,142
21,261,405
Diluted Earnings Per Share
$
0.06
$
(0.11)
$
0.27
$
0.35
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
July 29,
January 28,
2023
2023
(Unaudited)
(Unaudited)
ASSETS
Current Assets
$
55,977
$
20,005
77,222
108,652
3,877
3,787
26,915
26,497
92,718
112,056
7,098
6,676
Total Current Assets
263,807
277,673
Property and Equipment - net
73,871
70,382
Noncurrent Deferred Income Taxes
9,888
9,213
Other Assets
21,770
21,596
Right-of-Use Assets, net
138,331
174,276
$
507,667
$
553,140
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
$
127,971
$
135,597
Current Lease Liability
32,431
67,360
Noncurrent Liabilities
16,342
16,183
Lease Liability
105,390
107,407
Stockholders' Equity
225,533
226,593
$
507,667
$
553,140