Charlotte, NC-based retailer of apparel and accessories for women, Cato Corporation (CATO) reported a 3% rise in comparable-store sales (comps) for the 4 weeks ended Nov 2, 2013, following a 3% decline in September comps. Net sales for October rose 4% to $66.7 million from $64.3 million reported in the year-ago period. Cooler weather compared to the prior year drove the rise in sales.
Of late, Cato’s comps have been waning, as its collections are failing to attract customers. Looking at the company’s performance in the first nine months of 2013, we note that comps had fallen every month, except April and June, when it rose by 1% each.
For the third quarter of 2013 (13 weeks ended Nov 2, 2013), Cato’s sales inched up 1% to $198.8 million from $197.6 million in the year-ago comparable quarter. However, comps declined 1% in the said quarter.
On a year-to-date basis, Cato’s sales inched down 1% to $695.3 million compared with $701.8 million during the same time period in the prior year. Comps for the period slid 3% from the comparable year-ago period.
Apart from Cato, other store chain retailers that posted comparable-store sales data for the month of October include The Buckle Inc. (BKE), Gap Inc. (GPS) and Zumiez Inc. (ZUMZ). These companies registered comps growth of 2.6%, 4% and 1.2%, respectively.
Cato now expects its third-quarter fiscal 2013 earnings to range from 13 to 15 cents per share, up from its prior forecast of earnings at the higher end of 2–9 cents per share. This also compares to earnings of 16 cents in the year-ago quarter. Currently, the Zacks Consensus Estimate stands at 9 cents per share.
Further, the company forecasts a challenging sales environment in the upcoming quarter.
In October, the company inaugurated 6 new outlets, 1 each in Flint, Michigan; Lee’s Summit, Missouri; Durham, North Carolina; Norman, Oklahoma; Altoona, Pennsylvania; and Irving, Texas. Additionally, the company relocated its store in Morganton, North Carolina.
In the nine months of 2013, the company opened 16 new outlets, relocated 4 stores, and closed 8 stores. As of Nov 2, 2013, Cato had 1,318 stores in 32 states compared with 1,306 stores in 31 states as of Oct 27, 2012.
The company is expected to release third-quarter fiscal 2013 results on Nov 21, 2013.
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