CHARLOTTE, N.C., May 23, 2019 /PRNewswire/ -- The Cato Corporation (CATO) held its Annual Shareholders' Meeting this morning, reporting significant increases in net income and earnings per diluted share.
Cato's net income in 2018 was $30.5 million – up 257 percent, while earnings per share totaled $1.23 – up 262 percent. The company ended the year with more than $211 million in cash and investments – an increase of more than $10 million – and it remains debt-free.
"We view 2018 as a transition year for Cato, and we made significant progress," said John Cato, Chairman, President, and CEO. "We have stabilized our business, and we're cautiously optimistic about 2019."
In 2018, Cato returned more than $46 million to shareholders through dividends and share repurchases, maintaining a quarterly dividend of 33 cents per share. In November, Cato's board also authorized the repurchase of an additional 2 million shares.
During the meeting at Cato's corporate offices in Charlotte, N.C., shareholders elected a new board member: Theresa Drew, managing partner for the Carolinas practice of Deloitte.
Shareholders also re-elected D. Harding Stowe for a three-year term on the board that expires in 2022. Ed Weisiger, president and chairman of Carolina Tractor and Equipment, stepped down from the Cato Board after almost a decade of service.
"We thank Ed for providing energy, thoughtful insight and many other contributions that helped Cato continue to grow," Mr. Cato said.
In his address to shareholders, Mr. Cato credited the hard work and dedication of Cato associates, sharing updates on three key initiatives:
- Expanding eCommerce. In 2018, Cato added 200,000 email subscribers, giving the company a total of more than 2 million. Cato also implemented additional shipping and payment methods for ecommerce customers.
- Building an internal design organization, allowing the company to offer more exclusive products, rather than relying solely on outside vendors.
- Strengthening the company's sourcing offices overseas to improve merchandise quality and speed up product development.
"We want shoppers to always consider our brands, because we meet their lifestyle needs," Mr. Cato said. "That's why we continue to focus on ways to make it easy for women to shop. We've changed some of the merchandise we carry, and we've implemented strong, ongoing inventory control. We've lowered costs and strengthened our business."
Shareholders were also given updates on 2019 progress:
- Same-store sales for March and April combined increased by 3 percent
- Cato expects to close about 50 underperforming stores as part of an ongoing practice to strengthen operations
- Cato plans to open 12 new stores despite limited new shopping center development and limited space in desirable, existing locations
- Cato is nearing completion of the first project on a 360-acre, mixed-use community called Southbridge at the site of the former Charlotte Knights Stadium in Fort Mill, S.C. Roundpoint Mortgage Servicing Corp. will soon move into a 150,000-square-foot corporate headquarters.
"This is just the first project for the site," Mr. Cato said. "We expect many more announcements in the coming years."
The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories operating three 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 not historical in nature including, without limitation, statements regarding the Company's expected or estimated operational and financial results 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, the following: any actual or perceived deterioration in the conditions that drive consumer confidence and spending, including, but not limited to, levels of unemployment, fuel, energy and food costs, wage rates, tax rates, home values, consumer net worth and the availability of credit; uncertainties regarding the impact of any governmental responses to the foregoing conditions; competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and consumer demands; adverse weather 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.