US: Cato cautious on FY amid Q3 sales fall
- Q3 profit rose 4% to $6.1m from $5.9m
- Sales were down 2% to $194.1m from $198.2m
- Same-store sales dropped 3%
Value fashion retailer The Cato Corporation expects full-year earnings to come in at the low end of forecasts after seeing third-quarter sales fall amid difficult economic conditions.
The company, which operates the Cato, Versona and It's Fashion stores, booked a 4% rise in quarterly profit thanks to efforts to maintain merchandise margin and control costs. But gross margin rate fell to 35.2% from 35.9% last year, which is said was due to higher occupancy costs related to store development.
"Our third quarter same-store sales decrease reflects the continuing difficult economic situation facing our customers," said chairman, president and CEO John Cato.
"However, due to our current same-store sales trend, we now expect fourth quarter earnings per diluted share will be at the lower end of our original guidance of $0.32 to $0.35 versus $0.37 last year.
"For the year, earnings per diluted share are estimated to be in the range of $2.18 to $2.21 vs. $2.00 last year, as restated, an increase of 9% to 11%."
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