Cato Corp warns of "challenging" 2015
- Q4 profit jumps 139% to $9.2m
- Sales up 11% to $237.8m
- Company warns of challenging 2015
Value fashion retailer Cato Corp has warned that 2015 may continue to be challenging, despite more than doubling its net profit during the fourth quarter, and favourable weather boosting sales.
The US company said net income reached $9.2m for the three months to 31 January, up from $3.8m in the same period of the prior year.
Chairman, president and CEO John Cato said earnings were positively impacted by sales “above our trend”, primarily due to favourable weather.
Sales increased 11% to $237.8m from $215.2m a year ago, while comparable store sales were up 8%. Gross margin improved to 36.5% from 34.7%, primarily due to higher merchandise margins.
For the full year, net income increased 11% to $60.5m from $54.3m last year. Sales rose 7% to $977.9m from $910.5m in the prior year, and comparable store sales were up 4%.
However, the group said the start of 2015 has been “difficult”, with February comparable store sales down 10% due to adverse weather. And Cato believes 2015 may continue to be challenging.
For fiscal 2015, Cato expects earnings per share to range from $2.19 to $2.03, compared to $2.15 in 2014. Comparable store sales are forecast to be flat to down 2%, and gross margin to decline to between 38% and 37.8%, from 38.6% last year.
While the group plans to open 45 new stores during the year, up to 13 are expected to close by year-end.
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