US: Cato lowers forecast despite Q2 profit rise
- Q2 profit rose to $18.1m from $17.0m
- Sales edged up 1% to $234.1m
- Same-store sales decreased 1%
Value-priced fashion retailer The Cato Corporation has managed to lift its second quarter profit by 7%, but warned rising raw material costs will have a negative effect on second half performance.
"Same-store sales for the second quarter were within our estimated range and we were able to control expenses well," said chairman, president and CEO John Cato. "Our same-store sales trend reflects the difficult economic conditions and uncertainty affecting our customers, especially the lower income customer."
Higher markdowns also ate into the retailer's second quarter gross margin, which slipped to 38.0% from 39.0% last year.
The company now expects earnings per share for second half of the year to be at the low end of its original guidance range of $2.15 to $2.21, versus $2.00 last year.
The following is a general roundup of US apparel and shoe retailers' January 2012 sales results....
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