US: Promo environment hits Cato Corp's Q4
- Q4 earnings down 52%
- Margin flat at 34.7%
- Sales fall 7%
A highly promotional holiday sales season and poor weather conditions weighed on Cato Corporation's earnings in the fourth quarter.
Net income dropped to US$3.8m, down 52% from $7.9m a year earlier in the three months ended 2 February.
Gross margin was relatively flat at 34.7% of sales as merchandise margins held in the very promotional environment.
Sales fell 7% to $215.2m, while same-store sales dropped 3% from a year earlier.
"Results for 2013 were negatively impacted by the continuing difficult economic situation our customers have faced for some time now," said CEO John Cato. "Even with the very challenging environment, we have continued to grow our store base, manage our inventory, control costs and, most importantly, remain profitable."
Cato added that results were impacted by "a very promotional holiday sales season" as well as a number of winter storms in December and January. In addition, the comparison of fourth quarter results to the prior year was negatively impacted by this fiscal having one less week than the prior year period.
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