Cato Reports December Same-Store Sales Down 4%

Lowers 4Q EPS Guidance

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Jan 09, 2014, 07:00 ET

CHARLOTTE, N.C., Jan. 9, 2014 /PRNewswire/ -- The Cato Corporation (NYSE: CATO) today reported sales for the five weeks ended January 4, 2014 of $100.1 million, a 3% decrease from sales of $103.3 million for the five weeks ended December 29, 2012. Same-store sales for the month decreased 4%.

Sales for the eleven months ended January 4, 2014 were $862.7 million, a 1% decrease from sales of $870.0 million for the eleven months ended December 29, 2012. The Company's year-to-date same-store sales decreased 3%.

"December same-store sales results were negatively impacted by bad weather in a number of our markets early in the month," stated John Cato, Chairman, President, and Chief Executive Officer. "Excluding the impact of this weather event, the sales environment remained difficult but same-store sales were in line with our year-to-date trend. We now expect that fourth quarter earnings per diluted share will be within the range of $0.11 to $0.15, versus our original guidance of $.17 to $.23 and $0.27 last year. The Company's estimate for full year earnings per diluted share is now in the range of $1.84 to $1.88 vs. our most recent guidance of $1.90 to $1.96 and $2.11 last year. Reflected in both the fourth quarter and full year revised guidance is the effect of $0.08 in store fixture write-offs and store impairment charges. And, when comparing the fourth quarter and year to 2012, please note the prior year numbers include the positive impact of an additional week under the retail 52-53 week calendar."

"Also, we launched our ecommerce site in late November and have been pleased with our initial results and the performance of our in-house operated website," commented Mr. Cato. "We do not expect a significant net income contribution from ecommerce in 2013 or 2014."

As noted above, the Company's fourth quarter 2013 includes 13 weeks compared to 14 weeks in 2012, and fiscal year 2013 includes 52 weeks compared to 53 weeks in 2012.

The Company closed 12 stores during December. As of January 4, 2014, the Company operated 1,316 stores in 32 states, compared to 1,311 stores in 31 states as of December 29, 2012.

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. Versona is a unique fashion destination offering accessories and apparel including jewelry, handbags and shoes at exceptional prices every day. It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day. The Company also offers exclusive merchandise found in its Cato stores at www.catofashions.com. Additional information on The Cato Corporation is available at www.catocorp.com.

Statements in this press release not historical in nature including, without limitation, statements regarding the Company's expected or estimated financial results for the fourth quarter and full year and any related assumptions 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: general economic conditions, including, but not limited to, the continuation or worsening of (i) the current adverse or recessionary conditions affecting the U.S. and global economies and consumer spending and (ii) the current adverse conditions in the U.S. and global credit markets; uncertainties regarding the impact of any governmental responses to the foregoing adverse economic and credit market conditions; competitive factors and pricing pressures; the Company's ability to predict fashion trends; consumer apparel buying patterns; adverse weather conditions and inventory risks due to shifts in market demand 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, as amended or supplemented, 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.

SOURCE The Cato Corporation