Cato Reports December Same-Store Sales Down 7% Lowers 4Q EPS Guidance

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Jan 03, 2013, 07:00 ET

CHARLOTTE, N.C., Jan. 3, 2013 /PRNewswire/ -- The Cato Corporation (NYSE: CATO) today reported sales for the five weeks ended December 29, 2012 of $103.3 million, a 4% decrease from sales of $107.5 million for the five weeks ended December 31, 2011. Same-store sales for the month decreased 7%.

Sales for the eleven months ended December 29, 2012 were $870.0 million, flat to sales of $870.2 million for the eleven months ended December 31, 2011. The Company's year-to-date same-store sales decreased 3%.

"December same-store sales results were well below expectations and our year-to-date trend," commented John Cato, Chairman, President, and Chief Executive Officer. "We now expect that fourth quarter earnings per diluted share will be within the range of $0.34 to $0.36, versus our original guidance of $.38 to $.42 and $0.35 last year. The Company's estimate for full year earnings per diluted share is now in the range of $2.17 to $2.19 vs. our most recent guidance of $2.22 to $2.26 and $2.21 last year."

The Company's earnings guidance for the fourth quarter and year now reflects the estimated tax benefit of the extension of the Work Opportunity Tax Credit by The American Taxpayer Relief Act of 2012.

Also, the Company's fourth quarter 2012 includes 14 weeks compared to 13 weeks in 2011 and fiscal year 2012 includes 53 weeks compared to 52 weeks in 2011. Earnings guidance for both the fourth quarter and year reflects the impact of the additional week.

The Company closed one store during December. As of December 29, 2012, the Company operated 1,311 stores in 31 states, compared to 1,287 stores in 31 states as of December 31, 2011.

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 and nationally recognized urban brands for the entire family at low prices every day. 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