Charlotte, NC-based retailer of apparel and accessories for women, Cato Corporation reported a solid 18% growth in comparable-store sales (comps) for the 4 weeks ended May 3, 2014. The spectacular improvement in comps was attributed to the robust sales during the month due to the shift of Easter into April this year. Additionally, an improvement in the unemployment rate could be another factor that has benefited the retailers.
Further, for the 4-week period, Cato reported a year-over-year increase of 21% in total sales, which came in at $93.5 million.
Other retailers who are rejoicing after a productive Easter month are The Gap Inc. (GPS - Free Report) , Zumiez Inc. and Rite Aid Corp. (RAD - Free Report) registering comps growth of 9%, 8.2% and 5%, respectively.
Now coming back to Cato, the company reported a 6% increase in sales to $282.5 million for the first quarter fiscal 2014 ended May 3, 2014. Comps for the quarter were up 3%.
Despite a spectacular run in April, the first quarter results reflect weak comps for March due to the Easter shift into April. Looking at the combined results for March and April, we note that the comps were above expectations reflecting a 7% increase versus a 5% growth in the same period last year.
Based on the first quarter sales performance, the company has raised its earnings projections for the quarter to be in the range of $1.03–$1.05 per share compared with the prior earnings guidance of 89–95 cents per share. This also compares with the prior-year earnings of $1.05 per share. The Zacks Consensus Estimate for first quarter fiscal 2014 is pegged at $1.04 per share.
Cato is scheduled to report its first quarter results on May 20, 2014.
Moreover, during April the company expanded its store base with the opening of 4 new stores in Slidell, LA; Easton, MD; Bay City, MI; and Mitchell, SD. The company also shut down 2 stores in the month. As of May 3, 2014, this leading specialty retailer of women's fashion apparel and accessories operated 1,324 stores across 32 states.