Charlotte, NC-based retailer of apparel and accessories for women, Cato Corporation posted yet another month of improved comparable-store sales (comps) performance for the 4 weeks ended May 31, 2014. Comps for the period registered a growth of 3%.
Further, for the 4-week period, Cato reported a year-over-year increase of 6% in total sales, which came in at $86.4 million versus sales of $81.7 million registered for the 4-week period ended Jun 1, 2013. We believe that the May retail sales have benefited from warmer weather, huge promotional activities and Memorial Day weekend which helped in boosting customer traffic.
Other retailers who have registered strong comps growth during the month include L Brands, Inc. (LB - Analyst Report) , Zumiez Inc. (ZUMZ - Analyst Report) and Costco Wholesale Corp. (COST - Analyst Report) with comps growth of 3%, 3.6% and 6%, respectively.
Now coming back to Cato, the company reported a 6% increase in sales to $368.9 million for the seventeen-week period ended May 31, 2014. Comps for the year-to-date period were up 3%.
During May the company expanded its store base with the opening of 2 new stores in Winter Park, FL and Odessa, TX. On the other hand, the company shut down 1 store in the month. As of May 31, 2014, this leading specialty retailer of women's fashion apparel and accessories operated 1,325 stores across 32 states.
Recently, Cato released financial results for the first quarter of fiscal 2014 wherein its sales improved 5.7% year over year to $282.5 million while comparable-store sales (comps) climbed 3%. Further, the company’s earnings of $1.04 per share came in line with the Zacks Consensus Estimate but slipped 1% year-over-year mainly due to higher selling, general and administrative expenses.
In view of the impressive first quarter results, the company has raised its earnings guidance range for fiscal 2014 to $1.66–$1.79 per share from $1.47–$1.66 projected earlier. However, Cato reaffirms its comps guidance for the fiscal, which is expected to remain flat or decrease by a maximum of 2%.