Cato 2017 Annual Meeting Highlights
Mr. Cato stated The Company reported record earnings in 2015 and achieved over
"The good news is we have identified these issues related to our merchandise assortment and design and are taking corrective actions that will put us back on track," Mr. Cato said. "While we had hoped to turn the corner on this by now, our merchandise corrections will continue through the summer and most likely into fall. Bottom line, this means 2017 will be a very challenging year."
Mr. Cato mentioned several factors compounding the challenges of a volatile and competitive retail market. Among them are the rising cost of living, consumer spending shifts away from apparel and more toward "experiences," the general decline in brick-and-mortar sales due to online shopping, and the continuing lack of new shopping center development and increased competition for good retail space.
But Mr. Cato also outlined a number of reasons he remains optimistic about The Company's future. First, he said, Cato is committed to providing exclusive styles at a great value by utilizing its new internal design team. Second, the opening of sourcing offices in
Mr. Cato indicated that the overall strategy at Cato remains sound. "We are committed to growing our business by driving same-store sales profitably, growing our e-commerce business and adding additional stores when the right space becomes available," stated Mr. Cato.
In addition, Mr. Cato remarked that, while Cato is not immune to the effects of the distressed retail environment, The Company is better positioned than most. Cato stores are located in strip shopping centers, which offer convenience for our customers and lower occupancy costs as compared to malls, where much of the retail difficulty is occurring. Also, Cato stores are located in smaller markets with less competition than in major cities. The company's everyday low-price strategy gives our customers confidence they can shop at any time and always get the best value. Additionally, the company has a loyal customer base that still prefers the in-store shopping experience. Mr. Cato also stressed that Cato is very strong financially with over
Mr. Cato also reiterated The Company's commitment to its shareholders. In 2016, Cato returned more than
In summary, Mr. Cato said, "The challenges of 2016 are continuing this year. But the good news is we have recognized our merchandising missteps and are correcting them as quickly as possible."
In a meeting of the Board of Directors prior to the shareholder meeting, the Board declared a regular quarterly dividend of
During the Annual Meeting, shareholders re-elected
Statements in this press release not historical in nature including, without limitation, statements regarding the Company's expected or estimated operational and financial results 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: any actual or perceived deterioration in the conditions that drive consumer confidence and spending, including, but not limited to, levels of unemployment, fuel, energy and food costs, wage rates, tax rates, home values, consumer net worth and the availability of credit; uncertainties regarding the impact of any governmental responses to the foregoing conditions; competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and consumer demands; adverse weather or similar conditions that may affect our sales or operations; inventory risks due to shifts in market demand, including the ability to liquidate excess inventory at anticipated margins; 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 and in other reports the Company files with or furnishes to the
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John R. Howe, Executive Vice President, Chief Financial Officer, 704-551-7315