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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street NW
Washington, D.C. 29549
Washington, D.C. 29549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 24, 2007
THE CATO CORPORATION
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 1-31340 | 56-0484485 | ||
| (State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||
| of Incorporation) | File Number) | Identification Number) | ||
| 8100 Denmark Road, Charlotte, North Carolina | 28273-5975 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
| (704) 554-8510 | ||||
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
| Item 2.02. Results of Operations and Financial Condition | ||||||||
| Item 9.01. Financial Statements and Exhibits | ||||||||
| SIGNATURES | ||||||||
| Exhibit Index | ||||||||
| Exhibit 99.1 | ||||||||
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THE CATO CORPORATION
Item 2.02. Results of Operations and Financial Condition.
On May 24, 2007, The Cato Corporation issued a press release regarding its financial results for
the first quarter ending May 5, 2007. A copy of this press release is furnished as Exhibit 99.1
hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.1 — Press Release issued May 24, 2007.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE CATO CORPORATION | ||
May 25, 2007
|
/s/ John P. D. Cato | |
Date
|
John P. D. Cato | |
| Chairman, President and | ||
| Chief Executive Officer | ||
May 25, 2007
|
/s/ Thomas W. Stoltz | |
Date
|
Thomas W. Stoltz | |
| Executive Vice President | ||
| Chief Financial Officer |
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Table of Contents
Exhibit 99.1
The CATO Corporation
NEWS RELEASE
FOR IMMEDIATE RELEASE
CEO Approval ________
For Further Information Contact:
Thomas W. Stoltz
Executive Vice President
Chief Financial Officer
704-551-7201
Executive Vice President
Chief Financial Officer
704-551-7201
CATO REPORTS 1Q EPS DOWN 9%
Revises 2007 Guidance
Revises 2007 Guidance
Charlotte, NC (May 24, 2007) — The Cato Corporation (NYSE: CTR) today reported net income of
$18.7 million or $.59 per diluted share for the first quarter ended May 5, 2007, compared to net
income of $20.8 million or $.65 per diluted share for the first quarter ended April 29, 2006. Net
income decreased 10% and earnings per diluted share decreased 9% from the prior year (the
difference in percentage change is due to rounding). Sales for the first quarter were $224.1
million, a 2% decrease from sales of $229.7 million for the first quarter last year. The Company’s
first quarter comparable store sales decreased 5%.
“Lower sell-throughs of regular priced goods had a negative impact on sales and gross margin in the
first quarter,” said John Cato, Chairman, President, and Chief Executive Officer. “As a result of
higher than planned inventories at the end of the first quarter, we expect higher markdowns in the
second quarter. Also, after two quarters of continuing weakness in our sales and the softness in
the women’s specialty apparel segment, we are forecasting that trend to continue and now estimate
comparable store sales to be in the range of down 3% to flat for the second quarter and for the
balance of the year. We now expect second quarter earnings per diluted share to be in the range of
$.27 to $.31 versus $.38 last year. For the year, we are estimating earnings per diluted share to
be in the range of $1.11 to $1.31 versus $1.62 last year.”
During the first quarter, the Company opened 10 stores and relocated six stores. The Company
8100 Denmark Road
P. O. Box 34216
Charlotte, NC 28234
(704) 554-8510
P. O. Box 34216
Charlotte, NC 28234
(704) 554-8510
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now expects to open an additional 70 new stores and close 10 for the balance of the year. As of
May 5, 2007, the Company operated 1,286 stores in 31 states, compared to 1,252 stores in 31 states
as of April 29, 2006.
The Cato Corporation is a leading specialty retailer of value-priced women’s fashion apparel
operating two divisions, “Cato” and “It’s Fashion!”. The Company offers exclusive merchandise with
fashion and quality comparable to mall specialty stores 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 financial results for the second quarter and year 2007
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; 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. Additional
information concerning these and other important factors can be found in Item 1A. “Risk Factors” of
the Company’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form
10-Q filed with the Securities and Exchange Commission. 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.
# # #
8100 Denmark Road
P. O. Box 34216
Charlotte, NC 28234
(704) 554-8510
P. O. Box 34216
Charlotte, NC 28234
(704) 554-8510
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THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED MAY 5, 2007 AND APRIL 29, 2006
(Dollars in thousands, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED MAY 5, 2007 AND APRIL 29, 2006
(Dollars in thousands, except per share data)
| Quarter Ended | ||||||||||||||||
| May 5, | % | April 29, | % | |||||||||||||
| 2007 | Sales | 2006 | Sales | |||||||||||||
REVENUES |
||||||||||||||||
Retail sales |
$ | 224,134 | 100.0 | % | $ | 229,741 | 100.0 | % | ||||||||
Other income
(principally finance, late fees and layaway charges) |
3,094 | 1.4 | % | 3,319 | 1.5 | % | ||||||||||
Total revenues |
227,228 | 101.4 | % | 233,060 | 101.5 | % | ||||||||||
GROSS MARGIN (Memo) |
80,712 | 36.0 | % | 87,628 | 38.2 | % | ||||||||||
COSTS AND EXPENSES, NET |
||||||||||||||||
Cost of goods sold |
143,422 | 64.0 | % | 142,113 | 61.8 | % | ||||||||||
Selling, general and administrative |
51,132 | 22.8 | % | 54,567 | 23.8 | % | ||||||||||
Depreciation |
5,391 | 2.4 | % | 5,168 | 2.3 | % | ||||||||||
Interest expense |
4 | 0.0 | % | 10 | 0.0 | % | ||||||||||
Interest and other income |
(1,893 | ) | -0.8 | % | (1,552 | ) | -0.7 | % | ||||||||
Cost and expenses, net |
198,056 | 88.4 | % | 200,306 | 87.2 | % | ||||||||||
Income Before Income Taxes |
29,172 | 13.0 | % | 32,754 | 14.3 | % | ||||||||||
Income Tax Expense |
10,502 | 4.7 | % | 11,955 | 5.2 | % | ||||||||||
Net Income |
$ | 18,670 | 8.3 | % | $ | 20,799 | 9.1 | % | ||||||||
Basic Earnings Per Share |
$ | 0.60 | $ | 0.67 | ||||||||||||
Basic Weighted Average Shares |
31,352,592 | 31,084,206 | ||||||||||||||
Diluted Earnings Per Share |
$ | 0.59 | $ | 0.65 | ||||||||||||
Diluted Weighted Average Shares |
31,897,676 | 31,814,193 | ||||||||||||||
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
| May 5, | April 29, | February 3, | ||||||||||
| 2007 | 2006 | 2007 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
ASSETS |
||||||||||||
Current Assets |
||||||||||||
Cash and cash equivalents |
$ | 21,164 | $ | 25,319 | $ | 24,833 | ||||||
Short-term investments |
132,450 | 95,752 | 98,709 | |||||||||
Accounts receivable — net |
45,287 | 47,791 | 45,958 | |||||||||
Merchandise inventories |
117,037 | 103,145 | 115,918 | |||||||||
Other current assets |
14,429 | 11,379 | 14,095 | |||||||||
Total Current Assets |
330,367 | 283,386 | 299,513 | |||||||||
Property and Equipment — net |
126,809 | 131,516 | 128,461 | |||||||||
Other Assets |
4,361 | 10,799 | 4,348 | |||||||||
TOTAL |
$ | 461,537 | $ | 425,701 | $ | 432,322 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
Current Liabilities |
$ | 137,464 | $ | 135,515 | $ | 123,049 | ||||||
Noncurrent Liabilities |
32,115 | 32,787 | 32,480 | |||||||||
Stockholders’ Equity |
291,958 | 257,399 | 276,793 | |||||||||
TOTAL |
$ | 461,537 | $ | 425,701 | $ | 432,322 | ||||||
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