Cato Beats Q3 Net Views, Misses Sales Expectations

Cato Corp CATO beat Wall Street consensus for its third-quarter earnings, although its sales for the recent period were lower than expected.

The women's apparel retailer gained 2.6 percent early Thursday, trading recently at $37.90 per share.

Cato posted same-store sales growth of 4 percent for the recent period, while total sales grew 8 percent.

The company's third-quarter gross margin equaled 36.2 percent of sales compared with 35.2 percent last year, primarily due to higher merchandise margin.

Cato adjusted its fourth-quarter outlook to account for recent share repurchases, and now expects earnings of $0.13 to $0.17 a share.

Wall Street expects fourth-quarter earnings of $0.17 a share.

The company's recent third-quarter net income grew to $5.7 million, or $0.20 per share, from $4.9 million, or $0.17 per share last year. Retail sales grew 8 percent to $213.8 million, from $198.8 million last year.

Wall Street expected earnings of $0.16 per share, on revenue of $215.9 million.

Cato told investors November 6 to expect third-quarter earnings of $0.15 to $0.17 per share.