CHARLOTTE, N.C., May 24, 2018 /PRNewswire/ -- The Cato Corporation CATO today reported net income of $23.4 million or $.94 per diluted share for the first quarter ended May 5, 2018, compared to net income of $22.2 million or $.85 per diluted share for the first quarter ended April 29, 2017.  Net income increased 5% and earnings per diluted share increased 11% for the quarter.  Sales for the first quarter were $236.0 million, or a decrease of 1% from sales of $237.7 million for the first quarter ended April 29, 2017.   The Company's same-store sales for the quarter decreased 1% to last year.

"We are starting to see more favorable sales trends as a result of adjustments to our merchandise strategy," stated John Cato, Chairman, President, and Chief Executive Officer.  "We remain optimistic about our ability to build on this momentum going forward."

Gross margin increased 1.0% to 39.7% of sales in the quarter, primarily due to higher merchandise margins and lower buying and occupancy costs.  SG&A expenses as a percent of sales increased 1.1% to 28.0% during the quarter primarily due to higher incentive compensation and insurance costs offset by lower payroll expenses.  The effective tax rate decreased to 11.9% versus the prior year at 14.7% due to ongoing tax saving initiatives and favorable tax adjustments in the quarter.  The Company ended the quarter with cash and short-term investments of $222.3 million.

As of May 5, 2018, the Company operated 1,351 stores in 33 states, compared to 1,374 stores in 33 states as of April 29, 2017.

The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories operating three concepts, "Cato," "Versona" and "It's Fashion."  The Company's Cato stores offer exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices every day.  The Company also offers exclusive merchandise found in its Cato stores at www.catofashions.com.  Versona is a unique fashion destination offering apparel and accessories including jewelry, handbags and shoes at exceptional prices every day.  Select Versona merchandise can also be found at www.shopversona.com.  It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day.

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 SEC from time to time.  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.

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SOURCE The Cato Corporation