Higher revenues and a healthy margin gain helped Cato Corp. expand its bottom line 89.1 percent in the fourth quarter.
In the three months ended Jan. 30, the specialty retailer’s net income climbed to $7.3 million, or 25 cents a diluted share, versus $3.9 million, or 13 cents, in the year-ago quarter.
Cato’s overall revenues, which include financing income, gained 4.1 percent in the quarter to $220.9 million from $212.2 million. Standalone retail sales grew 4.1 percent as well to $217.7 million while same-store sales picked up 2 percent. Analysts polled by Yahoo Finance had expected EPS of 22 cents on revenues of $211.5 million, on average.
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John Cato, president, chairman and chief executive officer of the Charlotte, N.C.-based retailer, credited expense and inventory controls for the results. Cato’s gross margin increased 420 basis points in the period to 34.7 percent of sales.
The company said it expects first-quarter EPS to be between 71 cents and 75 cents, above the consensus estimate of 70 cents.
Despite the stronger results, investors shied away from the firm’s stock Thursday, sending shares down 3.1 percent to $20.98.
In 2009, the company’s bottom line grew 36.1 percent to $45.8 million, or $1.55 a share, from $33.6 million, or $1.14 a share, in 2008. Revenues gained 3.1 percent in the 12 months to $884 million from $857.7 million.