Charlotte, NC—Cato Corp. said today its first quarter profit declined 3% as sales fell due to “difficult economic conditions,” cooler temperatures as well as other factors.
For the quarter ended May 4, the specialty retailer posted earnings of $30.8 million, or $1.05 a share, compared to $31.7 million, or $1.09 a share, in the same quarter a year ago. Analysts’ estimate was for $1.03 a share.
Net sales decreased 2% to $269.7 million missing analysts’ estimate for $274.7 million in sales. Comparable store sales fell 5%.
Gross margin decreased 80 basis points to 41.3% primarily due to lower merchandise contribution as well as higher occupancy costs related to store growth.
“Continuing difficult economic conditions, higher payroll taxes, delayed income tax refunds and cooler than normal temperatures in March and April negatively impacted first quarter sales,” stated John Cato, chairman/president/ceo.
But Cato said the company’s second quarter expectations remain unchanged: earnings per share between 42 cents and 48 cents with comparable store sales down 3% to flat.
For the full year, Cato narrowed its profit forecast to between $1.66 and $1.84 a share. In March, the company projected a 2013 profit of $1.64 to $1.93 a share.
During the quarter, Cato opened three stores, relocated one and closed six, bringing its total to 1,307 in 31 states. It operates its namesake brand, along with Versona and It’s Fashion stores.