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US firm Cato Corporation's net income at $5.6 mn in H1 FY23

18 Aug '23
2 min read
Pic: Billy F Blume Jr / Shutterstock.com
Pic: Billy F Blume Jr / Shutterstock.com

Insights

  • American retailer Cato Corporation reported a net income of $5.6 million in H1 FY23, down from $7.4 million in H1 FY22.
  • Sales decreased by 7 per cent to $371.5 million, with same-store sales down 5 per cent.
  • Gross margin increased to 35.5 per cent.
  • In Q2 FY23, net income was $1.1 million, with sales of $181.2 million, down 7 per cent from Q2 FY22.
The Cato Corporation, a US-based retail company of women's fashions and accessories, has reported net income of $5.6 million or $0.27 per diluted share for the first half of fiscal 2023 (H1 FY23), ending July 29, 2023, a decline from $7.4 million or $0.35 per diluted share in H1 FY22. Sales were at $371.5 million, reflecting a 7 per cent decrease from $399.9 million in the same period last year. Same-store sales also decreased by 5 per cent compared to H1 FY22.

The gross margin increased to 35.5 per cent of sales in H1 FY23 from 34 per cent in H1 FY22, primarily due to increased merchandise margins and decreased freight expense. However, selling, general, and administrative expenses climbed to 33.3 per cent of sales compared to 30.3 per cent last year, the company said in a media release.

"Our year-to-date sales trend continues to be negatively impacted by pressure on our customers' discretionary spending," said John Cato, chairman, president, and chief executive officer.  "Our gross margin improved as we took steps to right size our inventory.  However, we believe the back half of the year will remain challenging."

In the second quarter of fiscal 2023 (Q2 FY23), the corporation reported net income of $1.1 million or $0.06 per diluted share, in contrast to a net loss of $2.3 million or minus $0.11 per diluted share for the same quarter in the previous year. Sales for Q2 FY23 stood at $181.2 million, marking a decrease of 7 per cent from sales of $195.0 million in Q2 FY22. The company's same-store sales for the quarter also decreased by 5 per cent compared to Q2 FY22.

Gross margin for the quarter increased to 35.1 per cent from 32.4 per cent of sales due to higher merchandise margins and decreased freight expense. Selling, general, and administrative expenses as a percent of sales increased from 31.2 per cent to 34 per cent during the quarter.

Fibre2Fashion News Desk (DP)

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