The holiday season was disappointing for
), a specialty retailer of fashion apparel, footwear and
accessories, compelling management to lower its fiscal 2012
The company witnessed a 7% decline in comparable store sales
(comps) for December 2012, which fell short of management's
expectations. Moreover, results worsened sequentially as Cato
registered a 2% decline in comps for November 2012.
Compared to its peer,
), Cato seems to be losing market share as the former reported
better-than-expected sales results. Buckle witnessed an
augmentation of 1% in comps during the period under review.
For the five-week period ended December 29, 2012, Cato's total
sales decreased 4% to $103.3 million compared with total sales of
$107.5 million for the five-week period ended December 31,
As per the company, total sales remained flat at $870 million
for the 11 months ended December 29, 2012 compared with the
prior-year period. However, comps marked a decline of
Following the sluggish results, management lowered its
earnings guidance range to 34 cents - 36 cents a share for the
fourth quarter of fiscal 2012. The company earlier forecasted
earnings to be in the range of 38 cents - 42 cents. The company
now expects fiscal 2012 earnings in the range of $2.17 to $2.19
per share, down from its earlier guidance of $2.22 to $2.26 per
In the last 7 days, the Zacks Consensus Estimate for the
fourth quarter and fiscal 2012 went down by 5 cents and 6 cents,
respectively to 35 cents and $2.18 per share.
Earlier, the company reported third-quarter fiscal 2012
earnings of 16 cents a share that surpassed the Zacks Consensus
Estimate of 14 cents. However, the reported earnings plunged 24%
year over year. Total sales inched up 2% to $197.6 million, while
comps marked a decline of 2% during the quarter.
Headquartered in Charlotte, North Carolina, Cato Corporation
operates 1,311 stores across 31 states as of December 29, 2012.
Currently, we maintain a long-term 'Neutral' recommendation on
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