Keeping its positive sales trend alive for the fourth consecutive month, The Cato Corporation CATO recently posted healthy comparable-store sales (comps) data for the five weeks ended Nov 28, 2015.
Comps inched up 1% from the year-ago period, exceeding the company’s expectations. Total November sales improved 3% to $76.0 million from $73.8 million reported a year ago.
Though November comps were better than expected, the company remains cautious of the rest of the holiday season and fourth-quarter fiscal 2015, owing to the tough retail environment and intense promotional headwinds.
Alongside, the company posted its sales data for the ten months ended Nov 28, 2015, wherein sales improved 2% to $830.1 million, while year-to-date comps slipped 1%.
Moreover, in November, Cato opened three stores, one each in Guymon, OK, Farmington, NM, and Huntsville, AL. Also, the company relocated one store in Eagle Pass, TX, during the month. Consequently, Cato operated 1,373 stores across 32 states as of Nov 28, 2015, increasing from the count of 1,348 stores as of Nov 29, 2014.
Cato also recently posted its third-quarter fiscal 2015 results, which fared better than its expectations. The company’s quarterly earnings of 30 cents per share beat the Zacks Consensus Estimate of 26 cents and soared 50% year over year. Further, total revenue for the quarter advanced 4.4% to $225.5 million, with comps trending up 2% for the quarter.
Alongside its earnings release, Cato provided its outlook for the fourth quarter and fiscal 2015. Management expects fourth-quarter earnings to lie at the low end of its previously announced range of 35–39 cents per share, while earnings for the fiscal are envisioned in a band of $2.31–$2.35 per share, reflecting a year-over-year improvement of 7%–9%.
This guidance reflects the aforementioned headwinds, which kept management conservative. Apart from Cato, other retailers too posted their comps data for Nov 2015. While Rite Aid Corporation RAD witnessed 0.9% comps growth, retailers like Gap, Inc. GPS and Zumiez, Inc. ZUMZ, recorded comps decline of 8% and 13.8%, respectively.
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