The Cato Corporation reported net income of $12.5 million or $.39 per diluted share for the second quarter ended August 4, 2007, compared to net income of $12.1 million or $.38 per diluted share for the second quarter ended July 29, 2006.
Both net income and earnings per diluted share increased 3% over last year. Sales for the second quarter were $219.0 million, a 2% increase over sales of $214.6 million last year. Second quarter comparable store sales decreased 1%.
For the six months ended August 4, 2007, the Company earned net income of $31.2 million or $.97 per diluted share, compared with net income of $32.9 million or $1.04 per diluted share for the six months ended July 29, 2006, a decrease in net income of 5% and a decrease in earnings per diluted share of 7%.
Sales for the first half were $443.1 million, flat compared to the prior year's first half sales of $444.4 million. Comparable store sales for the first half decreased 3% from first half 2006.
"Our results through the first half reflect the challenging apparel retail environment," said John Cato, Chairman, President, and Chief Executive Officer. "Sell-throughs of regular priced goods have been below last year and, when coupled with higher markdowns, are the primary reason for the decrease in gross margin. Our inventory is in line with sales as we begin the third quarter."
The Company's income from operations was in line with previous guidance. Second quarter results were $.02 above the Company's estimate due primarily to an effective tax rate lower than anticipated due to volatility between quarters and higher tax credits.