CHARLOTTE, N.C., May 21, 2014 /PRNewswire/ -- The Cato Corporation (NYSE: CATO) held its Annual Shareholders' Meeting on Tuesday, May 20, 2014 at its corporate offices in Charlotte, NC.
John Cato, Chairman, President, and Chief Executive Officer, commented on the Company's performance in 2013, the fourth best year in its history. However, due to the difficult economic times in 2013, the Company saw both net income and earnings per diluted share decline 12% from the prior year. We opened 32 new stores which was less than planned due to the continued lack of shopping center development. However, in late 2013 we have seen improvement in shopping center development which should help us increase our store growth in 2014. In March 2013, we increased our dividend by 20% reflecting our strong earnings. Finally, we remain debt free with over $240 million in cash.
Mr. Cato noted that many of Cato's customers are still feeling the effects of higher costs of living and slow job growth which reduces our customers' discretionary income. We believe the impact of these financial burdens on our customer will result in another challenging year in 2014.
In discussing growth plans for 2014, the Company expects to open 64 new stores for the year including 30 Cato, 24 Versona Accessories, and 10 It's Fashion stores.
Mr. Cato also discussed major initiatives the Company is making to allocate resources better and become more productive and efficient. At the Cato concept, we are improving our fashion trend and timing all at the same great value everyday. We will continue to push our direct sourcing which has been critical to our success. We are reemphasizing the value pricing message to our customers and adding more talent throughout the merchandising organization. In November 2013, we launched our Cato e-commerce website. We have kept all functions in-house including a new photography studio, fulfillment center and call center. We are projecting the website to be profitable in 2014.
The It's Fashion concept will complete its transition to fast fashion from brands and continue testing our new larger specialty store format focusing only on women's apparel and accessories. Like Cato, we are reemphasizing the value pricing message to our customers. The Versona concept is continuing to refine its product by offering unique fashion merchandise at a great quality and value while continuing our great overall customer experience. Versona is adding merchandise talent at both management and buyer levels. We are also strengthening our Versona store organization with another layer of management to handle our accelerated growth.
Corporately, we are adding in-house design expertise for more exclusive, on-trend fashion and in-house fabric and product integrity expertise to streamline the production approval process and improve our fabric quality and consistency. We are beginning the transition to our own overseas buying offices. All of these changes will reduce the merchandise delivery cycle between production and the sales floor. We are increasing new store development with the help of increased shopping center activity and continuing to test our new store formats and real estate strategies. To do this, we are adding to and upgrading the real estate and store development organization. Finally, we are building our Versona e-commerce website for an early 2015 launch and improving our data security to protect our customers and associates.
Mr. Cato emphasized our three core strategies. First, our continued focus on our customer through compelling fashion at outstanding values and an engaging shopping experience. Second, providing our associates opportunities to grow. And third, returning value to our shareholders through profitable growth.
In a meeting of the Board of Directors prior to the Annual Meeting, the Board declared a regular quarterly dividend of $0.30 per share. The $0.30 dividend, or $1.20 on an annualized basis, represents an annualized yield of 3.9%. In addition, we have repurchased over 1.4 million shares of Cato stock in the first quarter of 2014. The Board also approved a new authorization to purchase an additional 2 million shares. This further shows our commitment to returning value to our long-term shareholders.
Finally, Mr. Cato stated "By staying true to our strategies, by investing our capital wisely and by delivering value to our customers, we will continue to deliver profitable growth."
During the Annual Meeting, shareholders re-elected Thomas B. Henson and Bryan F. Kennedy, III to three-year terms ending in 2017. Shareholders also approved, on an advisory basis, the Company's Executive Compensation plan, and ratified the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for fiscal 2014.
The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories operating three concepts, "Cato", "Versona" and "It's Fashion". The Company's Cato stores offer exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices every day. The Company also offers exclusive merchandise found in its Cato stores at www.catofashions.com. Versona is a unique fashion destination offering accessories and apparel including jewelry, handbags and shoes at exceptional prices every day. It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day. Additional information on The Cato Corporation is available at www.catocorp.com.
Statements in this press release not historical in nature including, without limitation, statements regarding the Company's expected or estimated financial results, including the Company's dividend, possible share repurchases and expected store openings, are considered "forward-looking" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but are not limited to, the following: general economic conditions; competitive factors and pricing pressures; the Company's ability to predict fashion trends; consumer apparel buying patterns; adverse weather conditions and inventory risks due to shifts in market demand and other factors discussed under "Risk Factors" in Part I, Item 1A of the Company's most recently filed annual report on Form 10-K, as amended or supplemented, and in other reports the Company files with or furnishes to the SEC from time to time. The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press release by wire or Internet services.
SOURCE Cato Corporation