CHARLOTTE, N.C., May 20, 2016 /PRNewswire/ -- The Cato Corporation (NYSE: CATO) held its Annual Shareholders' Meeting on Thursday, May 19, 2016 at its corporate offices in Charlotte, NC.
John Cato, Chairman, President, and Chief Executive Officer, commented on the Company's performance in 2015. The Company reported an increase in net income of 10% to $66.8 million and diluted earnings per share increased 11% to $2.39 over the prior year, both the highest in the Company's history. Mr. Cato also highlighted that the Company achieved over $1 billion in sales for the first time in the Company's history. In addition, through dividend payout and share repurchase, Cato returned nearly $40 million to shareholders in 2015 and still remains a debt free company with over $280 million in cash.
Mr. Cato reviewed a few areas of business for Cato in 2015. The Company continued to make great progress with its sourcing and design initiatives, with key offices open in Hong Kong and Shanghai, and smaller offices and personnel in China, Vietnam and Indonesia. The Company began receiving its first product receipts from the overseas sourcing offices and is accelerating direct sourcing in 2016. The Company's design initiative also began to make an impact with a focus on creating unique, exclusive, and on trend product allowing the Cato customer to build a head to toe outfit.
The Company opened 31 stores in 2015 and is finding new store development challenging due to the lack of new shopping center development, as well as, increased competition and rents for good retail space.
Mr. Cato was also pleased to report the successful launch of the Versona eCommerce site in quarter one of 2015. Similar to the Cato eCommerce site, the customer has the ability to purchase merchandise unavailable in stores and locate other styles, sizes and colors in nearby stores, and has the option to conveniently ship or return merchandise to a store without a charge.
In looking forward to 2016, Mr. Cato emphasized the Company would remain focused on integrating the design and trend departments. In addition, the Company would continue to invest efforts to build the Cato brand by focusing on fits, fabrics, prints and products while continuing to provide personal service in an easy to shop store layout.
Cato has begun several new merchandise initiatives including improved fit and fabrics, and beginning in the fall of 2016, will begin holding back a portion of core fashion items for store replenishment. Also beginning in the fall of 2016, Cato will launch an exciting denim program with enhanced product and in-store shopping experience.
From a corporate perspective, Mr. Cato reported that the Company continues to upgrade internal merchandising systems and improving data security to better protect Cato customers and associates. He also announced the completion of the Corporate office expansion and remodel.
In summary, Mr. Cato stated, "We delivered outstanding results and we are working hard to continue this success. The Company remains committed to growing its overall business by driving same-store sales profitably, growing eCommerce and continuing new store development. Of course, there are still plenty of headwinds. The women's fashion business is a highly competitive and volatile market. Research shows that the customer is spending more on large purchases, such as automobile and home improvements, as well as focusing her discretionary spending on non-apparel items."
In a meeting of the Board of Directors prior to the Annual Meeting, the Board increased the Company's quarterly dividend 10% to $0.33 per share. This dividend equates to a dividend of $1.32 on an annualized basis, and represents an annualized yield of 3.8% based on the closing market price of $34.80 on May 18, 2016.
During the Annual Meeting, shareholders re-elected D. Harding Stowe and Edward I. Weisiger, Jr. each for a term expiring in 2019. Shareholders also ratified the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the fiscal year ending January 28, 2017.
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 apparel and accessories including jewelry, handbags and shoes at exceptional prices every day. Select Versona merchandise can also be found at www.shopversona.com. 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 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 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.
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SOURCE The Cato Corporation