Cato 2018 Annual Meeting Highlights

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May 24, 2018, 05:37 ET

CHARLOTTE, N.C., May 24, 2018 /PRNewswire/ -- The Cato Corporation (NYSE: CATO) held its Annual Shareholders' Meeting on Thursday, May 24, 2018 at its corporate offices in Charlotte, N.C.

John Cato, Chairman, President, and Chief Executive Officer, opened the meeting by welcoming the shareholders. The Inspector of Election reported that (1) the shareholders re-elected John Cato, Thomas Meckley and Bailey Patrick, each for a 3-year term expiring in 2021; (2) in a non-binding advisory vote, the shareholders approved the Company's executive compensation; (3) the shareholders approved The Cato Corporation 2018 Incentive Compensation Plan; and (4) the shareholders ratified the appointment of PricewaterhouseCoopers LLP as the Company's independent auditors for 2018. There being no further business before the meeting, the meeting was adjourned.

Following the meeting, Mr. Cato addressed the shareholders. He began by introducing the Company's Board of Directors, including the newest Board member, Dr. Pamela Davies. After thanking Cato's associates and shareholders, he noted that 2017 was a difficult year for the company. Mr. Cato went on to highlight a few of the company's 2017 initiatives, including adjusting the merchandising strategy to better align with what the customer wants. He noted that the buyers and in-house designers worked to get the merchandise mix right and returned to the fits that Cato customers have always loved, and also worked closely with key outside partners to get additional insights and product. Mr. Cato stated that eCommerce has been a focus for the company and has experienced significant increases in sales. Mr. Cato indicated that these initiatives will play a key role in The Company's future success.

Mr. Cato stated that the company has continued investing in systems and infrastructure, including implementing the Oracle Retail Merchandising System (Retek). This system will help streamline functions to create needed efficiencies in buying, design and sourcing.

Mr. Cato discussed some other company initiatives such as reducing overhead to better align the cost structure to our sales trend, aggressively renegotiating real estate leases, shortening the product development cycle, and enhancing sales and customer service training for store associates.

Mr. Cato stated the Company again was profitable in 2017 even in a difficult year, and noted that Cato's balance sheet remains strong with over $200 million in cash and no debt.

"As everyone is aware, we have faced a variety of challenges over the last several years, as most retailers have," Mr. Cato said. "In 2017, we saw major brands closing thousands of stores, and several companies have filed for bankruptcy. Experts predict this trend will continue. However, Cato has taken steps to ensure we not only survive, but thrive in this new environment."

Turning to the 1^st quarter of 2018, Mr. Cato stated that the company is starting to see more favorable sales trends. Same-store sales for the March and April combined increased 1% over the same period last year and the company is optimistic about its ability to build on this momentum going forward.

Cato, as part of a joint venture with Lincoln Harris, announced the first project for its 350-acre mixed-use commercial development called Southbridge at the site of the former Charlotte Knights Stadium in Fort Mill, South Carolina. A 150,000-square-foot corporate headquarters for Roundpoint Mortgage Servicing Corporation will be the first of many construction projects on the site. This will have a positive impact on Cato's bottom line in the future.

Mr. Cato indicated that the overall strategy at Cato remains sound. "We are committed to growing our business by driving same-store sales profitably, growing our e-commerce and opening stores opportunistically," stated Mr. Cato. "Cato will achieve this growth by being the fashion authority for on-trend merchandise at everyday low prices, by building the Cato brand through excellence in our fit, fabrics, quality and selection, and by providing great customer service in stores and online."

Mr. Cato also reiterated the Company's commitment to its shareholders. In 2017, Cato returned more than $73 million in value to shareholders through quarterly dividends of $34 million and share repurchases of $39 million. The Company also maintained its quarterly dividend of $0.33 per share, or $1.32 annually.

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.

Statements in this press release not historical in nature including, without limitation, statements regarding the Company's expected or estimated operational and 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: any actual or perceived deterioration in the conditions that drive consumer confidence and spending, including, but not limited to, levels of unemployment, fuel, energy and food costs, wage rates, tax rates, home values, consumer net worth and the availability of credit; uncertainties regarding the impact of any governmental responses to the foregoing conditions; competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and consumer demands; adverse weather or similar conditions that may affect our sales or operations; inventory risks due to shifts in market demand, including the ability to liquidate excess inventory at anticipated margins; 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.

SOURCE The Cato Corporation