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Cato Corp. Reports Operating Results (10-Q)

June 06, 2012 | About:
10qk

10qk

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Cato Corp. (CATO) filed Quarterly Report for the period ended 2012-04-28.

Cato Corp A has a market cap of $756.8 million; its shares were traded at around $29.15 with a P/E ratio of 12.2 and P/S ratio of 0.8. The dividend yield of Cato Corp A stocks is 3.3%. Cato Corp A had an annual average earning growth of 5.4% over the past 10 years. GuruFocus rated Cato Corp A the business predictability rank of 3.5-star.

Highlight of Business Operations:

Selling, general and administrative expenses (“SG&A”) primarily include corporate and store payroll, related payroll taxes and benefits, insurance, supplies, advertising, bank and credit card processing fees and bad debts. SG&A expenses were $61.4 million, or 22.5% of retail sales for the first quarter of fiscal 2012, compared to $63.3 million, or 23.4% of retail sales in the first quarter of fiscal 2011. SG&A expenses as a percentage of retail sales decreased 90 basis points for the first quarter of fiscal 2012 as compared to the prior year. The decrease was primarily attributable to lower incentive-based compensation expenses, partially offset by higher group health insurance costs.

Depreciation expense was $5.8 million, or 2.1% of retail sales for the first quarter of fiscal 2012, compared to $5.4 million, or 2.0% of retail sales for the first quarter of fiscal 2011. The slight increase in depreciation expense was due to store development and information technology investments.

Interest and other income was $0.9 million, or 0.3% of retail sales for the first quarter of fiscal 2012, compared to $1.0 million, or 0.4% of retail sales for the first quarter of fiscal 2011. The slight decrease was due to higher sales tax vendor income, as well as, label income in the first fiscal quarter of 2011.

Income tax expense was $19.6 million or 7.2% of retail sales for the first quarter of fiscal 2012, compared to $17.0 million, or 6.3% of retail sales for the first quarter of fiscal 2011. The first quarter increase resulted from higher pre-tax income and a higher effective tax rate. The effective income tax rate for the first quarter of fiscal 2012 was 38.2% compared to 35.7% for the first quarter of 2011. The current year quarter was impacted by the elimination of the benefit of the Work Opportunity Tax Credit which has not been renewed for 2012 by Congress as of April 28, 2012.

Cash provided by operating activities for the first three months of fiscal 2012 was primarily generated by earnings adjusted for depreciation and changes in working capital. The increase of $15.0 million for the first three months of fiscal 2012 as compared to the first three months of fiscal 2011 was primarily due to an increase in net income, a reduction in inventories partially offset by a decrease in accounts payable and accrued expenses.

Read the The complete Report

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10qk
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