CATO 8-K
Cato Corp (CATO)
8-K
2023-05-22
For: 2023-05-18
View Original
Added on
April 11, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street NW
Washington, D.C. 29549
Form
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction
of Incorporation
(Commission
File Number)
(IRS Employer
Identification No.)
,
,
(Address of Principal Executive Offices)
(Zip Code)
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities
Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
2
THE CATO CORPORATION
Item 2.02. Results of Operations and Financial Condition
On May 18, 2023, The Cato Corporation issued a press release regarding its financial results for the first quarter
ending May 29, 2023. A copy of this press release is hereby incorporated as Exhibit 99.1 hereto.
Item 5.07. Submission of Matters to a Vote of Security Holders.
On May 18, 2023, the Registrant held its Annual Meeting. The following are the voting results on each matter
submitted to the Registrant’s stockholders at the Annual Meeting. The proposals below are described in detail in the
Proxy Statement.
At the Annual Meeting, the three nominees for director were elected to the Registrant’s Board of Directors (Proposal
1 below).
In addition, management’s proposal regarding the Company’s executive compensation was approved (Proposal 2
below).
In addition, to hold an advisory (non-binding) vote on how often a shareholder vote on “say on pay” is held every
one year, two years or three years.
In addition, management’s proposal regarding the selection of PricewaterhouseCoopers LLP as the Company’s
independent registered public accounting firm for the fiscal year ending January 28, 2023 was approved (Proposal 3
below).
Summary of Voting By Proposal
1. To elect Dr. Pamela L. Davies, Thomas B. Henson and Bryan F. Kennedy, each for a term expiring in 2026 and
until their successors are elected and qualified. Votes recorded, by nominee, were as follows:
Nominee
For
Abstain
Broker
Non-Votes
Dr. Pamela L Davies
23,657,559
5,244,500
5,014,557
Thomas B. Henson
25,137,017
3,765,042
5,014,557
Bryan F. Kennedy
23,247,410
5,654,649
5,014,557
2. To approve, on an advisory basis, the Company’s executive compensation. The Company’s shareholders voted
to approve this proposal with 22,466,145 for and 6,346,566 votes against. There were 89,348 abstentions and
5,014,557 Broker non-votes.
3. In addition, to hold an advisory (non-binding) vote on how often a shareholder vote on “say on pay” is held
every one year, two years or three years. The Company’s shareholders voted: 7,280,231 for every one year,
66,409 for every two years, and 22,466,145for every three years. There were 66,887 abstentions and 5,014,557
Broker non-votes.
In light of the voting results with respect to the frequency of advisory votes on executive compensation, the
Company’s board of directors has determined that the Company currently intends to hold an advisory vote on
the compensation of our named executive officers every three years until the next required vote on the
frequency of advisory votes on executive compensation.
4. To approve, to ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered
public accounting firm for the fiscal year ending February 3, 2024. The Company’s shareholders voted to
approve this proposal with 33,653,005 for and 102,207 votes against. There were 161,404 abstentions.
3
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 104 – Cover Page Interactive Data File (embedded within Inline XBRL document)
4
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
May 22, 2023
/s/ John P. D. Cato
Date
John P. D. Cato
Chairman, President and
Chief Executive Officer
May 22, 2023
/s/ Charles D. Knight
Date
Charles D. Knight
Executive Vice President
Chief Financial Officer
5
Exhibit Index
Exhibit
Exhibit
No.
99.1
104 Cover page Interactive Data File (embedded within Inline
XBRL document)
104
EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
For Further Information Contact:
CATO REPORTS 1Q EARNINGS
CHARLOTTE, N.C. (May 18, 2023) – The Cato Corporation (NYSE: CATO) today reported net income of $4.4 million
or $0.22 per diluted share for the first quarter ended April 29, 2023, compared to net income of $9.7 million or $0.46 per
diluted share for the first quarter ended April 30, 2022.
Sales for the first quarter ended April 29, 2023 were $190.3 million, or a decrease of 7% from sales of $204.9 million for
the first quarter ended April 30, 2022. The Company’s same-store sales for the quarter decreased 6% compared to the
same period in 2022.
"Our customer continues to feel the strain of higher interest rates and inflation on their discretionary income, which has
negatively impacted our sales for the first quarter,” said John Cato, Chairman, President and Chief Executive Officer.
“We
are finally experiencing sustained relief from previous supply chain challenges, but the continued volatility in the
economy causes us to remain cautious about the remainder of the year
.
”
First-quarter gross margin as a percentage of sales increased from 35.5% in 2022 to 35.8% in 2023.
The improved
merchandise margin was driven by reduced markdowns attributable to on-time merchandise shipments, coupled with
lower freight and distribution costs. Selling, General and Administrative expenses as a percent of sales increased from
29.5% to 32.5% of sales during the quarter due to increased operating expenses, including higher wages, combined with
the effects of deleveraging resulting from sales decline, when compared to the prior year.
Income tax expense for the
quarter was $2.1 million compare
d to $1.9 million last year.
During the first quarter ended April 29, 2023, the Company opened 4 stores and permanently closed 20 stores. As of
April 29, 2023, the Company operated 1,264 stores in 32 states, compared to 1,315 stores in 32 states as of April 30, 2022.
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 that express a belief, expectation or intention, as well as those that are not a historical
fact,
results, activities or opportunities, and potential impacts and effects of the coronavirus 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, any actual or perceived deterioration in the conditions that drive consumer confidence and spending,
including, but not limited to, prevailing social, economic, political and public health conditions and uncertainties, levels
of unemployment, fuel, energy and food costs, wage rates, tax rates, interest rates, home values, consumer net worth and
the availability of credit; changes in laws or regulations affecting our business including but not limited to tariffs;
uncertainties regarding the impact of any governmental action regarding, or responses to, the foregoing conditions;
competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and
consumer demands; our ability to successfully implement our new store development strategy to increase new store
openings and the ability of any such new stores to grow and perform as expected; adverse weather, public health threats
(including the global coronavirus (COVID-19) outbreak) 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
* * *
THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED April 29, 2023 AND April 30, 2022
(Dollars in thousands, except per share data)
Quarter Ended
%
%
April 29, 2023
Sales
April 30, 2022
Sales
REVENUES
$
190,311
100.0%
$
204,933
100.0%
1,739
0.9%
1,788
0.9%
192,050
100.9%
206,721
100.9%
GROSS MARGIN (Memo)
68,224
35.8%
72,690
35.5%
COSTS AND EXPENSES, NET
122,087
64.2%
132,243
64.5%
61,934
32.5%
60,441
29.5%
2,357
1.2%
2,743
1.3%
(897)
-0.5%
(403)
-0.2%
185,481
97.5%
195,024
95.2%
Income Before Income Taxes
6,569
3.5%
11,697
5.7%
Income Tax Expense
2,141
1.1%
1,949
1.0%
Net Income
$
4,428
2.3%
$
9,748
4.8%
Basic Earnings Per Share
$
0.22
$
0.46
Diluted Earnings Per Share
$
0.22
$
0.46
THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
April 29, 2023
January 28, 2022
(Unau
dited)
(Unaud
ited)
ASSETS
Current Assets
$
38,103
$
20,005
87,750
108,652
3,826
3,787
29,731
26,497
106,813
112,056
7,298
6,676
273,521
277,673
Total Current Assets
Property and Equipment - net
74,187
70,382
Noncurrent Deferred Income Taxes
9,938
9,213
Other Assets
21,478
21,596
Right-of-Use Assets, net
155,512
174,276
$
534,636
$
553,140
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
$
135,934
$
135,597
Current Lease Liability
49,707
67,360
Noncurrent Liabilities
16,449
16,183
Lease Liability
105,765
107,407
Stockholders' Equity
226,781
226,593
$
534,636
$
553,140