Cato Fashions reports widening Q4 losses

US fashion retailer Cato Fashions has reported widening losses for the fourth quarter as it swung to a full-year loss.

For the three months to January 30, 2021, the company’s net losses more than doubled to 6.9 million dollars compared to 3.2 million dollars a year earlier.

That came as sales in the quarter dropped 19 percent to 188.4 million dollars, while same-store sales fell 20 percent.

For the full year, net losses widened to 46.1 million dollars compared to income of 35.9 million dollars in 2019.

Sales in the year decreased 30 percent to 567.5 million dollars, while same-store sales decreased 32 percent.

“We began 2020 with a focus on growing the business,” said the company’s chairman, president and CEO, John Cato, in a statement. “As a result of the Covid-19 pandemic, our focus quickly shifted to protecting the business.”

The North Carolina-based company said its gross margin in 2020 decreased to 23.7 percent of sales from 37.6 percent of sales in 2019, citing a reduction in merchandise contribution combined with the effects of deleveraging occupancy and buying expenses.

Cato said: “2020 was a challenging year for speciality apparel retail. We made some difficult decisions in an effort to sustain our business in the wake of the pandemic.

“Despite the challenges of the Covid-19 pandemic, Cato continues to maintain a strong balance sheet, with 143.9 million dollars in unrestricted cash and short-term investments and no debt.”

As of January 30, 2021, the company operated 1,330 stores in 33 states.

Image: Cato Fashions, Facebook