Cato(US:CATO)2024-11-26 16:00Sales Performance - Total retail sales for Q3 2024 were $144.6 million, an 8% decrease from $156.7 million in Q3 2023[88] - For the nine months ended November 2, 2024, total retail sales were $486.8 million, down 8% from $528.2 million in the same period last year[89] - Same-store sales decreased by 3% in Q3 2024 and 4% for the first nine months of fiscal 2024[89] Cost and Expenses - Cost of goods sold was $103.0 million, or 71.2% of retail sales for Q3 2024, compared to $105.8 million, or 67.5% for Q3 2023[92] - Gross margin dollars decreased by 18.1% to $41.7 million for Q3 2024, and by 11.1% to $162.3 million for the first nine months of fiscal 2024[92] - SG&A expenses were $57.9 million, or 40.0% of retail sales for Q3 2024, compared to $61.8 million, or 39.4% for Q3 2023[93] Store Operations - The company operated 1,167 stores as of November 2, 2024, down from 1,245 stores on October 28, 2023[89] - The company expects to close approximately 65 stores in total during fiscal 2024[89] Revenue and Income - Credit revenue for Q3 2024 was $0.7 million, representing 0.5% of total revenues, unchanged from the previous year[90] - Interest and other income for the three months ended November 2, 2024, was $2.6 million, or 1.8% of retail sales, compared to $1.5 million, or 1.0% of retail sales for the same period in fiscal 2023[96] Tax and Cash Flow - Income tax expense for the first nine months of fiscal 2024 was $1.6 million, compared to a tax benefit of $0.8 million for the same period in fiscal 2023, resulting in an effective income tax rate of (67.5%) compared to 60.4% in fiscal 2023[97] - Cash used in operating activities during the first nine months of fiscal 2024 was $13.3 million, an increase of $25.0 million compared to $11.7 million provided in the same period of fiscal 2023[99] Working Capital and Financing - Working capital increased to $60.7 million at November 2, 2024, from $55.1 million at February 3, 2024, primarily due to a decrease in current lease liability and an increase in inventory[100] - The Company had a revolving credit agreement allowing borrowings of up to $35.0 million, with no outstanding borrowings as of November 2, 2024[101] Capital Expenditures and Cash Flow from Investments - Expenditures for property and equipment totaled $6.5 million in the first nine months of fiscal 2024, down from $10.3 million in the same period of the previous year[103] - Net cash provided by investing activities was $21.5 million in the first nine months of fiscal 2024, compared to $6.1 million in the same period of fiscal 2023[104] - Net cash used in financing activities totaled $12.6 million in the first nine months of fiscal 2024, slightly down from $12.7 million in the comparable period of fiscal 2023[105] Investment Portfolio - The Company's investment portfolio primarily consists of corporate bonds and U.S. Treasury/Agencies notes and bonds, with underlying ratings of A or better[107] - Deferred compensation plan assets increased to $9.1 million at November 2, 2024, from $8.6 million at February 3, 2024[108] Economic Factors - Inflationary pressures and high interest rates have negatively impacted customer disposable income and purchasing behavior[85]