Cato(CATO) - 2022 Q1 - Quarterly Report

Financial Performance - Total retail sales for the first quarter of fiscal 2021 were $211.2 million, a 111.0% increase compared to $98.8 million in the first quarter of fiscal 2020[95] - Cost of goods sold was $123.7 million, or 58.5% of retail sales, down from $83.6 million, or 84.6% of retail sales in the first quarter of fiscal 2020[99] - Gross margin increased by 475.4% to $87.6 million for the first quarter of fiscal 2021 compared to $15.2 million in the first quarter of fiscal 2020[99] - Net income for the first quarter of fiscal 2021 was $20.7 million, compared to a net loss of $28.4 million in the first quarter of fiscal 2020[90] Expenses and Costs - Selling, general and administrative expenses (SG&A) were 29.9% of retail sales for the first quarter of fiscal 2021, down from 53.1% in the first quarter of fiscal 2020[100] - The effective income tax rate for the first quarter of fiscal 2021 was 12.9%, compared to a benefit of 24.3% in the first quarter of fiscal 2020[104] Store Operations - The Company operated 1,325 stores at May 1, 2021, compared to 1,300 stores at the end of the first quarter of fiscal 2020[96] - The Company expects to close approximately 25 stores in fiscal 2021[96] Cash Flow and Working Capital - Cash provided by operating activities for the first three months of fiscal 2021 increased by $115.8 million compared to the first three months of fiscal 2020, primarily due to net income versus a net loss[106] - Working capital increased to $130.5 million at May 1, 2021, compared to $108.6 million at January 30, 2021[107] Capital Expenditures and Investments - Capital expenditures totaled $0.6 million in the first three months of fiscal 2021, down from $5.3 million in the same period last year, with an expected total of approximately $3.1 million for the full fiscal year[109] - Net cash used by investing activities was $34.2 million in the first three months of fiscal 2021, compared to $76.9 million provided in the same period of fiscal 2020, primarily due to a decrease in the sale of short-term investments[110] Financing Activities - Net cash used by financing activities totaled $5.5 million in the first three months of fiscal 2021, down from $12.4 million in the comparable period of fiscal 2020, mainly due to a decrease in proceeds from the line of credit[111] Shareholder Returns - The Board of Directors declared a quarterly dividend of $0.11 per share on May 20, 2021[112] - As of May 1, 2021, the company had 1,445,488 shares remaining in open authorizations under its share repurchase program[114] Investment Portfolio - The investment portfolio was primarily in corporate bonds and government debt securities with underlying ratings of A or better, with maturities ranging from 4 days to 4.5 years for corporate bonds[116] - At May 1, 2021, the company held $0.8 million in corporate equities and $11.6 million in deferred compensation plan assets[117] - The company does not believe its exposure to market rate risk from interest rate changes is material[120]