Friday, July 19, 2024

Cato shares trading at 27-year low

Shares of Charlotte-based clothing retailer Cato traded at the lowest levels since 1997 after the company reported a $23.4 million loss for the fourth quarter amid declining revenue.

The company, founded in 1946, reported a loss of $23.9 million for the year, compared with a minimal profit of $29,000 in 2022. Total revenue dipped nearly 7% to $708 million in 2023.

Same-store sales, a key barometer of a retailer’s health because they track sales of stores open at least a year, fell 5% in the fourth quarter. Cato’s shares have declined more than 70% in the last decade as it has struggled to compete against newer clothing retailers such as H&M.

“Our fiscal 2023 sales trend was negatively impacted by pressure on our customers’ discretionary spending levels primarily due to higher interest rates and inflation,” said CEO John Cato in a release.

Cato’s shares closed Friday at $5.64, down 21% this year and 32% over the past 52 weeks. John Cato controls 51.7% of the company’s voting power, according to the 2023 proxy statement.

Cato said that selling, general and administrative expenses increased to 36.1% of sales compared to 32.3% in the prior year. The selling, general and administrative rate increase was primarily due to higher payroll costs, insurance and closed store expenses.

During 2023, the company opened seven stores, relocated two stores and permanently closed 109 stores. As of Feb. 3, the company operated 1,178 stores in 31 states. Cato plans to open as many as 15 new stores and close up to 75 underperforming stores as leases expire this year.

Chris Roush
Chris Roush
Chris Roush is executive editor of Business North Carolina. He can be reached at

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