Cato’s revenue declines amid weaker consumer spending

(Source: Cato Fashion / Facebook)

Fashion retailer Cato’s revenue declined and its net loss widened in the third quarter due to weaker consumer spending.

Revenue declined 10.4 per cent year over year to $158.3 million as same-store sales fell 8 per cent. Net loss worsened to $6.1 million. 

Charlotte-headquartered Cato operates 1372 stores under the Cato, Cato Plus, It’s Fashion, It’s Fashion Metro and Versona brands.

“Our year-to-date sales trend continues to be negatively impacted by declining spending on goods versus services, as well as our customers’ discretionary spending levels,” said John Cato, chairman, president and CEO.

“Our gross margin rate continues to improve compared to 2022, as we continue to focus on controlling our inventory in this difficult economic environment. However, given the current economic conditions, we believe that the fourth quarter will remain challenging.”

Gross margin increased to 32.5 per cent of sales, attributed to higher merchandise margins, partially offset by increased freight and occupancy costs.

For the first nine months, revenue fell 8.1 per cent to $533.2 million. The company swung to a net loss of $523,000 from a net income a year ago.

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