For the year, earnings per diluted share are expected to be in the range of $1.60 to $1.64 versus $1.41 last year, an increase of 13% to 16%. Its guidance does not account for proceeds from insurance claims related to last year's hurricanes, which are uncertain at this time.
The company's fourth quarter includes 14 weeks compared to 13 weeks in 2005 and the fiscal year includes 53 weeks compared to 52 weeks in 2005. The additional week is expected to have a positive earnings effect of approx. $.05 per diluted share. Earnings guidance both for the fourth quarter and year reflects this impact.
Due to delays in its store development process, the company now expects to open approx. 60 stores during 2006 as compared to its original estimate of 90 new stores for the year. Additionally, it is now estimating approx. 15 store closings during 2006 as compared to its original estimate of 10 closings.
Cato said, "We remain committed to our strategy of expanding through new store growth. In 2007, we anticipate returning to a more normalized pace of 80 to 100 new store openings. The effect of the reduced number of 2006 store openings and the additional week in 2006 will make 2007 a more challenging year for earnings growth."
The Cato Corporation is a leading specialty retailer of value-priced women's fashion apparel operating two divisions, 'Cato' and 'It's Fashion!'.
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