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Cato sees 22% plunge in profits as its expenses rise

Charlotte-based apparel retailer Cato Corp. reported Thursday that its profit fell 22 percent in the fourth quarter, as a slight rise in sales was outpaced by higher expenses.

“Cato faced a very difficult year in 2012,” said CEO John Cato, in a statement. “The already weak economic environment was further impacted by political uncertainty, tax changes and higher costs that negatively impacted our customer.”

For the fourth quarter, profits at Cato fell to $7.9 million. The company’s revenue increased 4.6 percent from the same quarter a year ago, to $234 million, but expenses increased 6 percent. And on a comparable basis of 14 weeks, adjusted for a different quarter length last year, Cato’s total sales fell 4 percent. Sales at stores open for a year or more – considered a key indicator of a retailer’s health – fell 7 percent.

Cato’s sales increased 1 percent for the full year, to $934 million, but profits fell 5 percent, to $61.7 million.

Cato, headquartered off South Boulevard near I-485, operates 1,310 stores in 31 states, including Cato, Versona, and It’s Fashion stores.

Portillo: 704-358-5041 On Twitter @ESPortillo
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