John Cato, president, vice chairman and ceo of The Cato Corp. (Charlotte, N.C.), told shareholders that he expected 15 percent annual earnings growth with a $31 million capital-expenditures program that will open new stores and expand into a number of new territories.
“By accelerating our store growth, delivering consistent comp store sales increases, maintaining a disciplined approach to expense and inventory management and leveraging our corporate overhead, we are confident that, over the long term, we can continue delivering annual earnings growth averaging 15 percent,” Cato said.
Through a store remodel and relocation program, over 250 stores have been updated in the past two years. In 2001, the retailer said it plans to spend $31 million on capital expenditures. This includes $14 million for new, relocated and remodeled stores, and $12 million for additional investments in technology.
“Our strategy of offering mall specialty store fashion and quality at low prices every day works in many areas of the country — in rural, middle and metro markets,” Cato said. “We have many opportunities for additional markets and store locations in both existing and adjacent states. We plan to open 85 new stores this year and 90 to 120 stores per year for the next several years as we move toward becoming a national chain.”
Cato said the company's expansion plans focus on three main geographic strategies: growing within proven geography, with an increased emphasis on Texas and Florida; continuing its expansion into New Jersey and Pennsylvania, and into other states adjacent to existing markets, such as New Mexico; and testing new markets, including southeast Florida, the Philadelphia metropolitan area and the Texas/ Mexico border.
Cato Corp., a specialty retailer of value-priced women's private label apparel, currently operates 872 stores in 23 states.