Cato & Ross Stores grow confident in 2012

Cato estimates same-store sales for 2012 will be in a range of down 2% to flat and its gross margin rate will decrease to 37.1% from 37.6% in 2011, resulting in net income in a range of $61.3 million to $65.9 million, a 5% decrease to a 2% increase compared to $64.8 million in 2011.

Consequently, the group estimates earnings per diluted share will be in a range of $2.10 to $2.25, a 5% decrease to a 2% increase compared to $2.21 in 2011.

The Company estimates first quarter 2012 net income to be in a range of $30.2 million to $31.9 million, or $1.04 to $1.09 per diluted share, flat to a 5% increase compared to $1.04 in first quarter 2011. This estimate is based on same-store sales of down 3% to flat.

In the same vein, the American retailer foresees capital expenditures to be approximately $59 million, including $27 million for store development and $29 million for home office and distribution center expansion. Depreciation is expected to be approximately $23 million for the year. The effective tax rate is expected to be approximately 36.6%.

Also in Wall Street, Ross Stores (ROST) said Thursday it generated an in-line 19% jump in fourth-quarter profits, reported Fox Business News.

“Our healthy revenue growth continues to be driven mainly by our ability to deliver compelling bargains on a wide assortment of exciting name brand fashions for the family and the home to today's increasingly value-focused consumers,” CEO Michael Balmuth said in a statement released on Thursday.

The Californian earned $192 million, or 85 cents a share, last quarter, compared with a profit of $161.8 million, or 69 cents a share, the same quarter a year earlier. Analysts forecasted an EPS of 85 cents, while Ross Stores projected 84 cents to 85 cents.

However, the company said sales gained 12% to $2.4 billion, matching the market’s view of $2.39 billion. Balmuth also projected a “respectable increase” in revenue and EPS in 2012 “and beyond.”

Shares of Ross Stores, which have leaped almost 20% so far this year, slipped 0.34% to $56.38 ahead of the open.