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What: Shares of value-fashion retailer Cato Corp.
So what: It's pretty clear why many investors are giving Cato shares the heave-ho. Earlier today, the company announced disappointing results for the month of June, and cautioned investors that second-quarter results will be on the soft side.
For the five weeks ending June 30, sales slid 7% from last year, to $83.7 million. Over the same stretch, same-store sales fell 10%. Cato CEO John Cato noted that June's results were "below expectations," and told investors that earnings per share for the second quarter will likely be at the low end of the previously-announced range of $0.53 to $0.57. That range was already a drop from last year's $0.61.
Now what: After a strong post-recession recovery, Cato's recent growth has been spotty, at best. Investors with a long-term view may not want to abandon the company based on just this quarter's disappointment. However, looking ahead, Cato will either have to find a way to reinvigorate its growth, or investors will have to adjust their expectations to reflect a slower-growth future for the retailer.
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Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool’s disclosure policy prefers dividends over a sharp stick in the eye.