hitting 1306.47 after losing 6.01 points. Neither Burberry´s double digit rebound, nor Cato´s 24% increase in the company´s dividend were enough to cheer the international fashion benchmark index.
The Board of Directors of The Cato Corporation approved a 24% increase in the company's dividend to an annualized rate of $.92 per Class A Common and Class B Common share. The dividend is payable quarterly at the rate of $.23 per share with the first payable date of June 27, 2011 to shareholders of record on June 13, 2011. At the closing market price on May 25, 2011, the dividend represents an annualized yield of 3.5%.
But the strong earnings didn't prevent a slump in the 155-year-old company's share price as some investors booked some profits after Burberry said its investment in expansion would hit operating profit margins in the first half of this fiscal year.
Burberry rode a strong rebound in the global luxury goods market to post net earnings of 208.4 million pounds ($340 million) for the 12 months to the end of March, compared with 81.4 million pounds the previous year. Revenue at the company leapt 25 percent to 1.5 billion pounds, from 1.2 billion pounds.
Profits were driven by a 35 percent rise in sales of non-apparel goods, such as handbags, jewelry, and shoes. Demand for the group's upmarket stock was particularly strong from Asia and Chinese tourists in Europe.
"For the moment Burberry remains a rare and notable example of a retailer enjoying a stellar growth trajectory," said Richard Hunter, head of U.K. equities at Hargreaves Lansdown Stockbrokers. Burberry´s surging sales of leather bags and other accessories more than doubled its full-year profits, pulling a bunch of luxury shares such as Hermés, LVMH, Macy´s, Tiffany & Co or Polo Ralph Lauren. In fact Polo Ralph Lauren and Tiffany´s were the main movers of the session. The American preppy style ambassador posted lower fiscal fourth-quarter profit, what dropped 36% as higher costs and lower sales in its vital Japanese market hurt the bottom line. The results missed Wall Street expectations.