CATO CORP
For the period ended Nov 1, 2025. Filed Nov 25, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 1, 2025 · Filed Nov 25, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
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Item 2. RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain items
in the Company's unaudited Condensed
Consolidated Statements of Income (Loss) as
a percentage of total retail sales:
Total retail sales
100.0
%
100.0
%
100.0
%
100.0
%
Other revenue
1.1
1.1
1.1
1.0
Total revenues
101.1
101.1
101.1
101.0
Cost of goods sold (exclusive of
depreciation)
68.0
71.2
65.5
66.7
Selling, general and administrative
(exclusive of depreciation)
37.1
40.0
34.2
35.5
1.6
1.9
1.5
1.5
(1.4)
(1.8)
(1.0)
(2.1)
Income (loss) before income taxes
(4.1)
(10.2)
0.9
(0.5)
N
et income (loss)
(3.4)
(10.4)
1.0
(0.8)
RESULTS OF OPERATIONS
Management’s
Discussion
and
Analysis
of
Condition
and
Results
of
Operations
(“MD&A”)
is
intended
to
provide
to
assist
readers
in
better
understanding
and
evaluating
our
condition and results of
operations. We recommend reading this
MD&A in conjunction with
our Condensed
Consolidated Financial
Statements and
the Notes
to those
statements included in
the “Financial
Statements”
section of this Quarterly Report on
Form 10-Q, as well as our
2024 Annual Report on Form 10-K.
Recent Developments
Tariff
Pressures
A
quantity
of
our
are
made
in
China and
Southeast
Asia. The
from
these
countries are subject
to the newly
implemented reciprocal tariffs,
as well as
an additional Section
301 ad
valorem tariff on
Chinese products.
In the third quarter,
products from China were subject
to the Section
ad
valorem
tariffs
and
sourced
from
all
other
were
subject
to
reciprocal
tariffs.
During
the
quarter,
most
of
the
from
which
we
source
product,
excluding
China
and
India,
finalized
trade
deals
with
the
U.S.
The
additional
tariffs
range
from
10%
to
20%
for
those
countries.
India’s tariffs
increased to 50% from 10% in
the quarter.
Though China’s tariffs
remained at 30% during
the
quarter,
10,
they
were
reduced
to
20%.
These
tariffs
increased
our
costs
with
made
in
China
and
Southeast
Asia
in
the
third
quarter.
We
anticipate
that
our
product
acquisition
costs
for
the
remainder
of
the
fiscal
year
and
into
will
be
negatively impacted by these additional costs.
These cost
increases will
continue to
negatively impact
our results
of operations
and financial
unless we
are able
to
successfully mitigate
their effects
by increasing
retail pricing
without losing
sales
and/or sharing these
costs with
our vendors. Certain
product categories,
such as shoes
and handbags that
are predominately made in China, will be difficult to source in countries with lower
tariffs.
Comparison of the Three and Nine
Months ended November 1, 2025 with November
2, 2024
Total retail sales for the
third quarter were $153.7 million compared to
last year’s third quarter sales
of $144.6
million, a 6%
increase. The
Company’s sales increased
in the third
quarter of fiscal
2025 primarily due
to a
10% increase
in same-store
sales, partially
offset by
stores that
were closed
in the
past 12
months. For
the
nine
months
ended
1,
2025,
total
retail
sales
were
$496.8
million
to
last
comparable nine month sales
of $486.8 million, a
2% increase. The increase
in sales in the
first nine months
due primarily
to a
6% increase
in same-store
sales, offset
mainly by
the impact
of store
closures. Same-store
sales include
stores that
open more
than 15
months.
Stores that
relocated or
expanded are
also included
in the
same-store sales
calculation after
they have
been open
more
than 15 months.
The method of calculating same-store sales varies across the retail industry.
As a result, our
same-store sales calculation may not be comparable to similarly titled measures reported
by other companies.
E-commerce
sales
were
less
than
5%
of
total
sales
for
the
nine
months
ended
1,
and
are
included
in
the
same-store
sales
calculation.
Total
revenues,
comprised
of
retail
sales
and
other
revenue
(principally finance
charges and
late fees
on customer
accounts receivable
and layaway
fees), were
$155.4
million
and
$502.2
million
for
the
three
and
nine
months
ended
1,
2025,
to
$146.2
million
and
$491.9
million
for
the
three
and
nine
months
ended
2,
2024,
The
Company operated 1,101 stores at November 1, 2025 compared to 1,167 stores at the end of last fiscal year’s
third quarter.
For the first
nine months of
fiscal 2025, the
Company permanently closed
16 stores.
In total,
t
he Company currently expects to close
approximately 50 stores in fiscal 2025.
Other
revenue,
a
of
total
revenues,
was
$1.7
million
and
$5.3
million
for
the
three
and
nine
months ended November 1, 2025, respectively, compared to $1.5 million and $5.0 million for the prior
comparable three and nine month periods. Included in Other revenue is credit revenue of $0.7 million, which
represented
0.4%
of
total
revenues
in
the
third
quarter
of
fiscal
2025,
relatively
flat
both
in
dollars
and
percentage compared to fiscal 2024.
Credit revenue is comprised of interest earned on the Company’s private
label credit card
portfolio and related
fee income.
Related expenses principally
include payroll, postage
and
other administrative
expenses and
totaled
$0.4 million
in the
third
quarter of
fiscal
2025,
last
year’s third quarter expense of
$0.4 million.
Cost of
goods sold
was $104.5
million, or
68.0% of
retail sales
and $325.3 million,
or 65.5%
sales
for the three and
nine months ended November
1, 2025, respectively, compared
to $103.0 million, or
71.2%
of retail sales and $324.6 million, or 66.7% of retail sales for the comparable three and nine month periods of
fiscal 2024.
The overall
decrease in
cost of
goods sold
as a
percent of
retail sales
for the
and
versus the
comparable three
and nine
month periods
2024 resulted
primarily from lower
buying, distribution and
occupancy costs, partially
offset by increased
sales of marked
down goods.
Cost of goods sold includes merchandise costs (net of discounts and allowances), buying costs,
costs,
occupancy
costs,
freight
and
shrinkage.
Net
costs
and
in-bound
freight are capitalized as
inventory costs.
Buying and distribution costs
include payroll, payroll-related costs
and operating
expenses for
the
buying departments
and
distribution center.
Occupancy
costs
include rent,
real estate
taxes, insurance,
common area
maintenance, utilities
and maintenance
for stores
and distribution
facilities. Total gross
margin dollars (retail
sales less cost
of goods sold
exclusive of depreciation)
increased
by 18.0% to $49.2 million for the third quarter of fiscal 2025 and by 5.7% to $171.5 million for the first
nine
fiscal 2025,
$41.7 million
and $162.3
million for
the prior
year’s comparable
three
and nine months
of fiscal 2024,
Gross margin as
presented may not
be comparable to
those of
other entities.
Selling, general and administrative (“SG&A”) expenses primarily include corporate and store payroll, related
payroll taxes and
benefits, insurance, supplies,
advertising, and bank
and credit card
processing fees. SG&A
expenses were $57.0 million, or 37.1% of retail sales and $169.7 million, or 34.2% of retail sales
for the third
quarter and first nine months of fiscal 2025, respectively, compared to $57.9 million, or 40.0% of retail sales,
and
$172.8 million,
or 35.5%
sales
for the
prior
comparable three
and
nine month
periods,
The decrease in SG&A
expenses for the third
quarter and first nine
months of fiscal 2025
was
primarily due to lower corporate and
field payroll expense, as well as
lower insurance costs.
Depreciation expense was $2.4 million, or 1.6% of retail sales and $7.5 million, or
1.5% of retail sales for the
and first
2025, respectively,
$2.7 million,
or 1.9%
sales and $7.1 million, or 1.5% of retail sales for the comparable three and nine month periods of fiscal 2024,
Interest and other income was $2.2 million, or 1.4% of retail sales and $4.8 million, or 1.0% of retail sales
for
the three and nine months ended November 1, 2025, respectively, compared to $2.6 million, or 1.8% of retail
sales
and
$10.2
million,
or
2.1%
of
retail
sales
for
the
comparable
three
and
nine
month
periods
of
fiscal
2024,
The
for
the
first
nine
months
of
fiscal
to
fiscal
was
primarily due to a net gain on the sale of land held for
investment and the sale of equity securities recorded in
the first quarter of 2024, as well as a net gain on the disposal of the Company’s corporate aircraft recorded in
the third quarter of 2024.
Income tax
benefit was
$1.2 million
and $0.5
million for the
and first
nine months of fiscal
2025, respectively, compared to tax expense of $0.3 million and $1.6 million for the comparable three and
nine month periods of fiscal 2024,
The effective income tax
rate for the
first nine months of
fiscal
(11.9%)
(67.5%)
for
the
first
of
fiscal
The income
tax
benefit
in
fiscal
is
due
to
a
reduction
in
foreign
income
taxes
and
a
larger
release
of
related
to
expired
statute
of
limitations
for
tax
positions
to
the
prior
year.
On
July
4,
2025,
the
One
Big
Beautiful
Bill
Act
(the
“OBBBA”)
was
signed
into
law.
The
Company
considered the
impact of
the
OBBBA in
the second
quarter
The changes
do not
have a
material impact on the Company’s effective tax rate.
The Company continues to monitor impacts moving
forward.
LIQUIDITY, CAPITAL
RESOURCES
AND MARKET
RISK:
believes that
its cash,
cash equivalents
and short-term
investments, together
with cash
flows
from operations and its asset-backed revolving line of credit, will be adequate to fund the Company’s
regular
requirements
and
expected
capital
for
the
months
from
the
issuance
of
these
financial statements.
Cash
provided
by
during
the
first
nine
months
of
fiscal
was
$3.2
million
as
to
$13.3
million
used
in
the
first
nine
months
of
fiscal
The
increase
in
cash
provided
by
of
$16.5
million
for
the
first
nine
months
of
fiscal
as
to
the
first
nine
fiscal 2024
was primarily
attributable to
net income
for the
current fiscal
year compared
to a
net
loss for the prior fiscal year, the relative change in inventory from year-end to the third quarter for both years
and
a
non-operating
gain
on
sale
of
assets
held
for
in
the
first
quarter
of
fiscal
2024,
partially
offset by the relative change of
accounts payable from year-end to
the third quarter for both
years.
At
1,
2025,
the
Company
had
working
capital
of
$58.3
million
to
$34.9
million
at
February 1, 2025.
The increase in working capital was
primarily attributable to an increase in
cash and cash
equivalents and decreases in accrued expenses, current lease liability and accounts payable, partially offset by
a decrease in inventories.
On March
13,
Company, as
borrower, and
certain
other domestic
subsidiaries, as
borrowers
and
guarantors, entered
into a
Credit Agreement
(the “ABL
Credit Agreement”)
and related
loan documents,
by
and
among
the
Company,
certain
other
of
the
domestic
subsidiaries,
and
Wells
Fargo
Bank,
National Association,
as the
lender (the
“Lender”), to
establish an
asset-based revolving
credit facility
(the
“ABL
Facility”)
in
an
amount
up
to
$35.0
The
proceeds
from
the
ABL
Facility
may
be
used
to
provide funding for ongoing working capital
and general corporate purposes.
The ABL Credit Agreement is committed through May 2027 and is secured primarily by inventory and third-
party
credit
card
receivables.
There
were
no
borrowings
and
the
under
the
facility
was $30.0
million before
giving effect
to a
$3.0 million
outstanding letter
of credit
that reduced
borrowing
to
$27.0 million
as of
1,
The
weighted average
interest rate
under the
credit
facility was zero at November 1, 2025
due to no outstanding borrowings.
Expenditures
for
property
and
equipment
totaled
$2.9
million
in
the
first
nine
months
of
fiscal
2025,
compared to $6.5 million in last fiscal year’s first nine months. The decrease in expenditures for property and
equipment
was
due
to
finishing
projects
related
to
investments
in
the
center
and
i
nformation technology
during fiscal
2024, as
well as
no new
store openings
in the
the
current fiscal
year. For
the full
year, the
Company expects
to invest
approximately $5.9
million
for capital expenditures.
Net cash used in investing activities was negligible for the first nine months
of fiscal 2025 compared to $21.5
million net cash provided
in the comparable
period of 2024.
The decrease in net
cash provided by investing
in
was
due
to
a
in
the
sales
of
short-term
investments
and
other
assets,
partially offset by lower capital
expenditures.
Net cash used
in financing activities
totaled $0.9 million
in the first
nine months of
fiscal 2025 compared
to
$12.6
million
used
in
the
comparable
period
of
fiscal
The
in
net
cash
used
in
financing
activities in fiscal
primarily due
to the elimination
of dividend
payments in
and lower
stock repurchases.
As of November
1, 2025, the Company
had 680,740 shares remaining
in open authorizations under
its share
repurchase program.
The Company does not use
derivative financial instruments.
The
portfolio
was
invested
in
bonds
and
taxable
governmental
debt
held
in
managed
accounts
with
underlying
ratings
of
A
or
better
at
1,
and
1,
The
state,
municipal
and
bonds
and
asset-backed
have
contractual
maturities which
range from
1.1 months
to 2.9
years. The
U.S. Treasury/Agencies
notes and
bonds have
a
contractual maturity of up to 3.5
months.
Additionally, at November 1, 2025, the
Company had deferred compensation plan assets
of $9.8 million.
At
1,
2025,
the
Company
had
deferred
plan
assets
of
$9.3
These
assets
are
within
Other
assets
in
the
Balance
Sheets.
See
Note
7,
Fair
Value
Measurements, included in Part 1, Item 1 Financial Statements (Unaudited) in this Quarterly Report on Form
0-Q.
RECENT ACCOUNTING PRONOUNCEMENTS:
See Note 8, Recent Accounting Pronouncements, included in Part 1, Item 1
Financial Statements
(
Unaudited) in this Quarterly Report on Form 10-Q.
QUANTITATIVE
AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK:
The
Company
is
subject
to
market
rate
risk
from
exposure
to
changes
in
interest
rates
based
on
its
financing, investing and
cash management activities,
but the Company
does not believe
such exposure is
material.
We carried out an evaluation, with the
participation of our Principal Executive Officer and
Principal Financial
Officer, of the effectiveness of
our disclosure controls and procedures as of November
1, 2025.
Based on this
evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of November 1,
2025, our
disclosure controls
and
procedures,
as defined
in
Rule
13a-15(e), under
the
Act of 1934 (the “Exchange
Act”), were effective to ensure that
information we are required to disclose
in the
reports
that
we
file
or
submit
under
the
Act
is
recorded,
processed,
summarized
and
reported
within the time periods
specified in the SEC’s
rules and forms and
that such information is
accumulated and
communicated to our management, including our Principal Executive Officer and Principal Financial Officer,
as appropriate to allow timely decisions
regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING:
No change in the Company’s internal control
over financial reporting (as defined in
Exchange Act Rule 13a-
15(f))
has
occurred
during
the
fiscal
quarter
ended
1,
that
has
affected, or is reasonably likely to
materially affect, the Company’s internal
control over financial reporting.
LEGAL PROCEEDINGS:
Not Applicable.
RISK FACTORS:
In addition to the other information
in this report, you should carefully
consider the factors discussed in
Part I,
“Item
1A.
Risk
Factors”
in
our
Annual
Report
on
Form
10-K
for
our
fiscal
year
ended
1,
These risks
could materially
affect our
business, financial
condition or
future results;
however, they
are not
the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem
to
be
immaterial
may
also
adversely
affect
our
or
results
of
operations.
UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS:
The following table summarizes the Company’s purchases of its common stock for the three months
ended November 1, 2025:
ISSUER PURCHASES OF EQUITY SECURITIES
Total Number of
Maximum Number
Shares Purchased as
(or Approximate Dollar
Total Number
Average
Part of Publicly
Value) of
Shares that may
Fiscal
of Shares
Price Paid
Announced Plans or
Yet be Purchased Under
Period
Purchased
per Share (1)
Programs (2)
The Plans or Programs (2)
September 2025
$
October 2025
November 2025
Total
$
680,740
(1)
Prices include trading costs.
(2)
As of August 2, 2025, the Company’s
share repurchase program had 680,740 shares remaining in
open
authorizations.
During
the
third
quarter
ended
1,
2025,
the
Company
did
not
repurchase or
retire any
shares under
this program.
As of
Company had
680,740
shares
in
open
authorizations.
There
is
no
specified
expiration
date
for
the
Company’s repurchase program.
DEFAULTS
UPON SENIOR SECURITIES:
N
ot Applicable.
MINE SAFETY DISCLOSURES:
No matters requiring disclosure.
OTHER INFORMATION:
During
the
three
months
ended
1,
2025,
none
of
the
directors
or
officers
(as
defined
in
Rule 16a-1(f)
of
the
Securities Exchange
Act
of
1934,
as
amended)
adopted
or
terminated
a
“Rule
10b5-1
trading
arrangement”
or
a
“
non-Rule
10b5-1
trading
arrangement”
(as
such
terms
are
defined in Item 408 of Regulation S-K).
EXHIBITS:
Exhibit No.
Item
3.1
Registrant’s Amended and Restated Certificate of Incorporation, incorporated by
reference to Exhibit 3.1 to Form 10-Q of the Registrant for the quarter ended May
2, 2020.
3.2
Registrant’s Amended and Restated By-Laws, incorporated by reference to Exhibit
3.2 to Form 10-Q of the Registrant for the quarter ended May 2, 2020.
31.1*
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
31.2*
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
32.1*
Section 1350 Certification of Principal Executive Officer.
32.2*
Section 1350 Certification of Principal Financial Officer.
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104.1
Cover
Page Interactive
Data
File (Formatted
in
Inline
XBRL
and
contained in
the Interactive Data Files submitted as Exhibit 101.1*)
- Submitted electronically herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
THE CATO
CORPORATION
November 25, 2025
/s/ John P.
D. Cato
Date
John P.
D. Cato
Chairman, President and
Chief Executive Officer
November 25, 2025
/s/ Charles D. Knight
Date
Charles D. Knight
Executive Vice President
Chief Financial Officer
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.