CHARLOTTE, N.C., May 22, 2025 /PRNewswire/ -- The Cato Corporation (NYSE:CATO) today reported net income of $3.3 million or $0.17 per diluted share for the first quarter ended May 3, 2025, compared to net income of $11.0 million or $0.54 per diluted share for the first quarter ended May 4, 2024.

Sales for the first quarter ended May 3, 2025 were $168.4 million, or a decrease of 4% from sales of $175.3 million for the first quarter ended May 4, 2024. The Company's same-store sales for the quarter were flat.

"Our results reflect our customers' cautious approach to discretionary spending," said John Cato, Chairman, President and Chief Executive Officer. "While our sales trend improved later in the quarter, the general uncertainty regarding the economy and the potential impact of the proposed tariffs has us cautious about the remainder of the year."

First quarter gross margin as a percentage of sales was 35.1% in 2025 and 35.8% in 2024. The decrease in gross margin as a percentage of sales is due to lower merchandise contribution caused in part by higher sales of marked down goods, partially offset by lower buying costs. Selling, General and Administrative expense decreased to $55.3 million in 2025 from $56.8 million in 2024 due to decreases in corporate and field payroll expense, as well as, lower insurance costs and store maintenance. These decreases were partially offset by increases in equipment maintenance. Selling, General and Administrative expense as a percentage of sales increased to 32.8% in 2025 compared to 32.4% in 2024. Interest and other income decreased to $1.2 million in 2025 from $5.8 million in 2024 primarily due to a net gain on sale of land of $3.2 million and sales of equity securities recorded in the first quarter of 2024. Income tax expense for the quarter increased to $0.9 million in 2025 from $0.6 million in 2024. The increase in tax expense is primarily due to changes in state and foreign tax rates.

Additionally, the Company bought back 294,036 shares during the quarter.

During the first quarter ended May 3, 2025, the Company did not open any stores and permanently closed eight stores. As of May 3, 2025, the Company operated 1,109 stores in 31 states, compared to 1,171 stores in 31 states as of May 4, 2024.

The Cato Corporation is a leading specialty retailer of value-priced fashion apparel and accessories operating three concepts, "Cato," "Versona" and "It's Fashion." The Company's Cato stores offer exclusive merchandise with fashion and quality comparable to mall specialty stores at low prices every day. The Company also offers exclusive merchandise found in its Cato stores at www.catofashions.com. Versona is a unique fashion destination offering apparel and accessories including jewelry, handbags and shoes at exceptional prices every day. Select Versona merchandise can also be found at www.shopversona.com. It's Fashion offers fashion with a focus on the latest trendy styles for the entire family at low prices every day.

Statements in this press release that express a belief, expectation or intention, as well as those that are not a historical fact, including, without limitation, statements regarding the Company's expected or estimated operational financial results, activities or opportunities, and potential impacts and effects of interest rates, inflation or other factors that may affect our customers' discretionary spending or our costs are considered "forward-looking" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations that are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the forward-looking statements. Such factors include, but are not limited to, any actual or perceived deterioration in, or continuation of negative trends in, the conditions that drive consumer confidence and spending, including, but not limited to, prevailing social, economic, political and public health conditions and uncertainties, levels of unemployment, fuel, energy and food costs, inflation, wage rates, tax rates, interest rates, home values, consumer net worth and the availability of credit; changes in laws, regulations or government policies affecting our business including but not limited to tariffs; uncertainties regarding the impact of any governmental action regarding, or responses to, the foregoing conditions; competitive factors and pricing pressures; our ability to predict and respond to rapidly changing fashion trends and consumer demands; our ability to successfully implement our new store development strategy to increase new store openings and the ability of any such new stores to grow and perform as expected; underperformance or other factors that may lead to, or affect the volume of, store closures; adverse weather, public health threats (including the global coronavirus (COVID-19) outbreak), acts of war or aggression or similar conditions that may affect our merchandise supply chain, sales or operations; inventory risks due to shifts in market demand, including the ability to liquidate excess inventory at anticipated margins; adverse developments or volatility affecting the financial services industry or broader financial markets; and other factors discussed under "Risk Factors" in Part I, Item 1A of the Company's most recently filed annual report on Form 10-K and in other reports the Company files with or furnishes to the SEC from time to time. The Company does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized. The Company is not responsible for any changes made to this press release by wire or Internet services.

THE CATO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED MAY 3, 2025 AND MAY 4, 2024
(Dollars in thousands, except per share data)

	Quarter Ended

	May 3,		%	May 4,		%
	2025		Sales	2024		Sales

REVENUES
Retail sales	$	168,419	100.0 %	$	175,272	100.0 %
Other revenue (principally finance,
late fees and layaway charges)		1,823	1.1 %		1,827	1.0 %

Total revenues		170,242	101.1 %		177,099	101.0 %

GROSS MARGIN (Memo)		59,101	35.1 %		62,767	35.8 %

COSTS AND EXPENSES, NET
Cost of goods sold		109,318	64.9 %		112,505	64.2 %
Selling, general and administrative		55,325	32.8 %		56,752	32.4 %
Depreciation		2,564	1.5 %		2,040	1.2 %
Interest and other income		(1,202)	-0.7 %		(5,821)	-3.3 %

Costs and expenses, net		166,005	98.6 %		165,476	94.4 %


Income Before Income Taxes		4,237	2.5 %		11,623	6.6 %

Income Tax Expense		928	0.6 %		649	0.4 %

Net Income	$	3,309	2.0 %	$	10,974	6.3 %


Basic Earnings Per Share	$	0.17		$	0.54


Diluted Earnings Per Share	$	0.17		$	0.54

THE CATO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	May 3,		February 1,
	2025		2025
	(Unaudited)		(Unaudited)

ASSETS
Current Assets
Cash and cash equivalents	$	31,346	$	20,279
Short-term investments		48,609		57,423
Restricted cash		2,675		2,799
Accounts receivable - net		26,830		24,540
Merchandise inventories		109,430		110,739
Other current assets		7,560		7,406

Total Current Assets		226,450		223,186

Property and Equipment - net		58,767		60,326

Noncurrent Deferred Income Taxes		0		0

Other Assets		19,863		19,979

Right-of-Use Assets, net		135,726		148,870

TOTAL	$	440,806	$	452,361

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities	$	130,000	$	130,684

Current Lease Liability		52,524		57,555

Noncurrent Liabilities		13,293		13,485

Lease Liability		80,072		88,341

Stockholders' Equity		164,917		162,296

TOTAL	$	440,806	$	452,361

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SOURCE The Cato Corporation

CATO REPORTS 1Q EARNINGS