News & Events zu Cato Corp (CATO)CATOCato Corp

Cato Corporation Plans to Close Approximately 120 Stores

The Cato Corporation announced that they plan to close approximately 70 additional underperforming stores in the third and fourth quarters bringing total planned stores closures to approximately 120 stores in fiscal 2026. "Annually we review approximately one-third of our stores to exercise available lease options or negotiate an extension based on each store's performance including store sales trend and current and projected store profitability. In years past, marginal stores were renewed for an additional year to give the store more time to improve its sales trend and profitability," stated John Cato, Chairman, President, and Chief Executive Officer. "In light of the current economic environment, especially with the negative pressure on our customers' discretionary income, we do not expect these marginal stores to improve appreciably. As a result, we are closing more stores than expected this year. We believe that closing these additional stores will have a positive impact on our operating results in fiscal 2027 and beyond." The company expects to incur between $1M-$1.3M in costs to exit these additional stores through the end of 2026. These costs relate primarily to expenses for the disposal of external signage and fixtures and returning store systems back to corporate. As these stores are all at the end of their lease term, the company will not be paying rent for these locations beyond 2026.

CEO Expects Continued Pressure on Customers' Discretionary Income

Reports Q2 revenue $163.9M vs. $174.7 last year. "Our results in the quarter are in large part due to the continued pressure on our customers' discretionary income, which is being negatively impacted in part by persistent inflation, higher fuel prices and continued elevated interest rates," stated CEO John Cato. "We expect the negative pressure on our customers' discretionary income to continue for the foreseeable future. We will continue to tightly manage our expenses and inventory as we anticipate the back half of 2026 to be challenging."

Cato Corp. announces Q2 earnings per share of 35 cents compared to 1 cent in the previous year.

Reports Q2 revenue $174.7M vs. $166.9M last year. "Our sales trend continued to improve during the second quarter. We attribute this improvement in part due to 2024 sales being impacted by supply chain disruptions," stated CEO John Cato. "We will continue to tightly manage our expenses as we anticipate the back half of 2025 to be challenging due to the continued uncertainty regarding tariffs and the potential negative impact on our product acquisition costs."